Single-payer healthcare reform has a new bill number and a new sponsor.  With my former State Senator Sheila Kuehl termed out, Mark Leno has stepped up to carry SB810, which in the past was known as SB840.  The bill would, in the words of the press release, “guarantee comprehensive health care benefits to every California resident and streamline claims and reimbursements, which will save billions of dollars in health care administrative costs.”  Here’s Sen. Leno:

“As a nation, we spend twice as much per person on health care as other wealthy countries, with the hope that our families will be protected from illnesses, yet most insured Americans still worry about how they will afford critical care if they become sick,” said Senator Leno. “In California, 7 million people do not have health insurance. Wasteful health care spending is crushing our economy and forcing families to forego basic medical care. With the money we spend today on health care, California can have a modern, universal health care system that provides high quality care for everyone,” he said.

A version of this bill has basically already passed the California Legislature, only to be vetoed by the Governor.  So it shouldn’t be a surprise that 43 lawmakers, including both leaders in the Assembly and Senate, have already signed on as co-sponsors.

Given the conservative veto and the 2/3 rule for revenue, SB810 lacks a funding source, so even if it were signed at some point – and realistically, Governor Schwarzenegger won’t be the one to sign it – supporters wold have to go to the ballot to raise the necessary revenue to fund the bill.  

There is no question that our health care delivery system is grossly inefficient, and insurance company profit and overhead is a pool of money that does little to provide quality care.  As a nation we spend an extreme amount on health care – $2.4 trillion dollars in 2008, closing in on 20% of GDP – without a proportional increase in health care outcomes over the rest of the industrialized world.  In fact, we pay more for care while ranking below dozens of nations in quality.  Single-payer care, while varied in different nations across the world, has generally been proven to offer the best quality at the most reduced cost.

But of course, that is on a national level.  And even though with 38 million people we have as many citizens as several other nations which have implemented single-payer, universal health care, what we lack is a printing press to coin our own money.  Given the constraints of a balanced budget, given the far more onerous constraints of the conservative veto, and given that states have little control over the boom and bust cycles of the national economy, universal health plans have largely come ashore and beached when they are done at the state level.  There are certainly reforms that can take place here, but we need the structural reform to set the table for them, and even with that, I am highly dubious (though willing to be convinced) that any state can manage UHC on their own without the tool of deficit spending that would occasionally be needed.  And history bears this out.

Orange County’s Board of Supervisors may have crossed the line with this one.

The Orange County Board of Supervisors voted unanimously today to suspend a county contract with Planned Parenthood to provide health education for thousands of teens and preteens because the nonprofit organization offers abortions.

“I personally have a problem with government funding of an organization that provides abortion services,” said Supervisor John Moorlach, who placed the item on the agenda.

As it says in the opening graf, Planned Parenthood in Orange County does not provide abortion services.  It provides health education for teenagers, including information on contraception and birth control.  All this does is make kids in the area more susceptible to STDs.  This is religious extremism that actually puts people at risk.

But alas, this is Orange County, some say.  If they are so wedded to an extremist anti-choice ideology, then so be it.  Except that’s more true of the political class than the people who live there.

Despite testimony that the Planned Parenthood services under contract through the community health clincs is not funding abortions, and has been extensively audited, the Board of Supervisors voted to defund a contract that includes Planned Parenthood as one of 18 community clinics receiving funding under Propostion H […]

Recent polling has shown that anti-choice activists in Orange County are now outnumbered over two to one by those who believe that abortion should be available without any restrictions, or with minor restrictions. (emphasis mine)

Two things jump out here.  Planned Parenthood was receiving the funding via a voter-approved initiative.  And then there’s the part I bolded, that Orange County is strongly in favor of abortion rights.  This is nothing new, by the way.  The county has long been more socially liberal and economically conservative.  Here’s an article from June 2000 highlighting a survey showing the OC’s tilt toward choice:

The county’s libertarian bent also was evident on the subject of abortion. Sixty-five percent of those polled support abortion rights.

It seems to me that this vote could be a launching pad.  The culture wars have played themselves out nationally, particularly in light of the economic crisis.  South Dakota, one of the most conservative states in the country, couldn’t pass an abortion ban in 2006 or 2008.  The public supports abortion rights and even more strongly supports birth control and family planning (try 91%).  This punitive measure by the OC Supes could be a rallying cry, starting a movement tailored to the libertarian thinking of the area, demanding that these lawmakers get their prying eyes out of their constituents’ bedrooms.  This is the kind of misstep that loses people elections.  We’ll see if anyone capitalizes.

