Tuesday, April 19th, 2005


  • “Live Within Our Means Act” Would Give Unilateral Power to Governor, Force Health Cuts
  • Sign-On Statement to Support Solutions Beyond Cuts and Caps

As legislative budget subcommittees dutifully review the proposed cuts by Governor Arnold Schwarzengger here in Sacramento, a bigger battle brews at the ballot box, over not just next year’s budget but also budgets into the future.

GOVERNOR’S BUDGET INITIATIVE: As part of his ongoing push for a special election this November, Governor Schwarzenegger has endorsed the “Live Within Our Means Act,” for which signatures are now being collected. The initiative would impose a new cap on state spending, and give the governor unilateral powers to cut spending in the event revenues fall below expectations. (Among other things, it also would eliminate the state’s obligation to restore $4 billion in school spending under Proposition 98.)

Even though the Governor withdrew one of his ballot measures on pension reform, he has repeatedly said he is going forward with a special election with his budget proposal. The text of the initiative is at the Attorney General’s website, at:

This proposal heading for the ballot has far-reaching consequences for health care and other vital services. The California Budget Project has published a full analysis of the proposal, entitled “Limiting the Future?: What Would the ‘Live Within Our Means Act’ Mean for California?” The analysis is available at their website, at:

POWER GRAB: The proposal would give the Governor broad new powers to make cuts to health care and other vital services without any oversight, public review, or legislative approval. In the past several years, health care advocates have been successful in preventing many cuts that would have denied access to health coverage and care to hundreds of thousands of Californians. While some cuts were made, the worst were rejected as too severe, in some cases by legislators of both parties. This Health Access Budget Cuts Scorecard lists the cuts that have been proposed by two Governors in the past few years, both those made and those rejected.

With the new powers under this proposal, a Governor could have made many of these cuts unilaterally. Last year, Governor Schwarzenegger proposed to cap enrollment in Healthy Families and many other public health insurance programs that serve children, AIDS patients, and people with disabilities; and to cut provider rates for health care providers that care for patients on Medi-Cal. In both cases, he withdrew them after the legislature rejected them, but if this initiative had been law, he could have made those cuts directly.

FORCED CUTS: In many instances, the cap would force cuts in existing programs–even when the funds are available. Since the cap would limit spending based on revenue growth in the three previous years, it would force cuts in health and other vital services even when the budget is balanced, the economy is improving, and more revenues are coming in.

The new cap would be in addition to the existing state appropriations limit already in place, would also be placed not just on the general fund, but on money raised by specific taxes and fees, even those that are voter approved, such as Proposition 99 funds for health programs, or Proposition 10 funds for early childhood programs. This would prevent the state from using available, voter-approved funds for these important services.

This new spending cap would make it harder for the state to make the needed improvements in our health care system, including expanding coverage to the six million uninsured. And finally, the governor’s budget initiative would actually place more spending on “autopilot,” by making it harder for the legislature to suspend Proposition 42 to fund certain transporation projects, or Proposition 1A, to provide some funding to local governments. That will even further increase the pressure to make cuts in other, unprotected areas, such as health and human services. Health care services are particularly vulnerable, since the need for them often increases during economic downturns, when the state is looking to make budget cuts.

The Los Angeles Times editorialized against the Governor’s budget initiative yesterday, in an article appropriately entitled, “A Really Bad Idea.” It is available at their website at:,0,7711770.story?coll=la-news-comment-editorials

SIGN-ON STATEMENT: For the last several years, health advocates have not only worked to prevent health care cuts, but also joined with other coalitions in support of a balanced solution to the budget crisis, to consider choices beyond cuts and caps. Since the budget deficit was partially created due to the range of tax cuts made in the past decade, a balanced solution would not just make cuts, but also raise revenues, such as restoring the upper-tax brackets on high-income earners, as Governors Reagan and Wilson did.

Health advocates are continuing that effort with other “budget allies,” to urge for a responsible budget solution that is balanced, and doesn’t hinder the ability to meet future needs. The statement of principles below is an attempt to get organizations from different issue areas to support a broad vision and statement around the budget. The statement includes opposition to the type of spending cap that Governor Schwarzenegger is proposing.

ALERT: Have your organization endorse this broad statement on budget principles and goals, so we may have it by the May revision of the budget, on May 13th, 2005. Please fill out and return the form below. A one page fax-back form is available at the Health Access website, at:


We believe California’s budget should invest in California’s future:

  • We believe in a California that provides high-quality public services for all Californians, protects consumers, the environment, and our quality of life, builds the infrastructure we need to prosper, and that fosters opportunity, economic growth, and strong and vibrant communities.
  • We believe that a responsible California budget would keep its commitment to meet the basic needs of our children, our seniors, our families, and our future. We believe there are budget choices beyond cuts.
  • We believe in a balanced budget that invests in the future, rather than one that mortgages our future with more borrowing to fill a structural budget gap.

We support a balanced solution to the budget crisis:

  • We support a balanced solution to the budget crisis, rather than a budget that seeks to solve the problem only through cuts and borrowing.
  • We support raising revenues needed to prevent cuts, including closing tax loopholes, eliminating some of the tax cuts of the last decade, and updating our tax system to reflect our changing economy.

We oppose automatic mechanisms to cut vital and needed services:

  • We oppose policies, in the legislature and on the ballot, which would hinder the ability of the State to meet the current and future needs of all Californians.
  • We oppose proposals that would grant the Governor new powers to make unilateral cuts; formulas that would impose automatic across-the-board cuts; stricter spending caps; and other policy changes that seek to “starve the public sector” and which would damage healthcare, education, and other vital services that all Californians depend on.

A one page fax-back form of this statement is available at:

___ Our organization signs on to the above statement.
___ Please keep our organization informed about ballot campaign efforts against proposals to institute new gubernatorial powers to unilaterally make cuts, stricter spending caps, and/or formulas for automatic across-the-board cuts.

ORGANIZATION: __________________________________________

AUTHORIZING SIGNATURE: _________________________________

CONTACT: ________________________________________________

ADDRESS: _________________________________________________

PHONE NUMBER: __________________________________________

E-MAIL: ___________________________________________________

Please return to: Budget Allies, c/o Louise Jones, Health Access,,
or Fax-back at 916-497-0921

Health Access California promotes quality, affordable health care for all Californians.
VIEW THE FILE Uncategorized

Leave a Comment

%d bloggers like this: