Governor Set To Sign Budget Package / Health Care Spending Sees Big Jump

CAL/AAEM News Service calaaem_news at yahoo.com
Fri Feb 20 19:58:24 PST 2009





Governor Set To Sign Budget Package; Campaigns Gearing Up

 Source: The
California Healthline (http://www.californiahealthline.org)

Date: February 20, 2009

 

Gov. Arnold Schwarzenegger (R) plans to sign a package of
legislation today that aims to address California's budget deficit through June
2010, but interest groups are preparing to campaign against ballot measures the
legislation will put before voters in a May 19 special election, the Los
Angeles Times reports (Rau et al., Los Angeles Times, 2/20).

To address the deficit, the package relies on about:

-         
$14.9 billion in spending
cuts; 

-         
$12.8 billion in tax
increases; and 

-         
$11.4 billion in borrowing
(Zapler/Garcia, San Jose Mercury News, 2/19). 

Health Care Cuts

Overall, health and human services programs will see state
funding drop by about $1.6 billion, but federal funds included in the economic
stimulus package could restore $676 million in cuts, according to the San
Francisco Chronicle (Fernandez, San Francisco Chronicle, 2/20).

For example, Safety Net Care Pool funds for public hospitals
that treat uninsured patients could be cut by about $54 million unless the
state receives specific funds through the stimulus package (Vesely, Modern
Healthcare, 2/19).

The package also would cut $24.7 million in state payments
to counties for administering applications for Medi-Cal, California's Medicaid
program (Kisken, Ventura County Star, 2/20).

In addition, the package could eliminate about three million
adult Medi-Cal beneficiaries' coverage for:

-         
Acupuncture; 

-         
Audiology and speech
therapy; 

-         
Chiropractic care; 

-         
Dental care; 

-         
Optometry and optician
services; 

-         
Podiatry; and 

-         
Psychological services. 

The budget includes a 3% reduction for regional centers'
budgets for care providers and operations (Kleffman, Contra Costa Times,
2/19).  Twenty-one regional centers
contract with the state Department of Developmental Services to provide
services to Californians with disabilities (Abram, Los Angeles Daily News,
2/19).

Regional centers would be subject to a cut of an additional
7% if they do not identify $100 million in savings (Contra Costa Times, 2/19).

Ballot Measures

In large part, the budget package depends on voters'
approval of $5.8 billion in maneuvers outlined in ballot initiatives that will
be considered in a May 19 special election (Los Angeles Times, 2/20).  Health care-related proposals would:

-         
For two years, shift $227
million in funding from new Proposition 63 mental health programs to fund the
existing Early Periodic Screening, Diagnosis and Treatment Program for
low-income children (AP/San Jose Mercury News, 2/19). Californians approved
Proposition 63 in 2004 to increase the state income tax on high-income state
residents to fund mental health services (California Healthline, 2/19); and 

-         
For five years, reallocate
$608 million from First 5 early childhood health care and education programs to
other children's programs.  First 5 was
created in 1998 when voters approved Proposition 10, to increase the state
tobacco tax to fund early childhood health care and education programs (AP/San
Jose Mercury News, 2/19). 

Other measures on the ballot will address borrowing against
state lottery proceeds, state education funding and a state spending cap.

The ballot also will include an initiative that would bar
property tax increases for seismic retrofits. 
It was not qualified as part of the budget package.

The state secretary of state's office is expected to release
proposition numbers for the initiatives today (San Francisco Chronicle, 2/20).

The deficit could re-emerge if voters reject any of the
measures qualified as part of the budget package (Los Angeles Times, 2/20).
That said, state officials said the deficit could grow larger depending on the
overall economy (Sanders, Sacramento Bee, 2/20).

The governor said he would start campaigning for the
measures soon (Miller, Riverside Press-Enterprise, 2/19).

Advocates for mental health and early childhood education
are preparing campaigns to oppose the initiatives (Los Angeles Times, 2/20)..

National Implications

Susan Urahn, managing director of the Pew Center on the
States, said, "California is an example of what you will see"
nationwide as other states grapple with mounting budget deficits.

The New York Times reports that California could be seen as
an example for other states on how to use funds from the federal stimulus
package to address budget deficits.

Urahn said, "My guess is states will use what they can
to reduce cuts to the bone in education and health care" (Steinhauer, New
York Times, 2/20).

For more information, please visit:

http://www.californiahealthline.org/Articles/2009/2/20/Governor-Set-To-Sign-Budget-Package-Campaigns-Gearing-Up.aspx

 

Health Care Spending Sees Big Jump During Governor's Tenure

Source:  The
California Healthline (http://www.californiahealthline.org)

Date:  February 09,
2009

  

Health care spending in California has increased by 18%
since Gov. Arnold Schwarzenegger (R) took office in 2003, according to a San
Jose Mercury News analysis of state spending between 2003 and 2008.

Health care is one of several categories in which increases
in state spending have outpaced both inflation and California's population
growth.

Medi-Cal accounts for a big chunk of public health spending,
which from 2003 to 2008 increased by $2.9 billion above what inflation and
population growth would dictate. 
Medi-Cal is California's Medicaid program.

According to the Mercury News, the growth in Medi-Cal
spending was driven in part by:

-         
Medical inflation; 

-         
An aging population; and 

-         
Expanded eligibility rules
for women and children that state legislators approved a decade ago. 

General Trends

Overall, state spending increased by 34.9% during
Schwarzenegger's tenure, the Mercury News reports.

Mike Genest, Schwarzenegger's state finance director, said,
"Had we stuck with a very austere budget, we would have been in better
shape."

However, he noted that a tighter budget would have meant
"real, permanent reductions in service levels, like schools and health
care and prison guard pay, and that would have required herculean effort from
the Legislature. And there was no chance of that."

Potential Changes

Many experts say that fixing California's budget system will
mean looking at different reform options, including:

-         
Making it harder to qualify
ballot measures; 

-         
Adopting spending caps; and


-         
Reconsidering the
two-thirds vote requirement in the Legislature for tax increases
(Rogers/Poitinger, San Jose Mercury News, 2/8). 

Budget Problems Widespread

Outside of California, other states are adopting health care
cuts as they work to address budget deficits, the Los Angeles Times reports..

The National Conference of State Legislatures, a
non-partisan think tank in Washington, D.C., estimates that for fiscal year
2010, state governments are looking at a collective $84.3 billion budget gap
(Powers/Faussett, Los Angeles Times, 2/8).

 



Abid Mogannam &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine

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