December 17, 2007

Perata wants LAO report on health legislation's impact on budget

As the Assembly continues to move toward passing health care legislation, Senate President Pro Tem Don Perata asked the legislative analyst today to study the impact of any health overhaul on the state’s general fund.

The move is yet another sign that Perata has no intent of taking up health legislation until early 2008 – and only then after determining its effect on the state’s dismal finances.

Perata issued a statement last week saying it would be “imprudent and impolitic” to expand health care without considering the budget deficit.

“The real issue now is the deficit and how this squares with everything else that we are going to do,” he said.

Perata spokeswoman Alicia Trost said nothing’s changed, despite the Assembly’s charge toward a floor vote this afternoon on health care (The Assembly Appropriations Committee passed the speaker’s health bill, AB 1X1, earlier today).

“Nothing has changed in Sen. Perata’s position to not bring his caucus before the end of the year,” said Trost.

Further, Perata’s letter suggests he doesn’t plan to rush to act on health care in January, either.

“The Governor is due to deliver his proposed budget on Jan. 10. I would also like to know how the Governor’s spending plan affects the health reform legislation’s underlying finances,” the Senate leader wrote to Liz Hill, the state’s nonpartisan legislative analyst.

If Hill is to include the governor’s newly proposed budget in her analysis, it wouldn’t be available until mid-January, at the earliest.

Lastly, Perata writes that Hill’s financial report “would be especially helpful when the Legislature reconvenes in January and Senate policy and fiscal committees begin conducting public hearings.”

Tack on at least another few days – if not a week – for that.

In the meantime, Assembly Speaker Fabian Núñez and Gov. Arnold Schwarzenegger have organized a giant press event for late this afternoon to tout progress in health care, featuring everyone from Andy Stern (national president of the Service Employees International Union) to Alan Autry (mayor of Fresno) to Ron Dellums (mayor of Oakland) to Steve Burd (CEO of Safeway).

The full text of Perata's letter is posted below:

December 17, 2007

Elizabeth Hill
Legislative Analyst
925 L Street, Suite 1000
Sacramento, CA 95814

Dear Ms. Hill:

I am writing to ask for your assistance in providing an independent fiscal analysis of the health reform proposal now under consideration by the Legislature. Your report would be especially helpful when the Legislature reconvenes in January and Senate policy and fiscal committees begin conducting public hearings.

Although I recognize that a thorough fiscal analysis of the package cannot be completed until all of the financing elements are resolved, I believe work to analyze the programmatic components can and should begin now. Much of the plan is now contained in AB 1 1x, which would be contingent on passage of an initiative measure to be placed on the November 2008 ballot. The level of the tobacco tax remains the most significant unresolved revenue issue; however, the proposed increase is likely to be between $1.50 and $2.00 per pack.

I have attached the most recent analysis from Dr. Jon Gruber. This reflects the latest version of the proposal, including the cost of the purchasing pool, tax credit and effects, employer and employee contributions, and level of federal match.

Specifically, I would like you to address the following questions:

• When the program is fully implemented, what are the expected revenues and costs? How would these factors change after the first five years?

• What are the risks, cost pressures and implications for the general fund?

In addition, the Governor is due to deliver his proposed budget on Jan. 10. I would also like to know how the Governor’s spending plan affects the health reform legislation’s underlying finances.

If you have any questions regarding this request, feel free to contact Diane Cummins or David Panush, my policy advisors on the budget and health care. Thank you for your attention to this matter.

Sincerely,
DON PERATA

Posted by Shane Goldmacher on December 17, 2007 2:44 PM