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THE STATE | THE CALIFORNIA BUDGET

Cuts Will Be Both Deep and Broad

Davis' proposals for slashing the state's funding gap would take big bites out of welfare, education, transit and other programs. Hundreds of thousands of poor adults would lose health benefits

January 11, 2003|Jeffrey L. Rabin and Charles Ornstein | Times Staff Writers

From artificial limbs that Medi-Cal would no longer provide for the poor to road and transit improvements that Caltrans would not build for traffic-weary commuters, Californians will be getting less from their government as a result of the deep budget cuts proposed Friday by Gov. Gray Davis.

Hundreds of thousands of poor adults would lose health benefits, community college students would see the cost of attending class more than double, welfare checks would shrink and some state employees would have their pay and benefits cut.

The 3-inch-thick spending plan unveiled by the governor at a crowded Capitol news conference is filled with difficulties for people and programs, schools and colleges, cities and counties.

With California facing the worst budget crisis in a decade, Davis began his second term by proposing large spending cuts and increases in taxes and fees.

The governor said his proposed spending reductions would total $20.7 billion, or 60% of the budget gap he has projected for the next 18 months.

Though forcing about half a million adults off Medi-Cal, the giant state program that funds medical care for the poor, Davis spared the state's Healthy Families program, which provides health care for uninsured children. That program, one of the hallmarks of Davis' governorship, is one of the few that would grow.

Another place Davis didn't cut was the state prison system, which will receive $5.3 billion, near the current level.

The budget eliminates $1.6 billion in funding for highway and transit projects proposed by Davis in 2000 to relieve chronic traffic congestion in the state's crowded urban areas. Decisions on which projects would be delayed or scrapped are in the hands of state and local transportation officials, a Caltrans spokesman said.

Here is a look at the impact of Davis' proposals in various areas.

Health

Medi-Cal would serve fewer people, and those still in the program would get fewer services.

The cuts would reduce state spending on the program by $3.6 billion. The biggest losers would be adults enrolled in the program, as well as doctors and other health professionals who serve them.

This year Medi-Cal is serving 6.5 million poor people -- including 2.8 million adults -- and is projected to cost $29.2 billion, with the state spending $10.6 billion and the federal government paying the rest.

Many adults would no longer be eligible for Medi-Cal because they would no longer be considered poor enough. Those changes and new paperwork requirements are expected to push about 570,000 people out of the program.

Much of that decline would be offset, though, because the number of children enrolled in the program is expected to increase, and so is the overall number of poor people in the state. In the end, the net reduction in enrollment is expected to be 209,100.

For adults remaining in the program, the state no longer would pay for artificial limbs, optometry, hearing aids, physical therapy and hospice care, among other things.

Davis already had proposed eliminating coverage of dentistry, medical supplies and podiatry.

The benefit cuts would not apply to nursing home residents or children.

The reductions are expected to shrink overall Medi-Cal spending to $24.7 billion for 2003-04. The state's share would be $7 billion, according to the budget.

"We think that's pretty devastating," said Angela Gilliard, a legislative advocate for the Western Center on Law and Poverty in Sacramento. "It just seems like they're dismantling the Medi-Cal program for adults."

The California Medical Assn. held out the possibility of going to court to stop the cuts if they are approved by the Legislature. The governor's plan would slice reimbursements by 15%, which would save more than $1.4 billion annually.

"We simply won't have the resources to provide the kind of care that's needed," said Dr. Jack Lewin, chief executive officer of the medical association. "And many doctors will not be able to afford to stay in business."

Hospitals would be exempted from the cuts, as would certain rural and federally qualified health centers.

Welfare

Not since Republican Gov. Pete Wilson proposed welfare cuts in the early 1990s have recipients had to face the possibility of severe reductions in their monthly benefits.

Davis would trim payments to the needy by 6.2%, which would be deeper than the cuts approved by the Legislature under Wilson. That would mean a $42 drop in the maximum monthly benefit for a Los Angeles mother and two children who receive cash aid from CalWorks, the federal-state program designed to provide basic needs for poor kids and their families. Under Davis' plan, their total monthly benefits would fall from $679 to $637.

Welfare programs provide payments to more than 500,000 poverty-stricken families statewide and nearly 1 million poor people who are aged, blind and disabled.

For those who are aged, blind or disabled, average monthly payments would be cut by $49, dropping the benefits from $757 to $708.

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