Update on the State Budget Deliberations
The Conference Committee of Assembly and Senate members completed their work Tuesday evening to reshape the 2009-2010 state budget following the realization that the budget approved in February was more than $24 billion in deficit.
The Governor had made recommended cuts to nearly all state programs to cover the entire shortfall and opposes any new revenue measures. His proposed cuts included the elimination or virtual destruction of many programs which are key to the well-being of California seniors and other groups.
The Conference Committee was composed of six Democrats and four Republicans named by the leaders of each chamber. Many of their votes were along party lines. While they rejected the most drastic proposals made by the Governor, they made deep cuts that would have shocked senior advocates as recently as six months ago. While the Budget Conference Committee preserved most programs, it is important to remember that this struggle will continue as the Governor and legislative leaders try to reach agreement on the recommendations of the conferees and the full legislature works to enact a budget prior to July 1 (the deadline considered crucial to keep the state from running out of cash later in July). Since many of the major recommendations were by party line vote it is almost certain that the Legislature’s traditional stand off to reach a two-thirds vote will happen once again. The Governor has said he would not sign the budget approved by the Conference Committee.
Further, the Governor may decide to line item veto many aging programs after the Legislature acts as he did in September 2008. So, our advocacy shifts from the conferees to the full Legislature and the Governor. The important actions on the budget affecting seniors are summarized below.
Health
- Accepted the Governor’s recommendation to cut Medi-Cal funding by $1 billion. This includes $75 million in refunds from the federal government to the state for Medicare Part D drug expenditures (an action which should not affect Medicare participants). It may also include a requirement that all Aged, Blind and Disabled people in Medi-Cal be forced into managed care (something we have always opposed).
- Rejected the elimination of Adult Day Health Care, a $170 million program which serves senior and disabled people. They accepted a cut of $25 million and are working on language to restrict the program based on limiting the program to those in greatest medical need.
- Accepted the Governor’s plan to eliminate any funding increases for nursing homes and increased the provider fees to cover all Medicare funded beds.
- In other areas, the Committee also rejected the elimination of health insurance for 900,000 low income children in working families (but cut eligibility), and rejected total elimination of funding for HIV/AIDS programs (but made significant cuts).
Home Care
- Rejected the Governor’s plan to eliminate 92% of the clients of IHSS and adopted a plan (to be developed) to cut services for about 10% of the clients based on their level of dependency.
- Rejected the Governor’s proposal to cut salaries of caregivers to the minimum wage (but kept in place the earlier plan to cut salaries and benefits to $9.50 per hour which takes effect July 1st.
- Increased the proposal to save funds by identifying waste and fraud in the program from $32 million to $40 million, and increased the cuts to counties for administering the IHSS program.
- Cut by half the state support for IHSS clients’ share of cost for Medi-Cal support (a cut of $20 million).
Aging Services
- Rejected the Governor’s plan to eliminate funding for the case management programs (MSSP and Linkages) but authorized a $2.5 million cut to Linkages (about 25%).
- Made significant cuts to both Alzheimer’s programs (50% of Alzheimer’s Research and 30% of Alzheimer’s Day Care programs) for a total of $4.3 million).
- Rejected elimination of the Brown Bag program but eliminated the Senior Companion and Respite programs.
- Made cuts to the Caregiver Resource Centers that help family caregivers of dementia, brain injury and other patients (a 30% cut of $3.5 million.)
Revenues and Other Items
The Budget Conference Committee on a party line vote recommended an increase in state taxes on tobacco products, a new tax on the oil produced in California, taxes on Internet sales, and a roll back of corporate tax cuts passed in the past year. The Committee also rejected a plan by the Governor to borrow $2 billion from cities and counties. They proposed rolling a pay period for state employees into the following year to create a one-time savings.
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