POLICY CENTER

State Budget

Get up-to-date information on the status of the state budget.

Constitutional Deadline to Approve a Budget Passes

The Governor and California’s Legislature failed once again to approve a state budget by the June 15th constitutional deadline. Legislative leaders are continuing their negotiations in hopes of passing a family recovery budget that saves jobs and invests in California’s public structures. CPEHN has joined with other groups in scheduling budget events during the July recess to highlight the impact of the proposed cuts on California’s most vulnerable populations as well as the need for new revenues.

A recent study conducted by UC Berkeley’s Center for Labor Research and Education found that the Governor’s cuts-only budget would result in a loss of 331,000 full time jobs in California, $36 billion in economic output, and $1.9 billion in state and local tax revenue. Our Legislative leaders have proposed a mix of cuts and revenue increases that could save the state from these economic losses.

Conference Committee Meets to Reconcile State Budget

California 's Budget Conference Committee met in early June to start reconciling differences between the Assembly and Senate approved budgets. Fortunately, the worst of the Governor’s proposed cuts, including a proposal to eliminate CalWORKs, the state’s primary job support program for low-income families, as well as proposals to cut Medi-Cal and Healthy Families by limiting services and increasing co-pays were not included in the working proposals of either the Assembly or Senate. Although these cuts are not currently being debated there is still a possibility that they could be reinserted as part of the final budget negotiations with the Governor and Legislative leaders.

The Conference Committee did take action to delay California ’s discount prescription drug program for another year and resolved a handful of smaller items. The Committee will continue to meet in June to resolve remaining differences between the Assembly and Senate approved budgets including proposals to restore funding for California ' s community clinics as well as a proposed freeze on hospital rates.

Democrats Unveil New Revenue Packages

Over the week of May 24th, legislative Democrats released proposals to increase revenue as a means of closing the budget deficit. The Governor and GOP legislators have said they refuse to consider new taxes and continue to insist that our communities bear the brunt of budget cuts.

Democratic Assemblymembers released a budget proposal that includes:

  • A severance tax on all oil production, raising $900 million next year. The new tax would be offset by a reduction in the state sales tax, which allows the proposal to pass with a majority vote rather than two-thirds vote
  • $8.7 billion in bonds to be repaid over 20 years

The $4.9 billion package of revenue increases from Senate Democrats includes:

  • Repealing corporate tax breaks scheduled to begin Jan. 1 ($2.05 billion)
  • Extending a 0.25% income tax that is scheduled to end Dec. 31 ($1 billion)
  • Extending a $217 per dependent reduction in the state's dependent income tax credit, also scheduled to end Dec. 31 ($430 million)
  • Raising the vehicle-license fee from 1.15% to 1.50% of estimated value starting July 1 ($1.2 billion)
  • Increasing the state's alcohol tax to an inflation-adjusted amount over the current 1991 levels ($210 million)

 

Governor's May Revise

The revenue proposals are a response to the release of Governor Schwarzenegger's May Revise. His revised budget proposal eliminates CalWORKs, the state’s primary job support program for low-income families, and cuts Medi-Cal and Healthy Families by limiting services and increasing co-payments. These cuts would deny health care and the support needed to pay for food and rent to communities of color across California.

The revised budget also includes a devastating 60% cut to county mental health services to the federally required minimum. Changes in federal law as a result of health care reform prohibited the Governor from cutting eligibility levels for Medi-Cal and eliminating the Healthy Families program—proposals Schwarzenegger had originally outlined in his January budget. Other important programs, however, were not spared. The May revision continues to include the elimination of the Cash Assistance Program for Immigrants (CAPI) and the California Food Assistance Program (CFAP). 

Despite such draconian cuts, the Governor’s budget includes no new revenue proposals while authorizing an additional $2.4 billion in tax breaks for large corporations. In this dire economic climate, the Governor’s May revise provides little support for California families struggling to recover from the economic downturn, while allowing big corporations to get away with contributing less towards maintaining our state’s public infrastructure.

You can access the budget directly on the  Department of Finance's Budget Page.

Key Budget Cuts to Health Services:

Medi-Cal

  • Includes mandatory co-pays for doctor visits and dental services ($5), emergency room visits ($50), and hospital stays ($100).
  • Caps the number of physician or clinic visits to 10 per year.
  • Eliminates coverage for over the counter drugs.
  • Establishes caps on hearing aids, durable medical equipment, incontinence, urological and wound care supplies, as well as prescription drug coverage to six per month (excluding life-saving drugs).
  • Freezes hospital rates.
  • Eliminates full-scope Medi-Cal for lawful immigrants residing in the U.S. for less than five years.
  • Eliminates adult day health care benefit.
  • Decreases reimbursement rates for family planning services.

Healthy Families Program

  • Increases monthly premiums for Healthy Families recipients with incomes from 200 to 250 percent of the Federal Poverty Level (FPL) from $24 per child to $42, and the family maximum from $72 to $126. This is in addition to maintaining the January proposal to increase the premium for families between 151% and 200% FPL from $16 per child to $30, and the family maximum from $48 to $90.
  • Increases co-payments for emergency room visits from $15 to $50 and adds copayments on hospital inpatient services of $100 per day with a $200 maximum.
  • Eliminates vision coverage for Healthy Families recipients (proposed in January).

Other Cuts that Will Impact Our Communities:

  • Eliminates the CalWORKs program.
  • Eliminates the Cash Assistance Program for Immigrants (CAPI) and the California Food Assistance Program (CFAP). 
  • Shifts $602 million or 60% of county mental health realignment funding to pay for county social services programs, limiting county mental health services to federally-required services only.
  • Reduces In-Home Supportive Services and SSI/SSP.
  • Uses funds from Proposition 99 to infill other general revenue programs.

© 2010 / California Pan-Ethnic Health Network / 654 13th Street, Oakland, CA 94612 / Phone: (510) 832-1160 / Fax: (510) 832-1175 / info@cpehn.org