State budget woes, health care expansion on lawmakers' agendas

By: STEVE LAWRENCE - Associated Press | Sunday, January 13, 2008 7:22 PM PST ∞

SACRAMENTO -- California lawmakers begin their annual state budget dance this week. This year, the tempo will be faster than usual.

Gov. Arnold Schwarzenegger releases his initial budget proposals early in January, as he did last week. But the Legislature usually doesn't begin serious budget negotiations until Schwarzenegger makes his revised spending proposals in mid-May.

This year, with the state facing a $14.5 billion deficit over the next 18 months, things are different.

An emergency declaration issued by Schwarzenegger requires lawmakers to begin work on how to erase $3.3 billion in red ink in the current budget.

Assemblyman John Laird, the Santa Cruz Democrat who chairs the Assembly Budget Committee, said legislators also need to begin talking about how to balance the budget that takes effect July 1.

"Normally, the key decisions are made in April, May and June," Laird said. "This year, it's such a big problem that we need to be looking at alternatives from minute one, and everything needs to be on the table.

"If we have tax credits that have been there for 30 years and no one has questioned them, it's time to look at them in addition to what the governor has asked us to do."

Schwarzenegger has proposed a combination of across-the-board cuts to schools, parks, prisons and other programs, more borrowing and some fee increases to deal with the deficit. He said he will oppose any tax increases.

The Legislature's budget analyst, Elizabeth Hill, will release her initial analysis of the governor's budget proposals on Monday, and the budget committees in both houses will hold hearings on Thursday.

Next week, subcommittees will begin poring over budget options.

Laird said he expects lawmakers to hold a series of hearings around the state to gauge public opinion about potential budget solutions.

"The people of California have been getting a level of service that's been higher than what they've been paying for for about five years," Laird said. "We either have to cut services or bring in some form of new revenues or a mix of the two, period. And that's a monumental question.

"I think it's appropriate that we start the conversation with the people of California and use the six months of the budget process to find out what they think."

Meanwhile, 29 other legislative committees have hearings scheduled this week to deal with legislation left over from 2007.

The Senate Health Committee has tentatively scheduled a hearing on Wednesday on the $14 billion health care expansion negotiated by Schwarzenegger and Assembly Speaker Fabian Nunez, D-Los Angeles.

But the chairwoman, Sen. Sheila Kuehl, D-Santa Monica, said she will postpone consideration of the bill for a week if Hill does not have time to complete an analysis of the measure's costs by Wednesday.

"The information from the legislative analyst's office is critical to our consideration because of the potential impact on other programs," Kuehl said.

The legislation would require employers to spend a certain percentage of their payrolls on health coverage for their workers, either by buying policies themselves or paying into a state health insurance pool.

Most Californians who couldn't obtain coverage through jobs or a government program would be required to buy insurance on their own.

The plan would be funded through employer contributions, fees on hospitals and an increase in cigarette taxes, in addition to premiums paid by consumers. Administration officials also are counting on getting additional federal funding to expand health care programs for the poor.

Supporters say the proposal would provide coverage for most of the 5.1 million Californians who lack health insurance and force insurers to take all customers instead of denying coverage because of pre-existing conditions.

But Kuehl and other critics say there are a number of problems with the bill, including lack of adequate insurance cost controls and no real minimum coverage requirements for employer-financed health insurance.

The committee also is scheduled to consider a series of Republican bills, including measures that would promote health care savings accounts and authorize tax breaks to encourage employers to offer coverage.

Here are some of the other bills on committee agendas this week:

DISASTER PREPAREDNESS -- A bill by Assemblyman Van Tran, R-Costa Mesa, would exempt first aid kits, water purification systems, emergency flares, two-way radios and other "disaster preparedness products" from the sales tax for three years, starting in 2009. It's on the Assembly Revenue and Taxation Committee's agenda on Monday.

SEX EDUCATION -- Assemblyman Bob Huff, R-Diamond Bar, has a bill that would require the state Department of Public Health to develop an abstinence education program. It's on the Assembly Health Committee's agenda on Tuesday.

RECYCLING -- Apartment owners would have to ensure their tenants had access to recycling services under legislation by Assemblyman Lloyd Levine, D-Sherman Oaks, that's on the Assembly Natural Resources Committee's agenda on Monday.

SAN QUENTIN -- A bill by Sen. Jeff Denham, R-Merced, would close 154-year-old San Quentin Prison and transfer its prisoners to other facilities. It's up for a vote Tuesday in the Senate Public Safety Committee.

On the Net: www.assembly.ca.gov and www.senate.ca.gov