Register to VOTE TODAY on key ballot measures with big budget impacts…

Monday, October 18, 2010



Main Budget Rejects Elimination of Programs, and Limits on Drugs and Doctors Visits;
Yet Budget Sets Health System Up For More Cuts Through Tax Breaks and Spending Cap

Voters to Have Final Say: Ballot Measures Would Have Major Impact On Budget
Propositions 22 and 26 Would Blow Billion-Dollar Hole in Budget, and Force New Cuts
Propositions 21 and 24 Would Prevent Cuts; Proposition 25 Would Help Get On-Time Budgets

Today is Final Day to Register to Vote on Key Ballot Measures That Would Impact Budget
A Health Access California Fact Sheet Describes the Propositions Impacting the Budget

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Today, Monday, October 18th, is the final day for Californians to register to vote for this November’s election (go to the Secretary of State’s website for more information). At stake in California is not just key races for Governor, Senator, and other statewide and legislative district contests, but several ballot measures that will have a direct impact on the state budget, and thus the health system on which we all rely.

After 100 days past the official deadline, capped by a marathon session going through the night, the California Legislature finally passed a state budget earlier this month, followed quickly by the Governor’s signature and steep line-item vetoes. A full wrap-up of the budget is below.

But California voters will have the final say this November and, depending on their votes on key propositions related to the budget (see the Health Access California voter guide), will either prevent or force additional cuts to health, education, and other vital services.

* Two propositions (Prop 22 & 26) would force billions of dollars more in cuts, in the current budget as well as in the future.
* Two propositions (Prop 21 & 24) would prevent additional cuts to health, education, and other vital services.
* One measure ensures corporations pay a fair share (Prop 24), while another helps corporations avoid paying for the health and environmental harm they cause (Prop 26).
* One measure helps us get an on-time budget (Prop 25), while others make the budget gridlock worse (Prop 22 & 26)

Additional cuts should be seen in the context of the major budget gaps of the past few years. This year’s budget attempted to close a $19.3 billion gap, after having to close a $24.3 billion budget gap in 2008 and a gap of $60 billion in 2009. The Governor’s budget office report it’s “an extraordinary three‑year period in the state’s fiscal history totaling budget solutions of $103.6 billion.”

THE NEW 2010-11 STATE BUDGET: Despite cost of living increases, the new 2010 Budget Act passed by the Legislature earlier this month holds General Fund spending essentially flat compared to the prior year — $86.6 billion in 2010‑11, compared to $86.3 billion in 2009‑10.

The budget does not raise new revenues to bridge the $19.3 billion budget gap, instead using by a combination of expenditure reductions, anticipated (and in some cases unrealistic expectations of) federal funds, and other solutions.

While the new Budget contains hundreds of millions of dollars of cuts to health care, it appropriately rejects the worst proposals made by Governor Schwarzenegger earlier in the year to eliminate and eviscerate key programs. Among those proposals were to limit prescriptions and doctor visits to Californians with Medi-Cal coverage, to eliminate Adult Day Health Care, CalWORKS, and other programs, and other draconian ideas.

Health cuts that were adoped by the legislature included the following (all figures focused on general fund dollars):

* $187.1 million by, as part of the new Medicaid waiver, enrolling seniors and with disabilities in mandatory managed care.

* $84.5 million for freezing hospital inpatient rates at current levels.

* $26.4 million (including associated support costs) by strengthening efforts to identify, prevent, and detect fraud in high‑priority areas, such as pharmacy, physician services, transportation, and durable medical equipment.

* $13.6 million by reducing radiology rates to 80 percent of the corresponding Medicare rate.

* $3.1 million by eliminating certain over‑the‑counter drug benefits (acetaminophen products) for adult beneficiaries.

* $1 million by no longer paying Medicare Part B premiums for beneficiaries whose income exceeds the Medi‑Cal threshold.

The Governor’s office suggests that the impacts of these cuts will be mitigated. The shift of seniors and people with disabilities to Medi-Cal managed care plans is part of a much broader Medicaid waiver, which has included discussion of consumer protections to ensure continuty of care and appropriate access. (Whether those consumer protections are fully in place depends on the final waiver agreement between the state and federal government.) The freeze on hospital rates is paired with the recently enacted hospital fee, which would draw down federal funds to provide for significant supplemental payments to these hospitals above regular rates. And the radiology rates were seen as higher than average, in some instances, the Medi‑Cal rate is as high as 120 percent of the Medicare rate–and so the reductions are hoped to not impact access to care.

