California stimulus funding not enough to stave off cuts to some health care services

Mar 31 2009

California Gov. Arnold Schwarzenegger (R) on Friday signed five bills into law that allow California to receive more than $17.5 billion in federal economic stimulus aid, but the funding will not be enough for the state to avoid $3 billion in tax increases and cuts to services to balance its budget, the San Francisco Chronicle reports.

The legislation changes eligibility reporting requirements for children enrolled in Medi-Cal and allows more people to qualify for unemployment insurance and extends the benefit by 20 weeks. Medi-Cal is the state's Medicaid program.

State Treasurer Bill Lockyer and Department of Finance Director Mike Genest on Friday said that the state will receive $8.2 billion in stimulus funding for the general fund (Yi, San Francisco Chronicle, 3/28). However, the state's recently enacted budget was contingent on receiving $10 billion for the general fund. As a result of the lower funding, the state will increase personal income tax rates by 0.25 percentage points and government services will be cut by an additional $948 million (Bailey, Los Angeles Times, 3/28).

The cuts will eliminate medical services such as dental care, eye exams, podiatry, chiropractic services and speech therapy. Medi-Cal reimbursements to public hospitals also will decrease by 10% (San Francisco Chronicle, 3/28).