Judges rule for and against cuts…

In the courts, we’ve won one and lost one.

First, the victory: Kevin Yamamura reports in sacbee.com’s Capitol Alert that today the federal appeals court ruled against Governor Schwarzenegger’s cuts to health and human services that include Medi-Cal reimbursement rates for hospitals and pharmacists and In-Home Supportive Services wages:

“The Ninth Circuit agreed with lower court decisions that granted preliminary injunctions against the cuts because California did not comply with the federal Medicaid Act. The cuts were contained in budget agreements over the past two years.

The court decisions not only have blocked past budget cuts, but they could also preclude the state from pursuing similar ways of solving its current $19.9 billion budget deficit. Schwarzenegger, for instance, proposed cuts to IHSS to save roughly $950 million in his January budget plan, but court rulings for now suggest that those solutions will be legally difficult to impose.

The court previously determined that under the Medicaid Act the state Department of Health Care Services must set rates “that bear a reasonable relationship to efficient and economical hospitals’ costs of providing quality services, unless the Department shows some justification for rates that substantially deviate from such costs.

The Ninth Circuit on Wednesday determined that the state did not conduct the analysis required under the Medicaid Act to consider the impacts of cuts to IHSS wages or reimbursement rates. In the case California Pharmacists v. Maxwell-Jolly, Judge Milan D. Smith wrote that the court now has handed down “multiple decisions” on how to comply with the Medicaid Act.

Schwarzenegger, for instance, proposed cuts to IHSS to save roughly $950 million in his January budget plan, but court rulings for now suggest that those solutions will be legally difficult to impose.”

On Tuesday, Yamamura writes of a different outcome in court regarding the governor’s cuts: This time a judge ruled Schwarzenegger’s line-item vetoes to reduce funding for several programs were constitutional:

“In a 3-0 decision, Justice J. Anthony Kline wrote that the challenge failed to show that Schwarzenegger had overstepped his executive authority in further reducing expenditures during last July’s budget revision. The case, St. John’s Well Child and Family Center v. Schwarzenegger, called into question seven line-item vetoes worth $288 million, cutting programs ranging from the Office of AIDS to Healthy Families.

Last year’s situation was unique because lawmakers and Schwarzenegger approved the budget act in February, four months early. Because of a further drop in revenues and voter rejection of budget solutions, state leaders had to solve for a new $24 billion deficit last summer.

The language of the July budget revision contained reductions of the budget act, whereas normally the summer budget agreement spells out how much money the state will spend on each program. Governors have the ability to use their line-item veto on “appropriations.” Democrats and social service groups claimed that the July reductions did not qualify as appropriations.”

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