Los Angeles Times – Jerry Brown’s plea to voters: ‘Please increase taxes temporarily’

http://www.latimes.com/news/local/la-me-state-budget-20120515,0,1532582.story
By Chris Megerian and Anthony York, Los Angeles Times

Gov. Jerry Brown’s proposal for closing California’s $16-billion funding gap includes 4-day state workweeks and Medi-Cal cuts. He warns that cuts will be even more severe if voters reject tax hikes on the November ballot.

May 15, 2012
SACRAMENTO — Gov. Jerry Brown released a plan to close California’s rapidly growing deficit by switching state offices to a four-day week, slashing welfare benefits and healthcare for the poor and relying on a variety of short-term fixes — all in the hopes that voters will give the state some breathing room by raising taxes in November.

The governor, who unveiled his revised budget proposal in the Capitol on Monday, is facing a nearly $16-billion budget gap, far larger than the $9.2 billion he predicted in January. He warned that the deficit could grow significantly if voters reject his proposed ballot measure to raise the state sales tax and income levies on the wealthy.

That would trigger additional cuts, including reductions in public education equivalent to lopping three weeks off the school year, he said.

“I’m linking these serious budget reductions … with a plea to the voters: Please increase taxes temporarily,” Brown said at a morning news conference.

His $91.4-billion spending plan sets up confrontations with interests that are supporting his tax campaign. To save $400 million, he’s negotiating with public labor unions to reduce the state workweek to 38 hours, worked over four days — a 5% cut in payroll costs. And he’s pushing fellow Democrats in the Legislature to accept steep cuts in social services, which they have so far resisted. Brown acknowledged that budget negotiations will be especially challenging.

Brown’s announcement is the starting gun on a month of intense debate on the spending plan, which the Legislature must pass by June 15 so it can go into effect at the start of the new fiscal year July 1.

The proposed cuts would cover a shortfall caused by lower than projected tax receipts, an increase in school spending under a voter-approved funding formula and the refusal by the federal government and the courts to allow cuts the state had already counted.

In addition to slashing expenditures, the governor is trying to patch the unexpectedly large budget gap with any spare change he can find, including $300 million the state received as part of the national settlement on mortgage wrongdoing and $1.4 billion in funds surrendered by local redevelopment agencies in January. His plan also relies on some borrowing and raiding dedicated funds to help pay the bills.

Brown, who promised voters while campaigning in 2010 that he would end years of budget trickery in Sacramento, acknowledged that he was relying on “one-time revenues to handle one-time problems.”

He added: “This is the best that I could do.”

The revised spending plan would cut Medi-Cal, the state’s healthcare program for the poor, by $1.2 billion. That includes slicing funds for hospitals and nursing homes.

Home care for the elderly and disabled is also on the chopping block, with a proposed $225 million cut that would include 7% shaved from aides’ hours. Brown would also push forward with $1.3 billion in reductions to welfare and child care.

“You name it, and we’ve got to cut it,” he told reporters Monday afternoon in Los Angeles, where he had flown to hold another news conference.

Advocates for the poor and ailing criticized the Brown administration’s choices.

“It’s the same people year after year who are the victims of the budget ax,” said Deborah Doctor, a lobbyist with Disability Rights California.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said his Democratic caucus would propose smaller cuts to social service programs such as welfare and home care.

“There is a balance between making necessary cuts, which we will do, and maintaining and preserving essential services for people, especially people most in need,” Steinberg said.

He and other Democratic lawmakers resisted making cuts the governor requested earlier this year, causing the state’s deficit to grow by $400 million, according the Brown administration.

Brown widened his earlier proposed cuts to include temporary reductions in court funding, including a delay in 38 construction projects. The proposal would force trial courts to reach into their reserve funds to pay the bills.

California Chief Justice Tani G. Cantil-Sakauye, who called for an emergency meeting of judicial leaders Monday, called the cuts “devastating and disheartening.”

“They will seriously compromise the public’s access to their courts and our ability to provide equal access to justice throughout the state,” she said in a statement.

Even Brown’s gloomy forecast includes some economic growth. It counts on a $1.5-billion boost from Facebook’s Wall St. debut and a sharp uptick in new home construction. And the governor has not backed down from his boldest — and costliest — proposals.

“I am a buoyant optimist,” he said. “We’re going to build high-speed rail.”

The spending plan includes the sale of $3.5 billion in voter-approved bonds to fund the first segment of a train linking Southern California and the Bay Area.

Republicans on Monday sharply criticized Brown for pushing for new taxes.

“We believe this updated proposal is part of the governor’s strategy to try and fool Californians into accepting a costly tax increase as a necessary step,” said a statement from Assembly Republican Leader Connie Conway (R-Tulare) and Assemblyman Jim Nielsen (R-Gerber).

Without the taxes, Brown said, there would be an extra $6.1 billion in cuts. Besides $5.5 billion in reductions in K-12 schools and community colleges, the University of California and California State University systems would be cut by $250 million each. Other popular programs, such as lifeguards at state beaches, would also get the ax.

