Gov. Proposes Cuts and Taxes to Address $11.2B Shortfall
[Posted 11/10/08]

Governor Schwarzenegger announced last week a special legislative session to deal with the $11.2 billion budget shortfall facing California for the current fiscal year. The Governor also proposed cutting $4.5 billion from the current budget, including $142 million from Medi-Cal. However, due to CMA’s successful lawsuit that prevents the state from cutting Medi-Cal reimbursement rates to physicians and other providers, the Governor’s current proposal scores savings by modifying eligibility requirements and eliminating benefits not required by federal law, including adult dental and psychology services.

The Governor’s proposal also includes $4.7 billion in new tax revenue.

Negotiations on California’s ongoing budget problems are expected to continue throughout the next legislative session.