Governor's Budget Initiative

As part of his ongoing push for a special election this November, Governor Schwarzenegger has endorsed the "Live Within Our Means Act," for which signatures are now being collected. The initiative would impose a new cap on state spending, and give the governor unilateral powers to cut spending in the event revenues fall below expectations. (Among other things, it also would eliminate the state’s obligation to restore $4 billion in school spending under Proposition 98.)

Even though the Governor withdrew one of his ballot measures on pension reform, he has repeatedly said he is going forward with a special election with his budget proposal. The text of the initiative is at the Attorney General's website, at:
http://ag.ca.gov/initiatives/pdf/sa2005rf0067_amdt_1_ns.pdf

This proposal heading for the ballot has far-reaching consequences for health care and other vital services. The California Budget Project has published a full analysis of the proposal, entitled “Limiting the Future?: What Would the 'Live Within Our Means Act' Mean for California?” The analysis is available at their website, at:
http://www.cbp.org/2005/0504bb_lwom.pdf

POWER GRAB: The proposal would give the Governor broad new powers to make cuts to health care and other vital services without any oversight, public review, or legislative approval. In the past several years, health care advocates have been successful in preventing many cuts that would have denied access to health coverage and care to hundreds of thousands of Californians. While some cuts were made, the worst were rejected as too severe, in some cases by legislators of both parties. This Health Access Budget Cuts Scorecard lists the cuts that have been proposed by two Governors in the past few years, both those made and those rejected.
http://www.health-access.org/docs/HealthCuts04ScorecardAug3FINAL.doc

With the new powers under this proposal, a Governor could have made many of these cuts unilaterally. Last year, Governor Schwarzenegger proposed to cap enrollment in Healthy Families and many other public health insurance programs that serve children, AIDS patients, and people with disabilities; and to cut provider rates for health care providers that care for patients on Medi-Cal. In both cases, he withdrew them after the legislature rejected them, but if this initiative had been law, he could have made those cuts directly.

FORCED CUTS: In many instances, the cap would force cuts in existing programs--even when the funds are available. Since the cap would limit spending based on revenue growth in the three previous years, it would force cuts in health and other vital services even when the budget is balanced, the economy is improving, and more revenues are coming in.

The new cap would be in addition to the existing state appropriations limit already in place, would also be placed not just on the general fund, but on money raised by specific taxes and fees, even those that are voter approved, such as Proposition 99 funds for health programs, or Proposition 10 funds for early childhood programs. This would prevent the state from using available, voter-approved funds for these important services.

This new spending cap would make it harder for the state to make the needed improvements in our health care system, including expanding coverage to the six million uninsured. And finally, the governor's budget initiative would actually place more spending on "autopilot," by making it harder for the legislature to suspend Proposition 42 to fund certain transporation projects, or Proposition 1A, to provide some funding to local governments. That will even further increase the pressure to make cuts in other, unprotected areas, such as health and human services. Health care services are particularly vulnerable, since the need for them often increases during economic downturns, when the state is looking to make budget cuts.

The Los Angeles Times editorialized against the Governor's budget initiative yesterday, in an article appropriately entitled, "A Really Bad Idea." It is available at their website at:
http://www.latimes.com/news/opinion/editorials/la-ed-ballot18apr18,0,7711770.story?coll=la-news-comment-editorials