Yet on top of these cuts, the Governor unilaterally used his line-item veto authority to make additional cuts to health and human services, and in the process harmed California families, our health system, and our state’s economic recovery.

The package of line-item vetoes included nearly $100 million in health care cuts, as well as major “blue pencil” reductions of $366 million in CalWORKS and $256 million in child care. With the line-item vetoes, the health care cuts include:

* $52.1 million to the Office of AIDS local assistance programs–a nearly 50% reduction from what the Legislature budgeted;

* $43.9 million cut to county administration for health services.

* $10 million for various clinic grants (a 90-100% reduction), especially in primary and rural health areas. While the Governor’s office cites money going to clinics from federal health reform and other sources, those funds don’t help all impacted clinics, and are needed for transition to reform and augmenting services, rather than simply maintaining capacity.

* $18 million for the Infectious Disease Branch’s Immunization Program.

* $7.6 million in local assistance funding for the AIDS Drug Assistance Program (ADAP).

* $5 million for the Maternal, Child, and Adolescent Health program.

* $1 million for the Prostate Cancer Treatment program (a nearly 25% reduction)

Legislative leaders have condemned the line-item vetoes, especially those eliminating “stage three” child care for low-income families, and vowed to revisit them in the new legislative session next year.

FUTURE RISK TO HEALTH PROGRAMS: Even with these significant cuts, the pain isn’t over. The legacy of this budget could force cuts into the future, from special interest tax breaks that starve the system to a constitutional spending cap.

This budget lacks new revenues, and in fact provides additional special interest tax breaks, digging our budget hole deeper–which will force additional cuts in the future. Without more revenues coming in, this budget can not be seen as anything but a short term fix. Additional tax breaks granted in this budget will worsen the budget shortfalls in the very near future, causing additional pressure to cut health and other vital services.

Another area of concern is the placement of a 2012 ballot measure for a constitutional spending cap proposal that, if passed, will handcuff the state’s ability to restore the health and other cuts in better economic times, or to make strategic investments in health and other key services. While voters rejected Governor Schwarzenegger’s proposals for similar spending caps in 2005 and 2009, the impact of the measure’s passage would be far-reaching into the future.

BALLOT MEASURES THIS NOVEMBER: But voters will make an immediate impact on the state budget–and our health system–this November.

Voters have the opportunity to prevent additional cuts with Propositions 21 and 24, and reform the process that gave us this late and flawed budget with Proposition 25. Alternatively, voters could unwittingly make the budget worse, and force additional cuts to health and other vital services, if they allow Propositions 22 and 26 to pass.

* Propositions 22 and/or Proposition 26 would blow a billion-dollar hole in our current California budget, forcing either new cuts in health and other key services, or new taxes. Because they would go into effect retroactively for 2010, passage of either measure would undo major budget solutions already in place, leaving the Legislature scrambling to either raise taxes or cut core services even more.

Both measures would also impact budgets in the future. Proposition 22 would protect local government redevelopment agencies—at the expense of other state priorities like health care.

Proposition 26 makes it harder to impose fees on corporations to remedy the health or environmental harm they cause. If the state can’t impose those fees, those costs then have to be paid for by the general taxpayer, either by additional taxes or cuts in other areas like health care.

* California voters can vote against additional cuts, but also improve both the process and outcome of state budget. This November, Californians can vote for a fairer budget that prevents additional cuts by supporting Propositions 21 and 24.

Proposition 21 gives all California motorists free access to state parks, in return for a small vehicle license fee increase of $18. It raises enough money to better fund the parks, and to free up resources to prevent cuts to health, education, and other key services.

Proposition 24 maintains corporate taxes at the same level they are now, rather than allowing a billion-dollar special interest tax break to go into effect that would starve our health and education systems.

* Those corporate tax giveaways were the product of our flawed budget process in last year’s budget. That budget process can be improved with the passage of Proposition 25, which allows for a budget to be passed by majority vote, and would withhold pay from legislators when the budget is late. Last year, a handful of legislatures demanded these corporate tax breaks–even while core services were being cut–as the price of their vote to pass a budget. This year, a handful of legislators were able to hold the budget hostage–and 100 days late–in order to get special tax giveaways, appointments, and special interest policy changes. Proposition 25 can stop the legislative hostage-taking by a few so we can finally pass a budget that serves all of California.

This November, California voters will make key budget decisions that will frame the work by a new Governor and legislature. But Californians can only participate in these crucial decisions if they are register to vote by today’s deadline.

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