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Robo-Cuts: California’s Budget and Health Care Intertwined

By Anthony Wright
Executive Director of Health Access California

Former Governor Pete Wilson gave the Governor's radio address over the weekend, and hinted at what the Governor Schwarzenegger might be thinking, as we head into the week where the budget will be announced.

Josiah Greene at the California Majority Report is right to sound the alarm. Wilson invokes his attempt at Proposition 165, to give him as Governor more budget-cutting authority. It also raises the specter of Schwarzenegger coming back with something similar to Prop 76, which would have allowed the Governor to make unilateral budget cuts in certain emergencies. Both measures failed at the ballot box, and for good reason.

Whether the cuts are "unilateral" or "automatic" doesn't make them better, it makes them worse.

• It means that cuts are made without proper consideration of what is penny-wise and pound-foolish;

• It means that cuts are prioritized over other budget solutions, including raising revenues, and yes, taxes.

• It means that legislators escape accountability to make the tough choices, whether cuts or revenues.

Governor Wilson said in his radio statement that when "our economy does slow down, state law must require that state government slows down its spending, too."

But it already does. The requirement to have a balanced budget in effect provides for this: when less revenue comes in (as it is doing now), it puts forward the challenge to elected policymakers to make the tough choices--including making the cuts that do the least harm, and to raise revenues if need be.

Here's the problem in health care, and other social services: it is exactly during bad economic times, when policymakers are seeking to cut the state budget, that health care services are needed the most.

It's countercyclical: when economic times are good, people are more likely to be able to get and afford private coverage. The need for public health programs grows at exactly the times that state revenues start to dry up, and this, in fact, exacerbates the budget crisis.

That's why passing new revenues on the ballot as part of health reform would help the overall budget crisis. It would reduce the fluctuations in enrollment in public coverage programs between good and bad times, lessening the budget roller coaster that California has been on.

The proposed budget cuts that we will see will likely attempt to lessen the number of people enrolled in public programs, either through direct eligibility cuts, or indirectly, by placing administrative burdens in place, like imposing quarterly status reports, or eliminating outreach efforts.

Such efforts may reduce the pressure on the budget, but they only exacerbate the actual problem--that those people still need care and coverage. Raising the revenues for health reform would actually help resolve the problem, which in turn would reduce the pressure on the general fund.

A reporter asked if we could both deal with the budget crisis and health reform in the same year. I said it was possible to walk and chew gum at the same time. But a moment, I take that back... It's part of the same problem, and they need to both be addressed... it's not just possible, it's necessary.
Health Access California is a statewide health care consumer advocacy coalition of over 200 groups. This article has also been published on the Health Access Weblog.

Posted on January 07, 2008

Comments

Two things that cant continue...raising taxes, and spending more than you take in. Both are very basic concepts, the reality and most obvious outcome of this is exactly what happened today. Not popular to some, but it is what it is. The only thing left to consider is where the cuts would come from. Dividing them evenly is about as fair as it gets...

Posted by: He did the right thing... at January 10, 2008 07:38 PM

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