As passed by the Legislature, the budget provides about $10.5 billion from the General Fund ($28.7 billion all funds) for local assistance provided under the Medi-Cal Program. This amounts to about a $40 million or less than 1 percent decrease in General Fund support for Medi-Cal local assistance.
Governor's Major Budget Reductions Rejected or Modified. The budget plan adopted by the Legislature rejected or significantly modified a number of the Governor's proposals for major reductions in Medi-Cal eligibility, provider rates, and optional services for beneficiaries. For example, proposals to scale back the past expansion of coverage for adults in working poor families and for the aged and disabled were not included in the final spending plan. A proposal to drop selected optional services for beneficiaries, such as acupuncture, was rejected, although dental and hearing aid benefits were reduced but not eliminated through various cost-containment actions.
I can't quite see the forest through the trees on this.
It appears to address Davis's proposed cuts in medi-cal which the legislature chose not to address. But I don't think Davis's proposed cuts were the full 10 billion- some of that $10 billion is earmarked for local gov't to deal with medi-cal, something they have to do but cannot, because they are broke. So it sounds like Davis wanted to cut at least some of this money but could not.
I believe this was at the heart of the Davis plan to avoid tripling of the car registration? Remember when he still thought he could stay in, he was against the tripling of car registration. He came up with a plan for cuts which was rejected by the legislature and voila, the triple car registration fee is back.
So herein lies the rub of California politics though. This is a sort of mini-example of it. Davis (and presumably you, and maybe me) would have liked to cut services but the legislature refused. Some of this is Davis and his ineptitude. But there is another side to it. Tax cuts are not participated in equally by the citizens of California. This is important and I don't think many quite get this. The young, people like me who are fairly new homeowners, new businesses and generally speaking anybody or anything "new" here pay through the nose for most all taxes. If I am going to pay so much to live here, I want services. You, on the other hand, have probably reaped a windfall from CA "tax revolt" laws which really were just a wealth redistribution scheme. So you are all for no taxes, because after all you are likely "house rich" anyway. This is the proverbial you I am talking about, I know nothing of your individual circumstance, but I have found that most that defend prop 13 are recipients of a windfall due to its passage.
The legislature has 2 masters, people like you and people like me and my employees. They don't only care about long time property owners and they may not necessarily vote in favor of no taxes all the time. Funny but reading posts on the real estate thread, somebody there thinks the legislature is like the evil fly-hand that was gene spliced onto the scientist from that movie "the fly"- where it was running amuck and adrift of all human motor skills. She maybe doesn't get that people like me who pay 40 times what she pays in taxes don't have the same objectives in policy as she might. Anyway I think the reason the legislature votes the way they do is because there are heavily taxed businesses and individuals out there who get nothing, nada from "tax revolt"- duh. So that is what happened with Davis's car tax proposal, the legislature figured their consituency was a little tired of tax revolt (aka "screw the young") so they abandoned it. You can always vote new legislature in, if you choose.
This issue of the car registration tax is interesting because it only brought a few billion in to the state. It was a huge tax increase but it did little to solve the crisis. We are still in deficit next year *even with* the car tax increase, and we have the high interest on the massive debt with the recent downgrade. No amount of "fees" and "wastecutting" can fix a problem of this size.
I saw Leon Paneta on capital report last night and he had a smirk on his face - "glad I didn't run". I think he knows default is likely. We'll have to see what the market is like for the 18 billion california bonds. The articles I read says the reaction is "tepid" at best. Phil Angelides said taxes must be raised last year in a quote on CBS news. Just where are they going to raise these taxes I wonder, with sales and income taxes where they are. 65 billion is too much money. |
