I’m watching the Assembly Budget hearing on the governor’s mid-year cuts proposal. Assemblyman Dave Jones has just asked for a report on the economic impact of the cuts proposed.
Department of Finance has not done the analysis yet. …but we have!
Specific to health care cuts, the governor proposes $141.9 billion in reductions, which would result in about 400,000 adults being denied Medi-Cal even though they would ordinarily qualify. It includes eliminating dental benefits, podiatry benefits and other vital services for those making about $1,000 a month.
Health Access did such an analysis of the ripple effects based on the May Revise budget earlier this year.
Here is our take on the current proposals:
2008-09 impact of proposed cuts
- 08-09 state funds saved: $141.9 million
- 08-09 federal funds lost: $93.4 million
- NOTE: This is on top of enacted budget which reduced general fund by $443 million, and lost $357.7 million in federal funds.
- $235.3 million in business activity lost (multiplier effect)
- 1,853 jobs lost
- $84 million in lost wages
2009-10 impact of proposed cuts
- 09-10 general fund saved: $714.7 million
- 09-10 federal funds lost: $442.6 million
- $1.12 billion in business activity lost (multiplier effect)
- 8,781 jobs lost
- $398.3 million in lost wages
All of these figures come on top of the losses already sustained this year.
- $901.4 million in business activity (multiplier effect)
- 7,097 jobs lost
- $321.9 million in lost wages