Brown Unveils Budget Plan With Extensive Spending Reductions

TOPIC ALERT:

On Monday, Gov. Jerry Brown (D) released a proposal to enact deep spending cuts, extend tax increases and reorganize the government as part of an attempt to close the state's gaping budget deficit, the San Francisco Chronicle reports.

California's Department of Finance has estimated the state budget deficit at $25.4 billion through June 2012. The figure includes a $1 billion reserve fund.

Brown has proposed an overall budget of $127 billion, which includes $84.6 billion in general fund spending. The governor's proposed spending cuts would affect a wide range of areas, particularly the state's health and human service programs (Buchanan/Lagos, San Francisco Chronicle, 1/11).

Healthy Families

Brown's proposed budget would reduce spending by about $135.7 million by enacting changes to Healthy Families, California's Children's Health Insurance Program. Such changes would:

  • Increase premiums for families with annual incomes above 150% of the federal poverty level;
  • Establish copayments for hospital stays at $100 per day, with a $200 maximum per stay;
  • Increase copays for emergency department visits from $15 to $50;
  • Eliminate vision care; and
  • Set fees paid by managed care plans.

In-Home Supportive Services

The governor's proposed changes to the In-Home Supportive Services program would reduce state spending by $486 million (Sacramento Bee, 1/11).

The proposed changes would reduce the number of hours that IHSS workers can care for program beneficiaries by 8.4%, on top of a 3.6% cut imposed by former Gov. Arnold Schwarzenegger (R) last year. The Brown administration estimates that about 21,000 of the state's 456,400 IHSS beneficiaries would be exempt from the reduction in service hours because they otherwise would be sent to nursing homes.

In addition, Brown's proposal would tighten eligibility requirements for IHSS beneficiaries by requiring a physician's written certification that the services are necessary to prevent placement in a nursing home facility. The budget plan estimates that about 43,000 beneficiaries would lose their services as a result of the stricter requirements.

Medi-Cal

Brown's budget also proposes $1.7 billion in cuts to Medi-Cal, California's Medicaid program (Mishak, Los Angeles Times, 1/11).

For additional coverage of the Medi-Cal cuts, see today's California Healthline article on the issue.

Other Health-Related Cuts

Brown's budget proposal targets several additional health-related services. His plan aims to reduce spending by:

  • $1.5 billion by cutting spending on CalWORKS, California's welfare-to-work program;
  • $1 billion by asking voters to amend Proposition 10 to allow the state to use cigarette tax money currently being used by First 5 commissions;
  • $861 million by using voter-approved funds from Proposition 63 to replace general fund money currently being spent on mental health programs;
  • $750 million by cutting spending from the state's system of 21 regional centers that provide care for developmentally disabled residents (Sacramento Bee, 1/11);
  • $193 by eliminating the state's adult day health care program (Mishak, Los Angeles Times, 1/11); and
  • $192 million by reducing SSI/SSP grants to the federal minimum for low-income elderly, disabled and blind beneficiaries (Sacramento Bee, 1/11).

In addition, the proposed budget would require low-income people with HIV/AIDS to provide higher copayments for medications under California's AIDS Drug Assistance Program.

Shifting Services

As part of his budget plans, Brown proposed a major restructuring of social services that would shift management of several programs from the state government to the county level (de Sá, San Jose Mercury News, 1/10). Affected services include psychiatric hospitals and outpatient mental health treatment (York, Los Angeles Times, 1/11).

However, many county officials have expressed concern that the realignment of program administration might not be accompanied by a shift in funding to pay for the programs (San Jose Mercury News, 1/10).

Tax Changes

Another key part of Brown's budget plan looks ahead to a June special election that could include ballot measures designed to raise revenue (Goldmacher, Los Angeles Times, 1/11).

Such measures could generate about $12 billion in new revenue, primarily by extending temporary increases for income, sales and vehicle taxes (Kisken, Ventura County Star, 1/10).

Lawmakers React

Republican lawmakers said they do not support the idea of placing the tax issue before voters.

Democratic leaders in the state Senate expressed mild support for Brown's plan, saying they plan to hold hearings on the proposal as early as Thursday (San Francisco Chronicle, 1/11).

Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said Brown's proposals are different from Schwarzenegger's because they are more "across the board" and include a restructuring of state government (Ferriss, "Capitol Alert," Sacramento Bee, 1/10).

For additional coverage of Brown's budget plan, see today's Capitol Desk post.

Editorials

Headlines and links to editorials on Brown's budget plans are provided below.

Broadcast Coverage

Headlines and links to broadcast coverage of the governor's proposal are provided below.


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