Mac Taylor at the Legislative Analyst’s Office (LAO) has made his preliminary assessment of the impact of the federal stimulus on California’s bottom line.  This is important, recall, because if the state can get over $10 billion in such a way that reduces the budget deficit, they would hit a “trigger” that would allow the state to eliminate $1.8 billion in tax increases and restore about $1 billion in really painful cuts to social services, particularly health care for the needy.

Taylor doesn’t think we can get there:

A significant portion of the $31 billion in aid to California will be available to address the state’s budgetary problems. We estimate that, based on the enacted state 2009-10 budget, California can use $10.4 billion in new federal dollars for this purpose over the life of ARRA. Of that amount, $8 billion would be available in 2008-09 and 2009-10. The Director of Finance and State Treasurer will determine their own estimate of the latter amount by April 1 of this year. If the amount is less than $10 billion, then annual state program reductions of nearly $1 billion and revenue increases of about $1.8 billion adopted as part of the 2009-10 budget package will go into effect.

Given the state’s continuing economic struggles, however, it is possible that state revenues (and the Proposition 98 minimum funding level) may continue to fall. In that case, it may be possible to use additional federal education dollars for budgetary relief.

This is an analysis of things as they stand right now, with no further changes from the legislature to qualify the state for more funding.  It is not the final version of things, as Taylor notes, because the legislature could act quickly on a number of fronts to put the state over that $10 billion dollar line.  And the Budget Act provision is written so sloppily that it’s hard to even know what money would be eligible under it.

The Legislature will need to take many actions in the coming months to ensure that the funds are used in ways that meet its priorities and preferences. To assist in this process, we offer the following considerations in making decisions regarding these new federal funds:

• Maximize the Benefit of Federal Funds to the General Fund Budget. In this report, we make specific recommendations about how to help the state’s budgetary situation under different scenarios.

• Act Quickly in a Handful of Cases. In certain instances, the state will need to act rapidly to ensure it receives the maximum amount of relief or to use the funds in the most effective way possible. Addressing a Medi-Cal eligibility issue and providing direction on the use of transportation funds are two such examples.

The Medi-Cal eligibility issue ALONE would make over $11 billion in funding available to the state.  In addition, we know that revenues are going to come up short, which would allow up to $3 billion in education funding to be shifted to budget relief.  Taylor makes a number of recommendations that would allow the state to cross the trigger.

Nevertheless, the headline from the LA Times is “Stimulus Money Might Not Be Enough For California”.  That’s only true if the legislature does nothing.  And so these opening grafs are really kind of misleading.

Reporting from Sacramento — California appears likely to fall short of getting the federal stimulus money it needs to avoid the full tax hikes and spending cuts lawmakers approved last month to settle a contentious 100-day budget stalemate.

A fresh analysis of California’s flagging fiscal situation says the state needs about $2 billion more than Washington is providing. Lawmakers will be unlikely to reduce the personal income tax increase the new budget contains, or to restore some of the money they cut for universities, courts, social services and health care programs.

John Myers at Capitol Notes has a much more nuanced take, and he updated it with the LAO report today.  In the hearings today, Taylor didn’t sound assured of his own analysis.

But the LAO presentation, during this morning’s hearing of the Assembly Budget Committee, certainly didn’t sound definitive when it came to the $8 billion estimate. “This was our best kind of shot at it,” said Taylor […]

But when the question and answer session from legislators wrapped up, it was clear that a feisty debate is brewing as to whether to count more federal stimulus money towards deficit relief… thereby allowing some of the cuts and taxes to be set aside… or let the budget package stand as it is.

“I think taking for granted the $8 billion figure,” said Assemblymember Mike Feuer (D-LA), “is a big mistake.” Feuer went on to say that the Legislature should try to reach the magic $10 billion figure “any way we can,” thus maximizing federal matching dollars that state government has often left unused.

The California Budget Project’s analysis shows that there are plenty of ways to reach that $10 billion, through competitive grants and moving items to offset the budget, without costing the state very much at all and saving the worst budget cuts from being enacted.  There’s no reason not to get creative and do this.

Two other things.  The original trigger was set at $9 billion, until Abel “My Precious Tears” Maldonado wouldn’t sign off unless the gas tax increase was eliminated and lawmakers had to raise the trigger.  So if you want to blame someone for IHSS services being cut (or, if you prefer, raising your taxes), there’s your man.

Second, this will largely be resolved at a public meeting next week between Mike Genest, the finance director for the Governor, and state Treasurer Bill Lockyer.  And because the wording is so vague in the Budget Act, that meeting could erupt into chaos:

The actual bill says the two jointly have the responsibility of whether to “trigger off” those budget items. What if they disagree on the analysis? Ummm, well, no one really knows.

Well, at least it’s simple and elegant.

