Gov. Jerry Brown’s revised budget for the coming year proposes deeper cuts in the health and social safety net, with hospitals, nursing homes and home care for disabled people and older adults taking the biggest hits.
Brown officially disclosed that the projected shortfall for the coming year has reached $16 billion. That’s the difference between projected tax collections and the amount it would take to fully fund all of today’s programs for another year at levels required by current law.
To close that gap, Brown proposed cuts in projected spending for almost every major program except kindergarten through 12th grade education, and he reiterated his call for voters to approve an increase in sales and incomes taxes this November. If Brown’s ballot measure fails, he said, the schools would bear the brunt of the additional spending cuts required to balance the budget.
But for now he’s aiming squarely at the state’s already tattered safety net.
Monday’s proposal, among other things, would cut hundreds of millions of dollars from hospitals and nursing homes, reduce in-home services for the disabled, and impose indirect price controls on subsidized child care.
Brown is proposing to shift about $200 million to the state’s general fund from a fee on hospitals that was designed to bring more federal money to California. The fee revenue is dedicated to care for the poor in the Medi-Cal program and is thus matched by the feds. But under an agreement with the hospital industry, that money was supposed to stay with the hospitals. Now a big chunk of it would be shifted to other state priorities.
The governor is proposing a similar shift of money raised by a fee on nursing homes. The state’s general fund would gain about $50 million from that shift, which would deny the nursing homes a planned, 2 percent increase in rates in the coming year.
Brown is also renewing his call for cuts in services to the home-bound disabled and older adults, a frequent target in recent years.
He is proposing a 7 percent, across the board reduction in these services, doubling an existing cut that is due to expire on June 30.
Beyond that, Brown wants to end domestic services – laundry, cooking, cleaning, etc – for recipients who live with others, reasoning that those things can be provided by the roommates.
In subsidized child care, Brown is proposing to limit payments to licensed providers to the 40 percent of the prevailing market rates, down from today’s 85 percent. This is expected to save about $185 million a year.
Diana Dooley, Brown’s secretary for health and human services, told reporters in a conference call that the proposed cuts are painful be necessary – given the state’s revenue shortage.
“The problem we have, and we will always have in Health and Human Services, is this is where most of the spending is,” Dooley said. “The spending is on education and health and humans services to a very large degree. The only places you can cut back is the places where you are spending.”
Brown’s revised budget did ease up on the poor in a couple of places.
In the CalWorks program, for example, the governor in January proposed to end grants to families after 24 months if the parent was not fulfilling federal work or job training requirements. Now he is saying those payments can continue if the parent is getting an education.
Most of Brown’s health and welfare proposals are expected to meet strong opposition in the Legislature. Democrats generally refused to make cuts by March 1 as Brown requested in January, reasoning that those cuts might be unnecessary if the economy recovered more quickly than expected.
Now the state’s shortfall has nearly doubled, and Democrats will be hard-pressed to find alternatives to what Brown is proposing, especially since these cuts already assume that the voters will approve the tax increase on the November ballot.
State Senate Leader Darrell Steinberg’s reaction to the latest proposals was muted. He called the economy a “stubborn beast” and said lawmakers’ “work obviously is not done.”
“The governor is doing a good job and has laid out a difficult proposal,” Steinberg said. “We are not looking for a big public fight over the next month but we will work assertively with the governor and the Assembly to find some alternatives to the most egregious cuts.”