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Office of the Chancellor / Public Affairs
Thursday, July 3, 2003
 

San Diego Union-Tribune 7-3-03

Editorial: Checks stop
Pain begins for those who deal with state

 

Now comes the pain.

The consequences of yet another blown budget deadline are beginning to reverberate throughout California.

California's community colleges will not be receiving their monthly checks from the state, which amounts to a $200 million hit in July alone. This will be especially painful for districts like San Diego, Grossmont-Cuyamaca and Southwestern, which for decades have been shafted by the state's unfair funding formula. If the state misses the September payment, cash-strapped districts, already in hock to keep operating, will have to borrow even more money to remain open.

California public schools will have to do without payments for categorical programs – such as special education programs for developmentally disabled students, and programs for gifted and talented students – and those mandated by the state.

Because state-funded health programs will receive just a portion of their monthly allowance, millions of Medi-Cal patients could be at risk. Union-Tribune staff writer Cheryl Clark underscored that point yesterday in "Medi-Cal 'death-spiral' feared." Clark noted that current reimbursement rates are so paltry that nearly half of California doctors don't accept Medi-Cal patients. One can only imagine how many more doctors will bail out of the program in light of still-lower rates. Meantime, some Medi-Cal providers are not being compensated for their services. Mind you, these are not elective services. We're talking about the poorest of patients seeking basic medical care.

The state also has stopped paying:

l Mental health programs not covered by Medi-Cal.

l Child-care provided through education programs.

l County social service programs not mandated by the federal government.

l Nonpayroll expenses for trial courts and public colleges and universities.

l More than 1,000 vendors who serve the state.

l Cal-Grant aid to college students.

l Gasoline taxes sent to local governments for street repairs.

And it's going to get worse should this budget stalemate drag on for several months.

By mid or late August, the state will run out of cash. And it cannot go begging to Wall Street again without having a credible spending plan in place. Most of the $11 billion that it borrowed last month went to pay the previous year's loans. What's more, California's credit rating, already the lowest of any state, could be downgraded further because the state cannot get its finances in order.

Unlike previous fiscal crises, California finds itself backed into a blind alley. There is simply nowhere left to run.

The reckless recall campaign against Gov. Gray Davis has compounded the dilemma by hardening political arteries on both sides of the aisle. California's increasingly desperate situation is beginning to resemble "The Perfect Storm," with a convergence of catastrophic circumstances about to capsize the Golden State.