The budget battle gets bitter

HEALTH ACCESS UPDATE
Tuesday, December 16th, 2008

ASSEMBLY AGONIZES OVER BUDGET
* Assembly Budget Committee vets Republican Budget Proposal
* Full body debates, but fails to pass, $19 billion package of cuts and revenues
* Assembly to vote on Republican proposal Wednesday

* Also: Healthy Families to avoid waiting list for children’s coverage, for now
* ALERT: Join Budget Actions This Friday, in Bay Area, Fresno, and Los Angeles

New on the Health Access WeBlog: Assembly Angst, More Updates and Links; Stay of Execution for Healthy Families, New Republican Budget; Cuts vs. Revenues

The state Assembly on Tuesday started early in the morning and went late into the night in an attempt – a week before Christmas – to shore up the state’s rapidly deteriorating budget — which is estimated to have a deficit of $42 billion from now through June 2010. By the end of the day, lawmakers had vetted two proposals, one by Republicans that would cut services by $15.6 billion (on top of over $10 billion in cuts already enacted this year), and one proposed by Democrats which contained $7 billion in cuts and $11.3 billion in new revenues.

Neither of the proposals was new. The Republican proposal repeated many of the severe cuts that the Legislature has previously rejected. The Democrats combined revenues proposed by Gov. Arnold Schwarzenegger, and some of the cuts proposed in November. What was marked about the day, though, was the tone.

Democrats hit a high note of exasperation. In most speeches, Democratic lawmakers noted how the combination of cuts and taxes was a bitter pill for them to swallow and that Republicans needed to give on the issue of taxes. All but three Republicans have signed a Grover Norquist no-tax-increase pledge from the Americans for Tax Reform group in Washington, DC.

“This is not fun for any one of us,” said Assembly Budget Chairwoman Noreen Evans. “We are talking about cutting programs that we came here to protect …and yet here I am asking you to cut those very programs.’’

And finally, said Jared Huffman: “We ask you to elevate the people of this state above Grover Norquist, and we ask you to elevate your oath of office above the pledge to Grover Norquist.’’

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 acually 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.

Health Access will continue to monitor the Legislature and budget. For more information, contact the author of this report, Hanh Kim Quach, at hquach@health-access.org.

ANTI-BUDGET CUT ACTIONS THIS FRIDAY

Health and human services advocates continue to organize around the state in opposition to deeper cuts and to demand a shared solution that includes taxes and revenues to prevent further cuts to health, human services and schools.

Bay Area: The Bay Area Budget Coalition is sending teams to nine legislators’ offices in the East Bay with the message, “Be our Holiday Hero, take bold action to protect and invest in California ’s people!” Carolers will sing customized holiday carolers to highlight the need for new revenues to prevent further cuts, present legislators with holiday cards, and invite legislators to be a Holiday Hero. More carolers are needed at all offices. For more information or to RSVP: Jessica Rothhaar, jessicar@health-access.org or 510-873-8787 ext. 107. Here’s the schedule:

10am: Group A: 2694 Bishop Dr, San Ramon (Asm. Buchanan)
Group B: 2801 Concord Blvd , Concord (Sen. DeSaulnier)
11am: Group A: 39510 Paseo Padre Pkwy, Ste 280 , Fremont (Asm. Torrico)
Group B: 815 Estudillo, Martinez (Asm. Torlakson)
12noon: Group A: 22320 Foothill Boulevard, Suite 540 , Hayward (Asm. Hayashi)
1:00pm: Group A: 1057 MacArthur Blvd. Suite 206 , San Leandro (Sen. Corbett)
2:00pm: Groups A + B: 1515 Clay Street , Oakland (Asm. Swanson & Sen. Hancock)

Fresno: The California Partnership is organizing a delegation to visit Assembly GOP leader Mike Villines’ Fresno district office at 1pm on Friday 12/19, to deliver hundreds of empty boxes signifying what many families will get for Christmas. Advocates are including personal messages telling Villines what the holidays look like for low-income families who are already suffering from the severe cuts made to health and other vital services. Their message to the Republican leader is, “In the spirit of the season of giving, it’s time for the Republicans to give a little in the budget negotiating process, instead of just taking away from low-income families.”

Health and human services advocates in Fresno are welcome to participate. For more information or to RSVP: Nancy Berlin, nberlin@communitychange.org or (213) 385-8010.

Los Angeles : The LA Stop the Cuts Coalition is supporting Friday’s Villines action by mailing empty boxes and unpaid bills to Villines district office at 6245 N. Fresno Street, #106 , Fresno , CA 93710

To be added to the list for updates on either the Bay Area or Los Angeles budget coalitions, contact Jessica Rothhaar (Bay Area) at jessicar@health-access.org or Nancy Gomez (Los Angeles) at ngomez@health-access.org.

Health Access California promotes quality, affordable health care for all Californians.
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