With California Budget Passed, Next Year's Health Fight Begins Now

• Assembly and Senate end 81-day impasse, pass budget with little fanfare
• Governor forces spending restrictions that would force deeper cuts to health & other services
• Next year's budget battle begins again

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

The Legislature met Friday in two anticlimactic and short sessions to pass the budget, nearly three months late. The budget, with its $104 billion general fund is expected to be signed by Gov. Arnold Schwarzenegger on Monday.

With a budget, clinics and hospitals will now get paid. Providers caring for Medi-Cal patients have not received any state payments since August 1st. Some have been forced to close. Payments, however, will be at lower rates pending a court case challenging reduced reimbursements to Medi-Cal providers.

The budget closes a $15 billion shortfall between revenues and spending, but mainly through cuts, shuffling of money, and one-time infusions – such as back taxes and penalties owed by companies who skipped out on their obligations. No permanent sources of new revenues were approved and will likely be the subject of a massive battle next year. This year, as in years past, no taxes were increased because Republicans have steadfastly pledged to vote against any tax increase. Republicans hold a minority in both houses, but their votes are needed to approve a budget by a two-thirds majority.

The budget would require the state to stash away an uncommonly high amount of revenues into a rainy day fund, and put restriction on how and when the money could be used. That would mean less money for state priorities, such as education, health, social services, road building and park maintenance.

Already this year, immediate health cuts in the budget deal include:

• increased reporting (every six months in Medi-Cal) with the purpose of having over 250,000 children lose coverage;

• increased Healthy Families premiums per child per month for low-income families;

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