The enactment of Prop. 13 in 1978 prohibited commercial and residential property taxes from rising as property values rose.  Curiously (actually not so curiously), it did not prohibit them from falling should values fall.  And as property values crater year-over-year in the housing implosion, homeowners and businesses have the ability to reassess.  They have every right to do so under the law.  But this is going to bankrupt California cities.

Assessors in Los Angeles, Riverside and San Bernardino counties are forecasting the first drops in property tax collections in more than a decade, presaging reduced revenues for many cash-strapped local governments.

Until now, property tax revenues had been a relatively stable source of money for cities amid a recession that has dramatically reduced sales tax intake, particularly from car dealers.

Even with the decline in home values, the property tax base in five Southland counties grew last year thanks to continuing sales and the completion of construction begun during the 2003-2006 building boom. But assessors in those counties said they have reduced the value of more than half a million properties and expect to make deeper cuts to their rolls by the summer.

This is bad news for local governments that have been relying on property tax proceeds to help make up the shortfall from reduced incomes and spending in their areas. Already, cities and counties across California have been freezing jobs, imposing work furloughs and pay cuts, postponing repairs and reducing some public services.

The reason Prop. 13 is such a disaster is that property taxes are a stable revenue source no matter what the economic climate.  Unless a massive housing bubble bursts and prices collapse.  Just to show you how big this is, the county assessor in Los Angeles is predicting a 1% decline in the property tax base.  That comes out to ELEVEN BILLION DOLLARS.  The drop in San Bernardino County, one of the ground zero sites of the housing crisis, is predicted to be much greater, nearly 6%.  I can only imagine what the number is in the Central Valley, which lawmakers want declared an economic disaster area.

When you keep in mind that property taxes fund a great deal of municipal education, you can see what a major problem this is.  And without structural change, not one that’s fixable.

There’s a very pernicious habit in California of turning away from budget issues once a crisis is averted, in a show of relief that we will at least get a small reprieve from having to deal with the contentious battles for a period of time.  This false sense of security is bad enough in regular years, when the budget is cobbled together through borrowing against the future and no long-term solutions are implemented.  In this dynamic economic crisis, when rosy outlooks can darken in a matter of days, it’s downright foolhardy.

Greg Lucas at California’s Capitol has been one of the louder voices in insisting that the budget crisis is not at all over.  According to Controller John Chiang, revenue in February was $900 million dollars below estimates.  Now, if you extrapolate that out, we’ll be in a $10-$12 billion dollar budget hole by the end of the year just if things remain at the same level.  This is of course unlikely, as the February national job numbers showed.  So much of the tax increases passed in the February 19 budget solution are tied to employment – an increase in the income tax, and sales tax increases that of course rely on residents having purchasing power.  In addition, these lean economic times will push more people into needing state services, like unemployment and Medi-Cal.  Then there are the counter-cyclical increases and cuts that are working against what the economic recovery is attempting at the federal level.

In addition, many of the spending and taxation decisions made in the recent budget cancel out some of the benefits to California of the American Recovery and Reinvestment Act.

The federal package provides an estimated $13.1 billion in refundable income tax credits for middle to low-income Californians at the same time the state budget includes $12.2 billion in tax increases, only some of which are deductible. And only half of taxpayers deduct.

The federal bill includes a one-time $250 payment to the state’s aged, blind and disabled poor at the same time the state is reducing the maximum grant for an individual by $37 a month, $444 annually.

“California is roughly an eighth of the nation. The impact of this is sufficiently large that it could affect the prospects of recovery for the nation as a whole,” said Jean Ross, director of the California Budget Project, who has been examining how the state’s budget interacts with the federal stimulus package.

The biggest short-term issue is cash.  Lucas did an interview with John Chiang where he admitted that we will still need to borrow against the anticipation of future revenue as early as April, to the probable tune of $1.5 billion.  Because the budget deal was completed too late to include changes to the income tax code, those revenues will not come in until the following tax year.  The sales tax will go up April 1, but that will not be enough to cover expenses.

CC: Is February a big month for obligations?

JC: No. April is the real difficult month. If we don’t get that RAN, we’re $636 million in the red. But then the bigger issue is July. When we walk into the next fiscal year we will need a massive cash infusion.

CC: How come?

JC: We always borrow at the beginning of the year, 25 out of the last 26 anyway and then in April we make up the difference. But this year we walk in with weakness into the next fiscal year. There are less tools in the tool kit.  We’ll need a massive RAN or RAW (Revenue Anticipation Warrant).

