HECTOR AMEZCUA / hamezcua@sacbee.com

Gov. Jerry Brown faces a showdown with fellow Democrats over what, if any, safety net programs to beef up.

With revenue rising, Democrats push to restore safety net cuts

Published: Monday, May. 6, 2013 - 12:00 am | Page 1A
Last Modified: Monday, May. 6, 2013 - 7:56 am

Gov. Jerry Brown and Democratic lawmakers are on a collision course over restoring cuts to California's safety net, marking a key test of vows to hold the line on state spending.

Brown is set to release a revised budget proposal this month, and state revenue is running about $4.5 billion over projections, lending momentum to efforts to boost programs for the poor or needy.

Legislation and ideas abound at the Capitol for bolstering the safety net, targeting adult dental care, mental health, welfare assistance, child care, college aid and affordable housing.

Senate President Pro Tem Darrell Steinberg touts restoring Medi-Cal dental benefits and boosting mental health programs as two personal priorities.

"There is no shame, in fact there's pride, in fighting to restore cuts to those who have suffered the most during the budget crisis – the poor, the elderly and the disabled," Steinberg said.

"But we can only restore programs if there is money," he added. "And we don't know whether or not there will be new money."

State finance department spokesman H.D. Palmer, representing the Brown administration, said the governor's basic tenet has been that past cuts must be retained to help pay down debt and ensure future budget stability.

The notion of a $4.5 billion windfall is illusory because much of it may not be available for more than one year and, besides, the vast majority of it must go to public schools and community colleges under Proposition 98, Palmer said.

"I can understand that a lot of people are looking at the current revenue numbers and jumping to the conclusion that that's money with no strings attached," Palmer said. "That's not the case."

Jason Sisney of the Legislative Analyst's Office said the $4.5 billion revenue bump may be a one-time occurrence due largely to actions taken by some wealthy Californians to shift 2013 earnings to late 2012 amid the threat of a federal tax hike. Almost all of that new money, perhaps 85 percent to 95 percent, can be spent only for education, he said.

Even before the revenue picture becomes clear, however, battle lines are forming over the safety net.

Democrats "love to fund, they hate to cut, and when they feel like they have money, they're going to spend it," said Senate GOP leader Bob Huff of Diamond Bar.

Witnesses at a Senate budget subcommittee hearing Thursday pressed for restoring Medi-Cal adult dental care, saying that budget cuts have led to a system that pulls teeth in an emergency but does little or nothing to fix cavities and perform root canals.

Sacramentan Darrell Lake, 36, said he had two teeth extracted that could easily have been saved by filling cavities.

Ariane Terlet, chief dental officer at La Clinica de la Raza, based in Oakland, said that failure to save teeth exacerbates unemployment. "If you don't have a front tooth, you're not hired," she said.

The Senate panel took no vote on restoration, but chairman Bill Monning, D-Carmel, said restoration is "high on our radar." A commitment by the state could qualify for significant federal funds as well.

Last month a broad coalition that included legislators and groups representing physicians, health plans, hospitals, dentists and the state's largest union of health-care workers, Service Employees International Union, vowed to fight a 10 percent rate cut to Medi-Cal providers that was approved in 2011 but delayed by court order.

More doctors would be willing to see Medi-Cal patients if the rate cut were overturned, thus expanding health-care availability to low-income residents, proponents say.

Numerous other ideas are being discussed at the Capitol, including boosting the welfare-to-work program by raising monthly cash grants or by committing to future cost-of-living increases.

"It's an issue that will continue to be on the table as the budget is negotiated," said Democratic Assemblywoman Holly Mitchell of Los Angeles, who chairs an Assembly budget subcommittee on health and human services.

Steinberg said he is developing a proposal to improve mental health services that were slashed by about $700 million per year during the budget crisis.

Assembly Bill 273 would expand child care for low- income families by using revenue from an existing tax on cigarettes and other tobacco products allocated by First 5 California, a children's advocacy group.

AB 1364 would assist low-income college students by quadrupling an annual stipend for books, supplies and living expenses. The current $1,473 would rise to $5,900.

State Sen. Ted Lieu, D-Torrance, is seeking restoration of more than 800 rehabilitation and vocational training positions in state prisons.

One key safety net issue recently was resolved by the Brown administration, subject to legislative approval.

Lawsuits challenging funding cuts to care for homebound disabled and elderly residents were settled in a way that removes the threat of double-digit reductions to In-Home Supportive Services.

Instead of a 20 percent cut that had been set for January 2012 but was suspended by court order, the settlement calls for a 4.4 percent reduction in service hours beginning July 1, adding to a 3.6 percent cut made in 2011. The state projects a savings of about $160 million in 2013-14.

Assembly Speaker John A. Pérez declined to comment on safety net issues pending release of a budget plan by his house next week.

With Democrats holding the Governor's Office and a supermajority of legislative seats, the safety net fight is sure to be watched closely by voters who were promised fiscal restraint in return for passing the Proposition 30 tax hike last year, said Rob Stutzman, a GOP strategist.

"It's a great opportunity for the governor to hold the line on restraining state spending," Stutzman said. "It's going to create an interesting tension for him with Democrats in the Legislature."

Assembly GOP leader Connie Conway, of Tulare, in a written statement, said she will evaluate proposals on a case-by-case basis but that "we're not out of the woods yet on the budget."

CALIFORNIA'S SAFETY NET

The state has cut billions of dollars from social pro- grams during the budget crisis, sparking a push by Democratic legislators and advocacy groups to restore at least some of the money. Among the services affected:

• Medi-Cal: A 10 percent rate cut to providers was approved in 2011 but suspended by court order. It is projected to save the state $573 million in 2013-14.

• Mental health: About $700 million in annual funding was cut from mental health programs, according to Senate President Pro Tem Darrell Steinberg.

• Dental care: Basic dental care for Medi-Cal adults was eliminated in 2009. Restoration would cost an estimated $166 million in state funds, plus matching federal funds.

• In-Home Supportive Services: An approved 20 percent cut was suspended by court order. A settlement proposes to drop the cut to 8 percent, which would reduce projected savings to about $160 million in 2013-14.

• Welfare grants: Maximum monthly grants for a family of three dropped from $723 to $638 during the budget crisis.

• College aid: Annual grants for low-income college students were cut from $1,551 to $1,473.

Sources: State Department of Finance, California Legislature, Health and Human Services Network of California

Call Jim Sanders, Bee Capitol Bureau, (916) 326-5538. Follow him on Twitter @jwsanders55.

© Copyright The Sacramento Bee. All rights reserved.

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