CMA Capitol Insight: Pay Tuesday for a Hamburger Today

June 10, 2013
Area(s) of Interest: Advocacy 

CMA Capitol Insight is a biweekly column by veteran journalist Greg Lucas, reporting on the inner workings of the state Legislature.

Pay Tuesday for a Hamburger Today

This is a budgetary strategy used so routinely for so long in the state Capitol – and the nation’s – that under normal circumstances it would be shorthanded into acting or being “wimpy,” after its creator, Popeye’s pal, J. Wellington Wimpy. The word’s other unfortunate connotations prevent that from happening. California’s latest budget – all $145 billion of it – is wimpy at its core (or at least the legislative version is). Lawmakers will approve this wimpy budget on or shortly after the June 15 constitutional deadline for doing so because every day the budget is late, legislators aren’t paid. Gov. Jerry Brown could easily have gone wimpy in the revised budget he presented May 14. Revenues the state received in January were $4.5 billion higher than expected, and the economy continues to tick upward. The Democratic governor could have said predictions show California staying rosy, perhaps becoming even rosier, during the fiscal year that begins July 1. This allows restoration of some of the billions in reductions in health and human services program spending like dental care for adult indigents, which legislative Democrats restore in the spending plan they stitched together following Brown’s May proposal. But Brown chose not to go wimpy. He has seen corner office predecessors, including his former chief of staff, go a wimpy budget route and then have the economy implode, significantly worsening whatever hole the tanked economy would drive the state into. Instead, Brown said that this year’s balanced budget was fragile and that the state being back in the black shouldn’t be jeopardized by increasing its current spending commitments.

Looking Through the Other End of the Telescope

Democrats, who control the Assembly and the Senate, are ever so wimpy. The Legislative Analyst, who gives lawmakers budget advice, says Brown is lowballing the revenue the state will have during the next fiscal year by about $3.2 billion. Democratic lawmakers couldn’t agree more and premise their budget on this $3.2 billion materializing sometime between July 1 and June 30, 2014. But Democrats say that despite their optimism, their additional spending is relatively small. The Legislature’s budget spends only $400 million more than Brown’s May proposal, legislative leaders say. More than 25 percent of that $400 million – $131 million – is restoration of the adult dental program mentioned above. At first blush, this “restraint” seems odd. If going wimpy, being in for a quarter-pounder ought to mean in for a Whopper. Right? Lawmakers are being only semi-wimpy and, as result, score a public relations and political win. They use the more optimistic revenue estimates, which allows them to increase spending in some areas of importance to them and their constituencies. But funding formulas say that when the state receives a major spike in revenue, much of it must be sent to public schools to pay back previous years when they were shorted, such as the several billion over the last decade. In other words, a lot of the higher estimated revenue is spoken for. Whether Brown or lawmakers want to or not, most of the new revenue goes to schools. So while the Legislature uses the analyst’s bigger revenue number, it must send $1.7 billion of the total to schools, for which they credit themselves with being more generous to schools than the governor. This money – composed entirely of the non-existent but expected $3.2 billion – would be used to erase deferred payments the state has made to public schools over the past few years. The good news is that’s a one-time, rather than ongoing, expense that helps schools in the long run. In other words, lawmakers are crediting themselves with being very generous with money they don’t have. Not to worry, if the analyst’s $3.2 billion doesn’t materialize, neither does the generosity. Similarly, lawmakers place $360 million more in the state’s fund to hedge against unexpected expenses, bringing the fund up to nearly $1.5 billion. But guess what? No legislative analyst anticipated money, no bump for the rainy fund. No harm no foul. The amount of wimpiness might change, but burgers are going to be eaten now – even if there’s no money come Tuesday to pay for them.

Still Not There Yet

Last month, Covered California announced the 13 commercial health plans offering coverage through their shopping network. On a purely logistical basis, that’s a pretty impressive accomplishment so many months before the Affordable Care Act’s January 1 kickoff. Relative to the progress or lack thereof by other states, it’s even more impressive. However, some “issues of concern remain unresolved,” to use the time-honored political euphemism. For the better part of a year, the California Medical Association (CMA) has sought the end of a loophole that could leave contracting doctors holding the bag for care given to patients who don’t pay their insurance premium. The Affordable Care Act permits a three-month “grace period” for non-payment of premiums. A well-intentioned allowance, but insurers only have to pay claims through the first of those three months. A doctor can be left holding a pretty heavy bag depending on the level of care being given to a patient, CMA notes. In response, Covered California added a provision to the model contract the 13 health plans must follow, which improves the situation. A plan is now required to give 15-day advance notice to physicians when a patient begins the second month of the grace period. That’s helpful, but a doctor isn’t simply going to end care on day one of month two, so the warning merely alerts the doctor they’ll potentially be bearing the price of 60 days in unpaid claims. Needless to say, talks continue.

The Sleeping Giant Yawns & Stretches

Voting among California's Latinos increased over the last decade by more than the group's rate of population growth, but their voting participation rates still lag behind those of other major ethnic groups, a new University of California, Davis, study by the Center for Regional Change says. Between 2000 and 2011, the state's Latino population grew by 31 percent, representing nearly 90 percent of the state's growth during the period. Latinos become California's largest ethnic group this year. From the 2002 election to the 2010 election, the Latino vote grew 67 percent. But while Latinos comprise more than 26 percent of Californians eligible to vote, they constituted less than 20 percent of state voters in the 2012 elections. Last year, non-Latinos voted at a 57 percent rate; Latinos, 39 percent – five points lower than 2008, the previous presidential election year, which usually draws the highest turnout. By 2040, 45 percent of the state’s population will be Latino, up from 39 percent this year. That means Latinos could represent 38 percent of California voters, up from 20 percent today.

Sure, California Is Awesome, But Even So

More than 200 million people visited California last year. Direct vacation and business travel spending totaled $106 billion in vacation and business travel dollars, says a 2012 preliminary economic impact report of tourism on the Golden State by Dean Runyon Associates. This for-business and for-pleasure tourism supported nearly 1 million jobs and generated $11.4 billion in local, state and federal tax revenue. Elsewhere in the report, 15 million international travelers visited California last year, injecting about $20 billion into the state’s economy. There were some 62 million visitors from other states who spent more than $38 billion and, unless they drove on the 405 freeway in Los Angeles, spent much of the trip home wondering why they don’t live here. Proof that if anyone knows California’s majesty and magic it’s Californians, we spent $42 billion enjoying home field advantage.

Universal Application

“Whatever you do, do it well. Do it so well that when people see you do it they will want to come back and see you do it again and they will want to bring others and show them how well you do what you do.” If anyone can knowledgeably speak to this issue, it’s Walt Disney.


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