Public Health Services and the Governor’s Proposed 2015-16 Budget: State General Fund Support Remains Down, Other Funding Sources Are Up

February 26, 2015

In separate hearings next week, the Assembly and Senate budget subcommittees that focus on health services will take an initial look at the Governor’s 2015-16 proposals for the state’s Department of Public Health (DPH). DPH is responsible for a range of public health activities, such as controlling infectious diseases, improving health outcomes for pregnant women and children, and ensuring the safety of food, drugs, and medical devices. DPH also licenses, inspects, and responds to complaints regarding health care facilities in California.

Under the Governor’s 2015-16 proposal, state and federal funding for DPH ($2.66 billion) would nearly equal the inflation-adjusted spending level from 2007-08, the fiscal year during which the Great Recession began. (For purposes of comparison, our 2007-08 spending figure excludes bond funds spent through DPH as well as funding for the Drinking Water Program, which was transferred to the State Water Resources Control Board last year. In addition, DPH spending for both fiscal years excludes dollars that are provided as “reimbursements” from other departments.) However, while overall funding for DPH would be about the same as it was seven years ago, the mix of funds clearly has changed, as shown in the chart below.

2-27-15-Public-Health-Funding

DPH now relies more on federal funds and state special fund dollars than it did in 2007-08. The Governor’s proposal assumes the state will receive $1.8 billion in federal funding for public health activities in 2015-16, up from $1.6 billion in 2007-08, after adjusting for inflation. The Governor also proposes to spend about $780 million in state special fund dollars through the DPH budget in 2015-16, up from an inflation-adjusted level of nearly $650 million in 2007-08.

In contrast, DPH receives substantially less General Fund support than it did in 2007-08. That year, state policymakers provided approximately $410 million from the General Fund — after adjusting for inflation — for public health activities. As the recession worsened, policymakers cut General Fund support for DPH in order to help close large budget shortfalls. Those recession-era cuts largely remain in place under the Governor’s proposal, which would provide just $124 million from the General Fund to support public health services in 2015-16.

It’s not clear to what extent — if at all — DPH has been able to shift federal funds and/or state special fund dollars in order to mitigate the impact of General Fund cuts. What is clear, however, is that several state-level public health initiatives that were eliminated in the wake of the Great Recession have not been revived. This includes the California Children’s Dental Disease and Prevention Program, which ceased operating after it lost General Fund support — roughly $3 million — in 2009. This program provided school-based dental services, such as sealants and fluoride rinses, to more than 300,000 primarily low-income children each year. Yet, despite the demonstrated need to improve low-income children’s access to dental care, the Governor’s proposed budget fails to restore state General Fund support for school-based oral health prevention services in 2015-16.

For state lawmakers, the fate of this critical oral health program — and that of other public health services that were eliminated in recent years — shows the importance of examining not only what’s in the Governor’s proposed budget, but also what’s been left out.

— Scott Graves


Five Reasons to Register This Week for Policy Insights 2015

February 25, 2015

register now graphicThis week is the last chance to register in advance for Policy Insights 2015 on March 4th in Sacramento. Pre-registration ends this Friday, so don’t miss out on saving your spot at the premier conference for advocates, policymakers, researchers, and other leaders working to improve the lives of low- and middle-income Californians.

Why register for our annual conference? There are at least five good reasons:

1. Keynote by Ezra Klein. The editor-in-chief of Vox.com will discuss the intersection of data analysis, new media, and public policy, and what it means for California and the nation.

2. Perspectives on a Changing State. A luncheon plenary with State Senator Holly Mitchell, Zocalo Public Square’s Joe Mathews, and Manuel Pastor of USC’s Program for Environmental and Regional Equity will examine the opportunities and questions presented by a changing California.

3. Policy Prospects for Creating a More Equitable Future.
An afternoon plenary with recent legislative leaders John Perez and Darrell Steinberg and former state finance director Ana Matosantos will discuss how California can make policy choices that position the state for economic prosperity that is broadly shared.

4. A Variety of Workshop Sessions on Critical State Issues. Workshop sessions will examine state revenue options, strategies for addressing poverty in California, support for higher education, the federal policy landscape, sentencing reform, the state budget debate, current issues in K-12 education, and children’s health. (Read the full workshop descriptions.)

