CA Republicans + CA Democrats = Medi Cal Deadlock

Where Medi-Cal adult optometric and optical benefits are concerned, it's been a bad news/good news week.

On Monday, both the Assembly and Senate Republican Caucuses released a summary budget deficit reduction plan that included selective elimination of Medi-Cal "optional" services - "including optometry and psychology." Though we haven't seen specific legislative language, our advocates tell us that "optional" adult dental services - which account for over 90% of optional benefit expenditures - were spared. You can view the GOP plan summary here.

This afternoon, both the Assembly and Senate passed by majority vote a package of bills that, if signed by Gov. Schwarzenegger, will reduce the current-year/outyear budget deficit (currently estimated at over $40 billion, and growing as revenues decline) by $18 billion. A summary of the deficit-reduction package, sponsored by the Legislature's Democratic Caucuses, is attached. Based on what we've learned, this proposal spares Medi-Cal optional services from any additional reductions or elimination. Its fate is uncertain at this moment since the Governor has not taken a position on the package, as passed. All bills must be enacted for the majority-vote strategy to succeed, according to an opinion of the state's Legislative Counsel holding that provisions of Article XIII of the California Constitution added by 1978's Prop. 13 require "revenue neutrality." Several "pro-taxpayer" groups have stated that they will file suit to overturn the package if it is enacted. After taking action, both houses adjourned the emergency budget session declared by Governor Schwarzenegger on November 5.

The lesson here is that we can never relax in our resolve to protect Medi-Cal optometric and optical services from elimination, especially in these post-term-limits and weak economic times. Please click here to tailor and fax a letter to your Assemblymember and Senator renewing your opposition to cutting or eliminating these essential services; this is especially important if either or both of them are freshmen or Republicans. Better yet, please also starting making plans now to visit with them in their District offices next month to educate them personally about their value. Should you need any assistance with that, send a request to Julie Andrade, COA's External Affairs Coordinator, at jandrade@coavision.org.

Please accept my personal wishes for a happy holiday season for you and those dear to you.

Sincerely,

David Redman, O.D.
COA President

SUMMARY – MAJORITY-VOTE DEFICIT REDUCTION PROPOSAL
As Passed by Assembly and Senate December 18, 2008

REVENUES
· Eliminates gasoline sales and excise taxes used for transportation purposes and replaces those taxes with a mix of taxes (sales, oil severance and personal income surcharge) that will be used to bolster the General Fund. Estimated additional revenue: $5.7 billion General Fund.
· Institutes a “user fee” of 39 cents for gasoline consumption. The new fee would increase the amount of funds for the state highway account by $500 million annually and for local streets and roads by $643 million annually. The fee will be indexed to adjust for inflation. Because it is a user fee, the revenues must be used for transportation purposes.
· Reworks the “triple flip” enacted in 2004. The “triple flip” increased the state sales tax by a quarter cent, reduced local sales tax by a quarter cent, and shifted property taxes from schools to local governments to make up for loss in local sales tax money. The state General Fund backfilled schools for the loss of property tax money.
· Ends the local quarter cent local sales tax reduction, eliminating the need to shift property tax from schools to local governments, thereby ending the general fund obligation to backfill school funding. Estimated additional revenue: $1.5 billion General Fund.
· Establishes new 3 percent income tax withholding requirements for independent contractors. Requires businesses to withhold 3 percent of payments to independent contractors exceeding $600 annually, relieving businesses from having to file 1099 forms. Estimated additional revenue: $2 billion General Fund for 2009-10 budget year.
EXPENDITURES
Education:
· Reduces Proposition 98 spending in the current budget year by $2.5 billion level as proposed by the Governor. (Majority reductions do not follow the Governor's proposal to cut school district revenue limits, but instead targets specific programs that mitigate direct impacts on classroom instruction.)
· Adopts a variation of the Legislative Analyst's proposal to count a portion of current year spending as "settle-up" dollars rather than Proposition 98 dollars. Does not reduce current year education spending, but does provide additional Proposition 98 flexibility in the current budget year.
· Adopts the Governor's proposal to cut $132 million from the University of California and the California State University systems.
Health and Human Services:
· Proposes no new cuts or suspension of Medi-Cal optional services for the current or 2009-10 budget over current law – 10% through February 29, 2008 (possibly suspended by ILC v. Shewry injunction) and 1% thereafter.
· Reduces SSI/SSP grants in 2009 to the 2008 level and suspends the budget year state Cost of Living Allowance (COLA). Estimated savings: $177 million in the current year and $500 million in 2009-10 budget year. (State's neediest elderly and disabled individuals will lose more than $700 per year – couples more than $1,300).
· Suspends the budget year CalWORKS COLA to save about $100 million.
· Reduces, by three percent, certain payments for services delivered to individuals with developmental disabilities for the period from December 1, 2008 to June 30, 2010, as proposed by the Governor. Estimated savings: $26 million General Fund for 2008-09 and $60 million in 2009-10.
· Reduces the Regional Center Operations’ budget by $3 million General Fund in 2008-09 and $12.2 million in 2009-10 by suspending certain case management ratios and administrative requirements.
Local Government:
· Approves the Governor's proposal to eliminate General Fund support for various local law enforcement programs. Estimated savings: $189 million in the current year and $500 million in 2009-10 budget year. Reallocates Vehicle License Fee revenues - $92 million current year and $359 million 2009-10 budget year – to support these local programs.
· Approves the Governor's proposal to eliminate the $34.7 million Williamson Act backfill to counties. This does not, however, make any changes to the underlying program to preserve agricultural land.
· Transportation:

Reduces annual funding for State Transit Assistance (STA) program. Estimated savings: $156 million. The Governor had proposed to eliminate the program entirely.
· Shifts eligible Motor Vehicle Account funds and Tribal Compact revenues to the General Fund. Estimated savings: $185 million.
Other Actions:
· Achieves $91 million in solutions from the Judicial Branch with a Reduces the 2008-09 COLA for state trial courts and authorizes a one-time transfer from the Trial Court Improvement Fund to the General Fund. Estimated revenues: $91 million General Fund.
· Eliminates funding for the gang initiative and various other programs. Estimated savings: $30 million.
· Reduces funding for employee compensation with actual savings to be negotiated through the collective bargaining process. Estimated savings: $240 million in the current year and $417 million in 2009-10 budget year.
ECONOMIC STIMULUS
Accelerates the availability of approximately $3 billion in public works infrastructure bond funds for “ready-to-go” infrastructure projects – streets and roads, public transit, housing sites, parks, levees, water quality, and “green” projects. Estimated economic impact: 45,000 high-wage private sector jobs.