Assembly Continues To Try To Find Budget Solution

Republicans, however, seemed impervious to the pleas and continued to hammer away away on their position that taxes would harm the economy, even though Legislative Analyst Mac Taylor has said that both cuts and taxes would cause significant harm similarly, but that the state had no choice but to do both.

THE REPUBLICAN PROPOSAL

A Republican budget proposal, which repeats and combines many of the same severe cuts that the Legislature has previously rejected, received a full airing in the Assembly on Tuesday. Assemblymember Roger Niello, vice chairman of the Assembly Budget Committee, presented the minority party’s proposal, which stayed loyal to the party’s view that Republicans would not raise any new revenues, no matter the cost to children, aged, blind, disabled and others who rely on state services.

The Republicans proposed $15.6 billion in cuts (on top of $10 billion already enacted this year), including more than $10 billion to K-14 education. In health care, advocates will see a familiar list, which was largely vetted last week in the Senate Budget Subcommittee:

• Deny Medi-Cal coverage nearly a half-million working parents who are under the poverty level;

• Eliminate Medi-Cal benefits, such as dental, podiatry, incontinence creams and washes, and optometry for 2.5 million parents, seniors, and people with disabilities;

• Require seniors earning around $900 a month to pay one-third of their income on health care before benefitting from Medi-Cal;
• Postpone pilot projects under SB 437, which would streamline enrollment for eligible children into Medi-Cal and Healthy Families, and ensure children stay healthy, productive and don’t contract expensive illnesses;

• Reduce rates for family planning services, for which California receives $9 from the federal government for every $1 the state invests;

• Siphon funding from public hospitals on which we all rely; and

• Impose a waitlist for Healthy Families, closing the door to coverage for over 160,000 kids.

[The last item, closing enrollment in Healthy Families, has actually already been under consideration by the Managed Risk Medical Insurance Board that runs the program, set to make a decision this Wednesday. But earlier this week, the First Five Commission voted to offer $16 million to MRMIB to prevent the waiting list from being imposed through June. However, just as that action was announced, the Republicans has embraced the waiting list as a proposal of their own.]

Overall, the Republican strategy, Niello explained, was to target the areas of the budget that were fastest growing. The areas targeted – health and human services – are growing at a rapid pace because the state’s senior population is growing and needs such services. Health services are now growing, as expected, due to the increased need from the economic downturn.

THE DEBATE

The discussion centered around what type of action would actually stimulate the economy – and whether simply holding the line on taxes would accomplish the type of stimulus that would resuscitate the state’s finances.

Cuts – particularly in programs for low-income recipients – also hurt the economy. Many economists would argue that cuts to services may have the biggest negative economic impact, given that those benefits are directly spent in the state’s economy. In health care especially, the state would forgo valuable federal matching dollars, and curtail investment in the health sector, which tends to have higher wage jobs, as an earlier Health Access report shows.

Assemblyman Ira Ruskin cited other economic studies that “have shown untargeted cuts have done more to harm the economy than well-targeted taxes” because, he said, the cuts would be taken out of the pockets of the people who live on such thin margins, that they would need to spend it.

Niello said that Republicans simply disagree that the public sector can provide a larger multiplier effect on the economy than the private sector.

Assemblyman Wes Chesbro asked about how the Republican proposal balanced increased need for services – due to increases in an elderly population and a downturn in the economy – against cuts.
“We need to control costs in all areas of government,” Niello said succinctly.

But Assemblywoman Ana Caballero pointed out that policymakers needed to make a choice: pay now, or pay later.

“The reason these safety nets are in place is so that we can get resources to people. The question is not polemic,” she said. Children need to stay healthy. People need workers to care for them in their home so they are not checked-in to more costly nursing home facilities later.

Democrats also tried to push Republicans on how flexible they would be on the tax issue — an area where Niello repeated the no-tax mantra.

On the floor, the Democrats’ pleas became increasingly desperate.
“We’ve heard it from every angle of the English language possible: we’re broke,” said Mike Davis. “And it’s only a matter of time before the rubber hits the road.”

“We don’t have a choice. We’ve moved to a position of great danger for our state,” said Wes Chesbro. “We ask our colleagues not to let it get worse.”

“We need to take one step backwards so that in the future, we can take two steps forward,” said Warren Furutani.

WHAT’S NEXT

Both the Democratic measures put up on Tuesday failed, with 0 or 1 vote. The Assembly will reconvene on Wednesday at noon to review and vote on the Republican “all cuts” measure.

Hanh Kim Quach is the Health Care Policy Coordinator for Health Access California. Before joining the organization, she worked as a journalist for nearly 9 years covering issues in California. 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.