5. Birthday Cake. The California Budget Project is having its 20th anniversary this year. Come help us celebrate!

Be sure to sign-up by the advance registration deadline of this Friday so you don’t miss out. We look forward to seeing you on March 4th!

— Steven Bliss


The Other Third of California’s Budget

February 23, 2015

Most people are aware that we spend money on public programs to support various policy goals, but less well known is that we also “spend” a lot of tax money by not collecting it in the first place. Lawmakers and voters can do this by approving exceptions to the state’s (and the nation’s) basic tax structure through what are called “tax expenditures.” The Legislative Analyst’s Office (LAO) estimates that for state fiscal year 2014-15 California would have half again as much General Fund revenue — $55 billion more — if we had no tax expenditures. That’s a big sum of money, and you can bet that if it were program spending, people would scrutinize it with a magnifying glass.

So what do we get from forgoing all this revenue? Do these tax expenditures actually achieve their goals? The truth is, it’s hard to say for sure because we often simply don’t have good data and haven’t done a good job legislating rigorous evaluation and oversight. Tax expenditures vary broadly, ranging from the exemption of most food and candy sales from the sales tax, to the Mortgage Interest Deduction, to tax breaks for businesses, and more. Check out the LAO’s overview of the biggest tax expenditures in California, pros and cons of pushing policy goals through the tax code instead of public programs, and challenges in using them effectively.

— William Chen


Policy Insights 2015: Don’t Miss These Workshops on State Revenues, Higher Ed, Children’s Health, and More

February 18, 2015

register now graphicThere’s just a couple of days left to save on registration for Policy Insights 2015, our annual conference coming up on March 4th in Sacramento. In addition to celebrating the CBP’s 20th anniversary, we’re excited to have Ezra Klein, editor-in-chief of Vox.com, providing the keynote address on how timely, accessible analysis and commentary can shape and advance public policy.

Other plenary speakers will include State Senator Holly MitchellManuel Pastor of USC’s Program for Environmental and Regional Equity, Zocalo Public Square’s Joe Mathews, John A. Pérez, Darrell Steinberg, and former Department of Finance Director Ana J. Matosantos.

The conference will also feature a wide range of workshop sessions at which participants can discuss many of the critical issues facing our state. Some of these sessions include:

Revenue and Tax Policy: Weighing Options and Prospects for Reform

Speakers:

  • Tim Gage, Blue Sky Consulting Group
  • Lenny Goldberg, California Tax Reform Association
  • Jean Ross, Ford Foundation and former executive director, California Budget Project

State Support for California’s Public Universities: Looking Beyond the Current Debate, Reinvesting for the Long Term

Speakers:

  • Lande Ajose, California Competes: Higher Education for a Strong Economy
  • Debbie Cochrane, The Institute for College Access & Success
  • Hans P. Johnson, Public Policy Institute of California

Children’s Health Programs in California: Where We Are and What Comes Next

Speakers:

  • Kelly Hardy, Children Now
  • Jenny Kattlove, The Children’s Partnership
  • Edwin Park, Center on Budget and Policy Priorities

Visit the Policy Insights 2015 event page for a full list of workshops and other conference sessions and to reserve your spot at the premier conference for advocates, policymakers, researchers, and other leaders working to improve the lives of low- and middle-income Californians.

Earlybird registration has been extended through tomorrow, February 19, so register today.

— Steven Bliss


Conference Workshop on March 4th Will Explore Strategies for Reducing Poverty in California

February 12, 2015

Millions of Californians, many of them children, live in poverty today. By one measure California has the highest poverty rate in the nation. Public policies can address poverty, and the deep economic hardship in California calls for a sustained, multifaceted response from state leaders. What specifically should be done?

