‘California’s Budget Situation Has Improved Sharply’

Yesterday’s long-term budget forecast for sunnier skies in California by the Legislative Analyst’s Office could also mean good things for the state’s health care programs, according to the LAO and health experts.

“For the first time in a decade, we’ve stabilized our budget problem,” said Mac Taylor, head legislative analyst at the LAO. “We are looking at a much more positive outlook in the future. This is nothing like we’ve had to look at in the past.”

The state still faces a $1.9 billion deficit for the fiscal year 2013-14 — that’s about half current shortfall and half operating deficit for next year, according to Taylor — but that is just the current projection and could shift, based on a number of factors, Taylor said.

“If the [Brown] administration still feels they can get more redevelopment money, for instance, then they might have a smaller definition of the problem,” Taylor said. “And we assume only $100 million in cap-and-trade money, but if the administration comes up with [more of] those dollars, when you get to January, the governor might have an even smaller assumption of the budget problem.”

When you consider the worst-case and compare potentially cutting $1.9 billion in June to the overall $80 billion budget, or compare that reduction to the multi-billion-dollar budget blood-letting in previous budgets, this current budget estimate is golden, said Anthony Wright, executive director of Health Access California.

“At the end of the day, it’s hard to say anything other than this news is good,” Wright said. “With passage of Prop. 30, we finally see a clearing in the forest. There is a difference between looking for efficiencies [in the next budget], rather than eliminating whole programs and services.”

Taylor and the LAO report even brought up the “S” word: “We could be looking at a surplus in 2015-16,” Taylor said. “For the first time since 2001, we would be in the black. This is a dramatic turnaround.”

It is unlikely any previous cuts to health care programs would be restored, Wright said. “Will the governor continue to be prudent? Yes,” Wright said. “But this shores up the foundation. The big risk with [implementation of] the Affordable Care Act was the state’s fiscal uncertainty. So this should help that, as well.”

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