The California budget reflects the “pandemic-induced reality,” says the governor

SACRAMENTO, Calif. – The coronavirus pandemic has doomed Governor Gavin Newsom’s ambitious plans over the past year to tackle homelessness, expand behavioral health services, and create a state agency to control the rising costs of health care.

But even as the pandemic rages on, the Democratic governor of California said Friday he plans to push those goals forward in the coming year as the budget’s outlook is brighter with higher tax revenues from wealthy Californians who have done relatively well during the crisis becomes.

Newsom’s $ 227.2 billion budget plan also prioritizes billions for the safe reopening of K-12 schools closed by the pandemic, $ 600 payments for nearly 4 million low-income Californians – in addition to the stimulus payments of the federal government – as well as grants for coronavirus relief and tax credits for badly affected small schools companies.

However, its spending plan for fiscal 2021-22 does not include additional public health funds for the local health departments that drive the pandemic response in California, which are chronically underfunded. He pledged to support cities and counties by increasing state testing and contact tracing capabilities, expediting vaccination efforts, and funding state surge hospitals admitting overflow patients.

Newsom said Friday that its budget reflected a “pandemic reality,” with investments aimed at fueling California’s economic recovery by helping businesses and people living in poverty. Wealth and income disparities, he added, “need to be addressed”.

However, Democrats in control of the state assembly, district leaders and social justice groups say this will be difficult to achieve because Newsom’s spending plan does not adequately fund health and social safety nets programs.

And with no extra public health money, local officials fear California cannot adequately control the spread of the virus.

“The county’s public health is drowning,” said Graham Knaus, executive director of the California State Association of Counties. “We’re in the process of switching between testing, contact tracing, and vaccination, and this is affecting the response to the pandemic.”

Newsom’s budget proposal is the first step in a month-long negotiation process with the democratically controlled legislature, which has until June 15 to approve the state budget that will come into force on July 1. Legislators have become increasingly frustrated with the governor’s response to the pandemic. including its unilateral spending decisions in response to the emergency. Newsom is also facing a growing recall, backed by heavyweight Republicans like former San Diego Mayor Kevin Faulconer, who is considering challenging Newsom in California’s 2022 gubernatorial election.

Newsom said it anticipates tough spending despite the state’s forecast of a budget surplus of $ 15 billion for the coming fiscal year, largely because a government financial analysis forecast deficits in subsequent years.

“While we enjoy the fruits of a lot of one-off energy and surplus, it is not permanent and we must be aware of an over-commitment,” explained Newsom, explaining why he did not include funding for Medicaid’s expansion to unauthorized immigrants.

Nonetheless, some lawmakers say they will urge Newsom to use higher-than-expected revenues – and possibly impose new taxes – to expand health coverage to more Californians.

The following healthcare proposals play an important role in Newsom’s budget proposal for 2021-22.

Covid relief

Newsom has allocated $ 4.4 billion on its budget to distribute vaccines, step up testing, contact tracing and other short-term pandemic costs. Since these expenses are related to the public health emergency, the state expects at least 75% to be reimbursed by the federal government and insurance payments.

He also proposed $ 52 million to help fund costs at state hospital hospitals, including support staff. And he’s asking lawmakers to sign a coverage package that will provide funding before the fiscal year begins in July. It would include $ 2 billion to help school districts reopen classrooms for face-to-face tuition starting February by paying for protective equipment, ventilation systems and adequate testing. It would also provide billions for economic recovery, such as stimulus payments for individuals, and grants and tax credits for weak businesses.

Newsom also plans to increase the budget for the Department of Labor Relations by $ 23 million to fund up to 113 additional labor inspectors for the California Department of Occupational Health and Safety to monitor corporate health and safety law violations enforce.

Transform Medi-Cal

Spending on Medi-Cal, the government’s Medicaid program for low-income residents, is expected to increase in the coming year due to the economic impact of the pandemic – as is enrollment. The program has approximately 13 million participants, or approximately a third of the state’s population.

In the coming year, Newsom will also be pushing a major overhaul of Medi-Cal as part of a project called CalAIM to deliver new benefits focused on mental health and substance use treatment, and to pay for some nontraditional costs like housing benefits . The hope is that the program will distract homeless and other vulnerable people from the expensive emergency room and keep them out of prison.

State Medi-Cal officials estimate the program would cost $ 1.1 billion in the first year. The state is working with the Federal Centers for Medicare & Medicaid Services to get approval for the program.

Newsom plans to extend the benefits of Medi-Cal to include over-the-counter cold medication and blood glucose meters for people with diabetes. His budget includes $ 95 million for a significant expansion of telehealth services that would enable permanent higher payments for virtual doctor visits.

Control healthcare costs

Newsom proposes a new government agency, the Office of Health Care Affordability, to help control healthcare costs. He has budgeted $ 63 million for the office over the next three years to set health care cost goals for the health care industry – along with financial penalties for failing to meet future goals.

Powerful groups in the health care industry said they are still considering whether they will support the proposal. However, some expressed concern last year when Newsom launched the idea. Doctors and hospitals in Sacramento routinely fight proposals that could cut their revenues.

Newsom admitted on Friday that the task would be “difficult”.

Combating homelessness and food insecurity

Newsom proposes a one-time infusion of $ 1.75 billion to help tackle homelessness.

According to Newsom, $ 750 million would help counties buy hotels and convert them into permanent homes for the chronically homeless. Another $ 750 million would allow counties to acquire facilities to treat people with mental illness or substance use disorders. And $ 250 million would help counties buy and renovate homes for low-income elderly people.

Newsom’s budget also includes $ 30 million to help overstretched food banks and food aid programs.

Lawmakers said they plan to negotiate even more funding for homeless and safety net programs.

“It is imperative that we significantly increase our investment in combating homelessness because the need is so great,” said Congregation member David Chiu (D-San Francisco). “And I don’t think there’s a single legislator who isn’t incredibly concerned about the food insecurity we’re seeing: lines around the block for food banks in arguably the richest state in the country.”

Expansion of health insurance

Newsom did not include money in its proposed budget to extend Medi-Cal to unauthorized immigrants 65 and over. He had previously promised to fund the proposal, which when fully implemented is estimated to cost $ 350 million a year. However, he said the state could not afford to cover the running costs on Friday with a projected budget deficit beginning in fiscal 2022-23. California already offers full Medicaid benefits to income-earning unauthorized immigrants up to the age of 26.

Some lawmakers and health care advocates countered that providing health insurance to undocumented immigrants would save lives and reduce costs, especially during the pandemic, and vowed to continue fighting for expansion.

“Saying we’re disappointed makes it easy,” said Orville Thomas, a lobbyist at the California Immigrant Policy Center. “These are Californians who die and get disproportionately ill during the Covid.”

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