Remember these last budgets borrow $16.5 billion from (state) special funds to backfill the general fund. So if we have any emergency in the state requiring aid from one of those special fund departments, the state is in trouble. Over 1,100 special funds in the state and we borrowed from over 650 of them. Part of this last budget solution gives us the ability to borrow another $2 billion more. The governor’s budget has us borrowing $11 billion from special funds over the next 18 months.

So we’re going to have to do some outside borrowing for the next fiscal year. Period.

And of course, there’s very little anticipation of the worsening economic picture in the budget, meaning that we’ll be in unquestionably worse shape by summer.  And the cash crisis, forcing short-term borrowing, really impacts selected projects that go out into the bond market, for example infrastructure like the high speed rail project, which will basically have to shut down if there isn’t a quick infusion of cash.  Keep in mind that California has the worst bond rating in the country and the credit markets are still not that friendly to the state.

Another pressing matter is the determination of how much money from the federal stimulus will be available to the state to fill budget holes.  There is a “trigger” in the state budget that would actually reduce some cuts – most of them the worst of the worst, particularly in health care for the needy – as well as reverse increases to the income tax, if at least $10 billion dollars in federal money hits the state budget.  It’s not just that money comes in, it’s that it has to go toward general fund relief in order to contribute to the trigger.  And Mike Genest, the Governor’s finance director, has a preliminary estimate up showing that the state will come up short.  This is insanity.  As the California Budget Project noted on a conference call today, there will be many billions above the trigger number available to the state, the legislature need only craft the receipt of that money in such a way to hit the trigger.  Otherwise, they are raising taxes and cutting services, and needlessly so.  One such bill would change Medi-Cal eligibility requirements to free up as much as $11.23 billion over 27 months.  That should happen ASAP.  Democrats are trying to write this as a special session bill and ensure that it requires only a majority vote.

The main point here is that we remain in crisis mode with the state budget, and will continue for years upon years until we stop putting off the fundamental, structural solutions the way we constantly do.  For example, the prison system remained virtually untouched during the budget crisis, despite being both crippling to the bottom line and unconstitutional in its overcrowding and inability to provide health care.  We desperately need structural changes with how the state budgets, and those will only be accomplished by demolishing the conservative veto over the process and repealing the 2/3 rule.

UPDATE: Here’s a link to the CBP study of the American Recovery and Reinvestment Act, identifying as much as $50 billion dollars available to the state in funding.  Surely the legislature can figure out how to capture 20% of that and set off the budget trigger.

Arnold Schwarzenegger got a lot of good press from going on ABC and saying that he would take the stimulus money of any GOP governor who refused a portion of it.

“Well, Governor Sanford says that he does not want to take the federal stimulus package money. And I’ll say to him, I’ll take it,” Schwarzenegger said. “I’m more than happy to take his money or any other governor in this country that doesn’t want to take this money. I’ll take it, because we in California need it. I think it’s a terrific package. I think if you ask a thousand people for their opinion, what is their ideal stimulus package, you will have a thousand different answers. So everyone’s is a little different. I think he’s done a great job and I think California benefits tremendously from that $80 billion of tax benefits there, for around $35 billion. There are other advantages: $45 billion of money that go to transportation, to education, to health care, all those different areas. There’s even some money that could benefit our revenues or, I should say, our budget itself….”

As you may know, what Sanford and Bobby Jindal and Haley Barbour and these Southern Republican Governors were objecting to is changing their unemployment eligibility statutes so they could accept millions in additional funding through the stimulus to give to the jobless.  It’s the best kind of stimulus there is and would probably keep some of the retail sector in business, but these Governors feel that once the federal money to fund the new eligibles ran out, it would be too burdensome on business to raise the funds.  So they have, rhetorically at least, sided with the corporate community in rejecting the funds.

Which is exactly what the Governor appears to be doing.

At a hearing of the Assembly Insurance Committee Wednesday, Republican Governor Arnold Schwarzenegger’s representative, Labor and Workforce Development Agency Undersecretary Steffanie Watkins, refused to support AB 3x 23, legislation that makes California eligible for $839 million in one-time federal unemployment insurance funds available at part of the President’s economic stimulus package.

This from the same Governor who just last week was all over the national media circuit criticizing Louisiana Gov. Bobby Jindal and other Republican Governors who were spurning economic stimulus funds.

What a difference a week makes.

In the end, the bill made it out of committee by an 8-2 vote with members of the Yacht Party crossing the aisle, suggesting that the legislature would have the 2/3 vote necessary to override Schwarzenegger, if it came to that.  But take note of the extreme hypocrisy here.  Mr. Governor-by-Magazine-Cover, the media darling, goes on national TV and wags his finger at fellow Republicans who won’t take stimulus money.  Then he signals that he won’t take stimulus money FOR THE EXACT SAME REASON as those governors he criticized.

Incredible.