CMA Capitol Insight: June 23, 2014

June 20, 2014
Area(s) of Interest: Advocacy 

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

More on the Budget

The fight over the California state budget used to be the main event in the political year. Although Democrats have long been dominant in the Legislature, the budget process required them to engage with Republicans, whose support was needed to garner the two-thirds majority to pass a state spending plan.

That’s all changed in the four years since voters passed Proposition 25 in 2010, allowing a budget to be passed with a simple majority. That change, coupled with Democratic domination in the Legislature and Democrat Jerry Brown in the governor’s office, has turned the budget into a largely pedestrian affair – at least as far as politics is concerned.

While it lacks the political fireworks of years past, the budget is still the cornerstone for state government – an outline of the state’s political and spending priorities.

Earlier this month, lawmakers passed a $154 billion budget that allocated more than $254 million to pay for preschool for toddlers from needy families and set aside $250 million to develop California’s embattled high-speed rail program – a favorite project of the governor’s.

Notably absent from the budget was any effort to restore payments for Medi-Cal providers. Provider rates were cut by 10 percent during the lean budget times after the Great Recession. Now, as the state enjoys its second consecutive budget surplus, Gov. Brown has been unwilling to restore those cuts, even as other programs see their funding restored and the state embarks on bold new spending initiatives.

The decision to keep the cuts in place increases pressure on the Medi-Cal system, which now more than ever is the linchpin to the state’s health care system. By the end of this budget year, an estimated 11 million Californians will be enrolled in Medi-Cal – roughly 30 percent of our state’s population.

Even as more and more people become dependent on Medi-Cal, more and more doctors and other providers are opting out of seeing new Medi-Cal patients because of the lowest reimbursement rates in the nation. As Medi-Cal continues to grow, and the state continues to recover, the pressures to do something about provider rate reimbursements will only grow.

We can be sure the fight to restore rates will continue, despite not being included in the 2014-15 budget.

The budget was the last for Senate President Darrell Steinberg after six years in the pro-tem chair. Steinberg, who is being forced from office by term limits, will be replaced by Los Angeles Democrat Kevin de León in October. De León’s ascension to the top spot will mean both houses are controlled by Southern Californians. Toni Atkins from San Diego is the Assembly speaker.

Water Bond Issues

Regional issues do rear their head in the Capitol from time to time, and no issue divided lawmakers on geographical lines more than water.

With the budget now behind them, lawmakers will spend much of the rest of the legislative session (which ends on August 31) focused on trying to come to terms on a water bond for the November ballot.

There is already a bond proposal scheduled on the November ballot – an artifact from a 2009 deal hatched in the Legislature. That deal has been criticized as too big – $13 billion – and too loaded with pork projects to be politically viable.

While there is wide agreement among lawmakers that a bond proposal should be reworked, there is no agreement yet on what a new proposal should look like. And, Gov. Brown has been seemingly lukewarm to the entire idea of any new bond on the November ballot.

Brown has made fiscal austerity a central plank of his new political persona, and will be championing a budget rainy-day fund on the November ballot. He has demanded that lawmakers cut spending on key programs to bring the state’s books into balance. Asking for billions in new borrowing doesn’t fit the narrative Brown wants going into a reelection bid this fall.

On the flip side, the drought has brought the state’s water issues into sharper focus. An overwhelming majority of Californians see the drought and long-term reliability of the state’s water supply as an important issue. Politically, this may be the perfect time to ask voters to invest in the state’s water future.

It’s a political equation that Brown will have to answer in the coming weeks.


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