University officials unsuccessfully pleaded with Brown to increase their funding to help avoid tuition increases or enrollment cuts. Without more funding, UC students could end up paying 6% more, and Cal State students, who already are set to pay a 9% hike next fall, will face more limits on enrollment in the spring. Both systems warn of much more severe measures if voters reject the proposed November tax measure.

Brown said he was open to suggestions on better ways to close California’s budget gap but said that the state had to live within its means. Anticipating strong reactions to his proposal, he asked for “a modicum of stoicism.”

The Sacramento Bee: Gov. Jerry Brown’s administration wants health care change, with or without federal law

By David Siders and Kevin Yamamura dsiders@sacbee.com
Published: Friday, Mar. 30, 2012 – 12:00 am | Page 1A
Last Modified: Friday, Mar. 30, 2012 – 7:52 am

Gov. Jerry Brown’s administration vowed Thursday to continue pushing forward elements of the federal health care overhaul in California, even if the U.S. Supreme Court strikes it down.
If the court does rule the federal law unconstitutional, state Health and Human Services Secretary Diana Dooley said California should at least consider enacting its own universal health care legislation, including requiring every Californian to buy insurance.
“I think that we should be committed to making this system more rational than it is today, and improving the health of the people of California,” Dooley said in an interview. “If we ask the insurance plans to take everybody and insure everybody with no screens or pre-existing conditions, then we have to have everybody buying some level of health insurance to meet their responsibility to the system.”
She said whether the administration sponsors such legislation would depend on “where we are and what the conditions are at that particular time.”
Dooley’s remarks came a day after the Supreme Court finished three days of oral arguments over President Barack Obama’s signature health care law.
At issue is whether Congress can require people to buy insurance and, separately, whether lawmakers overstepped in pressuring states to expand Medicaid coverage.
In 2010, California, amid urging from the White House, became the first state in the nation to enact legislation establishing a public health insurance marketplace to implement the Affordable Care Act.
The insurance exchange is expected to serve more than 2 million Californians beginning in 2014, many of them now uninsured residents who do not qualify for existing public health care or cannot afford coverage on the open market.
Through Medi-Cal, the state’s version of Medicaid, California provides coverage for nearly 8 million low-income residents, including children and their parents, disabled individuals and the elderly. A separate program, Healthy Families, serves 878,000 children up to age 19 whose families earn too much to qualify for Medi-Cal.
Under the federal health care overhaul, the federal government would cover most costs for new enrollees such as single adults and parents who cannot qualify for Medi-Cal. From 2014 to 2019, California could receive $45 billion to $55 billion from the federal government, while the state would contribute an additional $3 billion to $6.5 billion, according to the Kaiser Commission on Medicaid and the Uninsured.
“Just from her (Dooley’s) point of view, from the agency she manages, it’s an infusion of literally billions of dollars into our health care system and our economy that is pending here,” said Anthony Wright, executive director of Health Access California, an advocacy group.
Wright said an insurance exchange without federal subsidies “could still provide an easy, consumer-friendly marketplace that doesn’t exist now in a very complex and confusing world.”
But compared to the promise of the federal health care law, he said, “it won’t be the same thing.”
He said “there are some portions of the reforms that we can go forward with” but that “the key thing is money.”
The California health exchange would bring together private insurers to serve new health care enrollees, subsidized by those federal and state dollars.
But it is difficult to know how any part of the program will fare until the Supreme Court reaches a decision, expected by the end of June.
If the high court strikes down the mandate that everyone carry health insurance, it is unknown how successfully the exchange can operate. Insurers were counting on the mandate to ensure they could afford to cover high-risk individuals who have health conditions and deliver health care at an affordable price.
“We’re all on pins and needles on the Supreme Court stuff,” said Robert Ross, a health exchange board member and president and CEO of the California Endowment, a health care foundation. “We still have 7 million uninsured in the state, and we still have out-of-control health care costs.”
Ross said federal funding is “the wild card in all of this.”
The idea of creating a universal health care system in California has percolated for decades. In 2003, Gov. Gray Davis, a Democrat, signed legislation that would have required employers of more than 50 people to provide their workers with health insurance or pay a fee. The following year, voters repealed the measure in a referendum.
More recently, legislation to create a universal health care system stalled in the state Senate earlier this year. Opponents objected to the cost and to the bureaucracy such a system would require.
Following oral arguments this week, many court observers have concluded justices could strike down all or part of the current federal law.
If the law is unraveled, it is unclear whether the state could maintain some provisions already in effect, including not allowing most insurers to deny coverage to children because of pre-existing conditions and allowing people up to age 26 to remain on their parents’ policies.
Dooley said she thinks there is a “very good chance” the Supreme Court will rule in the government’s favor. If not, she said, it may leave certain federal subsidies in place.

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