Highlights of Governor’s 2006-2007 Budget Release

DATE: January 11, 2006
TO: Delegate Agencies, Board of Directors, Advocates and Staff
FROM: Jennifer Sigafoos, Director of Public Policy
RE: Highlights of Governor’s 2006-2007 Budget Release

Governor Schwarzenegger released his 2006-2007 budget yesterday. The good news is that California continues   to see revenue growth, though the state is still facing an operating deficit of over $4 million. General Fund revenues have increased $5.5 billion for 2005 and 2006 combined. For 2006-2007 revenues are expected to grow by $4.3 billion, a 4.9 percent increase year-over-year. This surge in revenues has allowed the Governor to put forward a number of new initiatives. ollowing are some highlights in the area of Health and Human Services:

Medi-Cal and Healthy Families

• $72.2 million ($34.2 million General Fund) to develop a more comprehensive strategy to identify, educate, and enroll   children eligible for public health programs (Medi-Cal and Healthy Families). Highlights:
  • Up to $20 million in grants to counties for outreach and enrollment activities;
  • Make the electronic application (Health-e-App) widely available and encourage application assistants and others   to enroll children using this technology;
  • Provide incentive payments to encourage Certified Application Assistants (CAAs) to enroll more children in   Medi-Cal and Healthy Families; and
  • $1.4 million General Fund to initiate a public education campaign to promote awareness of Medi-Cal and Healthy Families.
• $22.7 million General Fund to simplify the Medi-Cal re-determination form to decrease turnover and increase program retention.
• The Administration continues to propose increasing enrollment of senior and persons with disabilities into Medi-Cal Managed Care.  $2 million is included in this budget for DHS to phase   in expanded enrollment of this population.
• Expenditures for the Access for Infants and Mothers (AIM) program are expected to decrease by $2.9 million. The decrease in funding is primarily the result of the enrollment of infants born to AIM mothers directly into the Health Families Program.

Public Health

Proposition 99

• The budget proposes total expenditures of $355.2 million for all programs supported by Proposition 99 revenues. This represents an increase of $10.4 million over 05-06 expenditures. This includes a one-time funding increase of $1 million for the Rural Health Demonstration Projects to maintain program funding at the 05-06 level.

HIV/AIDS

• The budget includes $409.4 million   for the Office of AIDS Treatment and Prevention Program. This is an increase of $24 million to support the AIDS Drug Assistance Program (ADAP).

Prostate Cancer

• The budget includes $3.5 million General Fund on a one-time basis to continue the Prostate Cancer Treatment Program into the next fiscal year.

Licensing and Certification

• The budget proposes $64.1 million, a net increase of $18.9 million, for licensing and certification.  The budget also proposes the creation of a special fund for all licensing and Certification Program activities so that fees and expenditures related to the program can be better tracked. In addition, the budget provides an additional $19.6 million and 147.7 positions for DHS to better protect California’s citizens, improve access to necessary services, and meet current statutory requirements.

These are just some of the highlights in the Governor’s budget proposal and CFHC will continue to keep you updated on issues of interest to clinics as things progress in the budget process.

One issue that is not highlighted, but is of great concern to providers, is the 5% provider rate cut that just went into effect January 1, 2006. This cut was contained in a previous budget (03-04) and runs through this budget year. The cut had not been initiated previously as the issue was tied up in litigation, but as of the end of 2005 litigation had been exhausted, paving the way for the cut to go into place. Advocates, including CFHC, are currently working on urgency legislation to remove this cut and we will keep you posted as the issue progresses.