HECTOR AMEZCUA / hamezcua@sacbee.com

Gov. Jerry Brown, with wife Anne Gust Brown and their dog, Sutter, watching, acts on bills Friday.

Jerry Brown vetoes changes to triggered budget cuts, signs health industry fees

Published: Saturday, Sep. 17, 2011 - 12:00 am | Page 4A
Last Modified: Wednesday, Jun. 12, 2013 - 4:46 pm

Saying his actions will help maintain the state's balanced budget, Gov. Jerry Brown vetoed a bill to give lawmakers more leverage in making emergency budget cuts and signed two bills extending revenue-producing charges on the health care industry.

Approved were Senate Bill 335, to extend a fee on private acute-care hospitals for 30 months, and Assembly Bill X1 21, to extend a tax on Medi-Cal managed care plans.

Rejected was Senate Bill X1 6, which would have altered the mechanism for automatic budget cuts if state revenue falls below projections this year.

"This year – for the first time in a long time – we passed a no-gimmicks, on-time budget," Brown said in his veto message. "Why would we undermine the plan that has earned widespread respect and helped stabilize California's finances?"

By creating uncertainty about budget cuts, the bill could have affected the state's ability to sell bonds, Brown noted. The measure would not have eliminated or altered any programs now on the chopping block if emergency cuts are needed, but it would have required legislative leaders to be consulted about possible alternatives.

Under current law, cuts of up to $2.5 billion would be made to K-12 schools, higher education, public safety and social services if state revenue fails to meet projections.

The two revenue-producing measures that Brown signed each passed the Legislature by a two-thirds margin.

Extending the tax on Medi-Cal managed care plans – 2.35 percent of gross premiums – is meant to help bankroll the state's Healthy Families Program, which provides health, dental and vision coverage to low-income children and youths. Supporters say the measure will benefit 300,000 young people.

Brown pegged the bill's bottom line at $200 million in new revenue, which will generate an additional $300 million in federal funds and save California's general fund $103 million this year.

The second revenue-raising measure, SB 335, will provide additional funds to hospitals and support health care services for children, low-income patients and Medi-Cal recipients who are senior citizens or have disabilities.

The 30-month fee extension will raise $7 billion in revenue, generating an additional $6.1 billion in federal funds and saving the state's general fund more than $850 million, Brown said.

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