Widening Budget Deficit Poses Challenge to Health Care Reform
California's rising budget shortfall is expected to impair efforts by Gov. Arnold Schwarzenegger (R) and lawmakers to strike a deal on overhauling the state's health care system and other legislative priorities, the San Diego Union-Tribune reports (Mendel, San Diego Union-Tribune, 12/12).
Legislative Analyst Elizabeth Hill last month projected that the state would face a $9.8 billion budget deficit over the next 18 months, larger than the $6.1 billion forecasted by Schwarzenegger's administration.
On Monday, the Department of Finance revised Hill's estimate, projecting a deficit of about $14 billion, according to two sources who met with the governor to discuss the new figures.
H.D. Palmer, spokesperson for the department, said officials based their estimate on several factors, including a poor housing market, drops in property tax revenues and increased spending from the wildfires in Southern California.
In November, Schwarzenegger ordered all state departments to cut spending by 10% for next fiscal year. However, the governor and some Republican lawmakers are now suggesting more immediate cuts that would occur by midyear (Yamamura, Sacramento Bee, 12/12).
The budget forecast comes as Schwarzenegger and Democratic legislative leaders are trying to reach a compromise on a health care reform plan.
The governor, referring to health care negotiations, said, "It takes a lot of effort to bring all stakeholders together" (San Diego Union-Tribune, 12/12).
Only two weeks remain for both sides to broker a deal on health care reform, but sticking points remain over employer contributions, an individual coverage mandate and subsidies, according to a spokesperson for Schwarzenegger (California Healthline, 12/11).
Meanwhile, Steven Maviglio, spokesperson for Assembly Speaker Fabian Núñez (D-Los Angeles), said Assembly Democrats have scheduled a closed-door caucus Thursday to discuss health care reform and the budget. He added that legislators will be urged not to propose legislation that would require new spending or tax cuts (Sacramento Bee, 12/12).
Earlier this month, Núñez postponed indefinitely a scheduled Assembly vote on his health care reform plan (ABX1 1) because a compromise had not been reached with the governor (California Healthline, 12/11).
"It's possible Sacramento may still act on a watered-down proposal called 'health care reform,' but either way, the issue has been a great shakedown vehicle for" a ballot campaign to rework California's term-limit rules for lawmakers, Jamie Court and Judy Dugan -- president and research director, respectively, of the Foundation for Taxpayer and Consumer Rights -- write in a Los Angeles Times opinion piece. More than half of the $5.3 million raised for a committee in favor of the term-limits measure "came from stakeholders in the health care debate," including doctors' groups, unions and medical associations, according to Court and Dugan (Court/Dugan, Los Angeles Times, 12/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.