California's 71-day budget impasse is starting to hit home in painful ways.
Many hospitals and health clinics, as well as homes that care for the disabled and infirm, haven't received Medi-Cal payments for two months. Collectively, these health providers claim that the state owes them more than $4 billion.
Larger institutions are able to bridge this gap and maintain services for patients, but others are in serious trouble. Some clinic owners have maxed out their credit cards and can't take on more debt.
At a rally at the Capitol last week, Charles Guenther, chief executive officer of Eastern Plumas Health Care, accused lawmakers of "criminal negligence" for failing to act on a budget. He said his small hospital system is "six figures in the red," with employees digging into their own pockets to pay for utilities and lab supplies.
If the impasse drags on through September, Controller John Chiang says he'll be forced to withhold another $7.6 billion in payments to venders, school categorical programs, mental health services and others. This will add about $3 billion to the tab the state already owes Medi-Cal providers.
With no breakthrough in sight, some political leaders are suggesting that lawmakers pass a stopgap spending measure – adding to the state's debt – to ease the pain.
While the urge to enact a stopgap measure is understandable, doing so would simply remove pressure on lawmakers to make the choices their predecessors have made.
The better alternative is for affected vendors, hospital employees, schoolteachers and others to marshal some real pressure on the legislative leadership, particularly Assembly Republican Leader Mike Villines. To date, Villines has refused to even discuss a tax increase, which has poisoned any chance of negotiations. Both sides must be willing to put everything on the table. Otherwise, this impasse could drag out until Christmas.
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