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Office of the Chancellor / Public Affairs
Monday, July 21, 2003
 

Sacramento Bee 7-21-03

Budget deal may downplay cuts
The parties agree on a lot -- but is the evolving plan a solution or a stopgap?
By John Hill

 

In the clamor over California's budget crisis, one simple fact often has been overlooked: Both sides have agreed to much of the solution for bridging the awe-inspiring $38 billion shortfall.
Some of it will be done with cuts to state programs. People will pay more for child care or get by with less-durable dental caps.

But about three-quarters of the solution so far consists of measures other than cuts, such as putting off spending, borrowing, changing accounting methods and reaping a windfall of new federal money. It's also likely that the budget will depend on $4.2 billion from the tripling of the car tax to the pre-1998 level.

As a budget deal takes shape in the Senate, one of the major questions is whether it rights the balance between spending and revenue -- with more cuts or increases in taxes and fees -- or resorts even more to temporary fixes.

The answer will determine whether the budget crisis that took hold two years ago will linger.

And for many state operations, it could mean the difference between belt-tightening and fundamental changes in what state government does.

So far, the cuts accepted by both sides have avoided, for the most part, the total elimination of programs or widespread cuts in basic services.

Medi-Cal recipients will be asked to fill out paperwork twice a year instead of just once to verify they are eligible to receive government health care.

About 100,000 people would be knocked off the Medi-Cal rolls, according to fiscal officials. The two sides in the budget debate disagree about how many of these people are truly ineligible and how many will lose their coverage because they can't keep up with the paperwork.

"From our standpoint, it's a very cynical approach, putting barriers in place for the express purpose of having people fall off," said Anthony Wright, executive director of Health Access, a statewide coalition that advocates for health-care coverage.

Lawmakers so far have balked at eliminating entire categories of Medi-Cal coverage. But they have agreed to pare dental services for adults.

Dentists will be required to take X-rays of patients before filling cavities, to guard against fraud. The state will no longer pay for a procedure called "deep cleaning." And patients would get stainless-steel caps on inner teeth instead of more durable porcelain.

The state will no longer pay fees to people who help others sign up for Medi-Cal or renew their eligibility.

That could keep a significant number of people from getting state-run health care, Wright said. About 60 percent of the children in the state's Healthy Families program signed up with the help of such agents, who received $50 for new applicants and $25 for renewals, he said.

The health-care cuts could go much deeper. Proposals have included sweeping eliminations of benefits such as psychiatric care or medical supplies.

"We're still very concerned," Wright said.

But lawmakers seem to have backed off some earlier proposals. The state is getting a big influx of federal money for Medi-Cal, contingent on the state not changing eligibility requirements past a certain date. So lawmakers are reluctant to risk the money by tinkering with the rules.

Another proposal, to slash the rates paid to doctors and others who provide services to Medi-Cal patients, has failed to gain traction with either party.

In social services, the state is likely to freeze the rates paid to companies that provide services such as transportation and help with everyday tasks to people with developmental disabilities.

One such provider is Nancy Chance, executive director of Training Toward Self Reliance in Sacramento. The organization helps about 300 clients with developmental disabilities make budgets and do their banking, shop for groceries and find housing.

In one recent case, Chance said, a worker intervened when a car dealer charged a client $4,000 more than the sticker price.

Training Toward Self Reliance hasn't received a rate increase for two years, Chance said. In normal times, the organization would document its costs to justify the adjustment. That won't happen this year, despite the fact that some costs, such as workers' compensation insurance, are shooting up.

"They tell you it's not a cut," Chance said. "But if you're expecting a rate increase, it is a cut."

If lawmakers don't do much more trimming, she said, "we'll hobble through."

But some cuts being contemplated could push some providers out of business, or lead them to scale back salaries or benefits, she said.

One proposal would for the first time create statewide standards for the services provided to people with developmental disabilities. As it is, case coordinators at the state's 21 regional centers decide what services a client needs.

The move would save the state $96 million, but would lead to a 9.5 percent reduction in provider rates, said Bob Baldo, executive director of the Association of Regional Center Agencies.

At some point, such cuts trickle down through providers to the people who depend on the services.

Joan Hogan hopes that they won't reach as far as her 40-year-old son, Chris, who is mentally retarded.

With the help of a live-in assistant, Chris is able to live independently, taking a bus to a job in Woodland. On his own, Chris would give away his television if someone asked for it or invite a stranger to live in his house, Hogan said.

The assistant helps him manage day-to-day affairs -- seeking attention when he's sick, for instance. The assistant's share of the rent is paid for by the state, and she gets an hourly wage for the amount of time she spends helping Chris.

"If he lost his attendant, it would be awful for him," Hogan said. "It's just one of those things that government can and should do."

Similar situations can be found throughout state government. People who run and depend upon state programs are preparing for the cuts that will almost certainly come -- and hoping they won't go much deeper.

School officials know they will have to accept cuts to teacher training, textbook purchases and sports programs. But they're trying to draw the line at proposals to delay kindergarten for more than 100,000 5-year-olds and count some child-care spending as an education expense, leaving less money for school programs.

Schools have absorbed the biggest cut in recent history, said Kevin Gordon, executive director of the California Association of School Business Officials. Like many other advocates and most Democratic lawmakers, he calls for some tax increases to avoid more disruptive cuts to state operations.

But Republicans have consistently argued that there is more room to cut to avoid tax increases that would pose a hardship to a wide swath of Californians -- including many of the same people that Democrats say they want to protect.

"We're saying, 'Look, we haven't really done any significant reductions,' " said Assemblyman John Campbell, R-Irvine.

Assembly Republicans proposed a budget that would reduce spending by 4 percent, an amount they said hardly qualifies as harsh. It was voted down by the Assembly, including a handful of Republicans.

Campbell said Republicans have been the ones to compromise, accepting about $17 billion in borrowing -- a measure they find distasteful but are willing to accept as part of a budget solution.

"Reductions have to occur at some point," he said.

Last week, it looked like Republicans could get their way on the tax issue. The outlines of a deal took shape in the Senate that would include the vehicle license fee increase but reject other tax hikes. The two sides were reportedly negotiating how to make about $1 billion more in cuts.