An afternoon workshop at Policy Insights 2015, the California Budget Project’s annual conference coming up on March 4th in Sacramento, will take a close look at policy strategies for addressing economic hardship in our state and their potential impact on low-income individuals and families. This session will feature the following panelists:

  • Speaker of the Assembly Toni G. Atkins
  • Senator Mark Leno, chair, Senate Budget and Fiscal Review Committee
  • Assemblymember Mark Stone, member, Assembly Committee on Human Services
  • Erica Williams, assistant director of state fiscal research, Center on Budget and Policy Priorities
  • Chris Hoene, executive director, California Budget Project (Moderator)

We hope you’ll join us for this and other sessions — including the keynote address from Ezra Klein, editor-in-chief of Vox.com — that will explore the most pressing issues and questions facing our state. You’ll also be helping the California Budget Project celebrate our 20th anniversary.

Early-bird registration ends February 19th, so register today to save 15% off the full registration.

Questions? Contact us at cbp@cbp.org or 916-444-0500. We look forward to seeing you on March 4th!

— Steven Bliss


Medi-Cal and the Governor’s Proposed 2015-16 Budget: The State’s Net Cost for Californians Who Enroll in Medi-Cal Due to Health Care Reform = $0

February 6, 2015

Anyone who’s ever bought a car knows the “sticker price” doesn’t tell the whole story. As it turns out, this same notion applies to the state’s costs for Medi-Cal, California’s Medicaid program and a key source of health care coverage for millions of low-income Californians.

As we noted last month, the Governor’s proposed budget highlights the state’s sticker price for providing services to low-income Californians who enroll in Medi-Cal due to the implementation of federal health care reform. State analysts project that California will spend a bit more than $2 billion over two fiscal years — 2014-15 and 2015-16, which begins July 1 — to support health care services for Californians who have signed up for Medi-Cal due to changes associated with the federal Patient Protection and Affordable Care Act (ACA).

There are a couple of ways to think about this $2 billion sticker price, both of which are highlighted in the following chart.

2-6-15 Medi-Cal and Federal Funds

First, the state’s two-year, $2 billion cost for ACA-related enrollment in Medi-Cal pales in comparison to the federal government’s contribution over the same two-year period: $32 billion. These federal dollars — which are just a portion of total federal funding for Medi-Cal — flow to doctors, clinics, and other health care providers in communities throughout the state, boosting local economies and supporting vital health care services for millions of low-income Californians.

Second, once you factor in offsetting savings, California will actually have no cost for new Medi-Cal enrollees and in fact will see a net cost reduction of about $200 million in 2014-15 and 2015-16 combined. Specifically, the roughly $2 billion in new state costs identified by the Administration will be reduced by more than $2.2 billion as a result of two policy changes that lawmakers and Governor Brown adopted in 2013. (Previously, we couldn’t calculate this total savings amount because some of the data weren’t yet available.)

This net decrease in state costs — despite rising Medi-Cal enrollment under the ACA — is due to two factors:

  • A shift — back to the state — of certain dollars previously provided to counties for indigent health care, resulting in projected General Fund savings of $1.4 billion over two years.
  • The use of some proceeds from a tax on Medi-Cal managed care plans to offset state spending, resulting in ACA-related General Fund savings of more than $800 million over two years.

In short, these two policies — which are described in more detail in our previous blog post — result in state savings that exceed California’s cost for Medi-Cal enrollees who have signed up due to health care reform.

So, the next time you hear that health care reform has dramatically driven up state spending for Medi-Cal, follow the same rules that apply on the used-car lot: ignore the sticker price and focus instead on the actual rock-bottom cost.

— Scott Graves


Ezra Klein to Keynote Our Annual Conference on March 4th

February 5, 2015

We are pleased to announce that Ezra Klein, one of the foremost thinkers on the intersection of media, data-driven analysis, and public policy, will be the keynote speaker at Policy Insights 2015 on March 4th in SacramentoEzra Klein.

Klein is founding editor-in-chief of Vox.com, a columnist with Bloomberg News, and policy analyst/contributor at MSNBC. He previously oversaw the Washington Post‘s Wonkblog and was associate editor at The American Prospect.

In his morning keynote, Klein will explore California’s role in national policy debates and will discuss what the changing media environment means for how timely, accessible analysis and commentary can shape the discussion.

Don’t miss this opportunity to hear from this leading and always thought-provoking observer of the political scene — and also to join the CBP in celebrating our 20th anniversary! The early-bird discount ends on February 13th, so register today.

Questions? Contact us at cbp@cbp.org or 916-444-0500.

— Steven Bliss