Budget Gridlock in Sacramento – Fate of Health Care Cuts Uncertain
[Posted 08/18/08]

Facing a $15.2 billion shortfall, Governor Schwarzenegger and legislative leaders have not yet reached agreement on the budget for the 2009 fiscal year, which began July 1. The fate of the 10 percent cuts to Medi-Cal reimbursement rates remains uncertain as legislators and the governor grapple with how to close the shortfall.

This past weekend, the Assembly voted on the Assembly Democrats’ budget plan, which restored Medi-Cal rates to their levels prior to the cut, and reduced the budget shortfall with a mix of tax increases on corporations and wealthy individuals. The plan fell 9 votes short of the 54 votes needed under the 2/3 majority rule for legislative budget votes. It received no Republican votes.

This week, the Senate is expected to vote on a slightly different proposal. That plan could keep some portion of the 10% cuts to Medi-Cal reimbursement rates, but likely not all. The Senate plan is also expected to contain a mix of new revenues.

It is not clear how or when the impasse will end. While both parties generally want to avoid cuts, they disagree on how or whether to raise new revenues to deal with the shortfall. Some Republicans may eventually agree to targeted tax increases, but will likely insist on a mandatory budget cap in return, which is generally opposed by Democrats. Until these issues are largely resolved, we will remain without a budget.

What is clear is that cutting health care remains an option for a legislature under increasing pressure to resolve a huge budget shortfall. CMA urges you to contact your legislator and ask them to commit to passing a budget which doesn’t cut health care. You can find your legislator by typing in your address at the legislature’s website.