What the state's budget limbo means

John Taylor: July 25, 20070 Comments

It's such an annual ritual that it's almost ho-hum, except it's not. California is now 25 days into its fiscal year without a state budget. Imagine skipping your mortgage payment for 25 days -- with no seeming accountability. Imagine the electeds, waiting for proposals, conjuring up compromises while also drawing down about $113,000 in annual salary, plus $162 per-diem, tax-free pay.

But this isn't a rag about partisan bickering within California's Assembly and Senate, or whether the state government as currently framed can functionally serve this state within a state within a state.

This is about our annual limbo, and its impact. The California Department of Health Care Services has just alerted hospitals and other institutional providers that, if the budget doesn't pass this week, the state will stop writing checks for Medi-Cal reimbursements, effective August 2.  The state will have exhausted its $2 billion contingency funds.

That doesn't mean Medi-Cal clients won't get treated. It means hospitals, like Fresno-base Community Medical Centers, and certain others who provide care won't have their claims processed and won't receive potentially millions in repayments until some time after a budget is realized. Some of the others affected include the Healthy Families program, the Child Health and Disability Prevention Program -- a list is available at www.medi-cal.ca.gov

Of course, county/school/college/university budgets must react to what the state does. And those groups have largely honored their legal responsibility and already adopted their budgets, knowing that the approved services and jobs may be cut depending on what the state comes up with.

This is way more than a money-flow issue of cash-strapped hospitals and governments getting paid later than usual (many state agencies, especially those involved in the complexities of health care, have been understaffed/under-skilled for some time --- so "late" is normal). It's more than, "will the new budget close the Fresno Medi-Cal office?"

It's a California symptom of nationwide health-care meltdown. And, with all the talk of sweeping reform and coverage for all, it would be nice if we first cured this basic political flaw. This perennial rainy-day, contingency planning hinged around July 1 makes trend-setter California -- which has the world's 8th largest economy -- look like a backwater.