Sacramento Update
May 23, 2015
We are heading into the last week of bills moving from their house of origin. For those
bills still moving, a number are either on the floor of their respective houses or already
in the second house. Many more bills are still awaiting a vote to move off suspense.
Assembly Appropriations will meet on Thursday, May 28th and there are 16 pages of
bills to be dispensed with – either voted off suspense or the bill is held in committee.
Senate Appropriations also meets on May 28th, there are well over one hundred bills
scheduled for that day.
When bills are in suspense, there is no testimony nor can the authors present the bills.
The process for Suspense is as follows:
The Chair, calls each bill and the vote is:
A roll call – all committee members vote for the bill to move to the floor
B roll call – only Dems vote for the bill to move
The bill is not called, meaning it was not voted off suspense
The May revise occurs every May, usually about mid- month and allows the Governor to
“update” his budget. The changes to the budget are based on revenues coming into the
state during January through April and other concerns, the governor will “tweak” the
various policy areas. The May revisions also allow the legislative budgets to be finalized.
This coming week, budget hearings will be completed and a Conference Committee will
be established to review those items for which there is no agreement.
If an item is approved in one house and not the other, the item will be part of the
Conference discussion. The Conference Committee is usually comprised of the Chairs of
Assembly and Senate Budget Committees along with 2 Republicans – one from each
house and the remaining members are Democrats. The Conference Committee
discussions are open to the public, but no public comment is taken. Discussions occur
between the committee members, the Dept. of Finance – governor’s budget staff and the
LAO – the legislature’s budget staff. However, there is much advocacy going on between
lobbyists and the aforementioned staff in between hearings. The budget bill which has to
be on the Governor’s desk by midnight of June 15th will represent the priorities of the
legislature and the governor.
Budget Issues
As noted last week, the key issues for the Governor were:
In keeping with Prop 98 - $5.5 billion, of the $6.7 billion additional revenue, was
appropriated to K-14
Lydia Bourne, Legislative Advocate
Page 1 of 4
The rainy day fund – Prop 2 - will received $633 million and an equal amount to
pay down outstanding debt.
Additionally, the Governor committed new spending to only three areas:
The California Earned Income Tax Credit, first ever, which will assist the state’s
lowest-income workers. The credit will provide $380 million in benefits to
2 million Californians.
No tuition increases for students at UC or CSU for 2 years. CSU receives
additional funding and UC temporary assistance to pay off unfunded pension
liability.
Providing health care and other safety net services to currently undocumented
immigrants who gain Permanent Residence Under Color of Law, this is based
on the President’s executive actions.
For more detail on each area of the budget, please click the link:
http://www.dof.ca.gov/documents/2015-16_May_Revision.pdf
The LAO also provides their assessment of the governor’s budget, at this link:
http://www.lao.ca.gov/Budget?subjectArea=OMR
Economy and Unemployment
A recent report from the Dept. of Employment Development and the Dept. of Finance
states that we have the lowest rate of unemployment since 2008. The unemployment
rate statewide fell to 6.3 percent, down two-tenths of a percent. Nonfarm employers
added 29,500 jobs during April. A year ago, the unemployment rate was 6.9 percent in
Sacramento and 7.8 percent across the state.
The improving economy has assisted housing sales, which are up for the fifth straight
month with the last three in double digits. However, discussions continue on how to
address the high cost of housing in California, the lack of adequate subsidized homes for
lower income families and most problematic, how do we address these issues?
As a sign of the improving economy and to start to address the increasing wage gap, on
Wednesday, May 20th, the Los Angeles City Council passed a staged increase that would
get the minimum up to $15 by 2020, by a vote of 14 to 1.
The New York Times reports “Los Angeles is the fourth city, and by far the largest, to
enact a $15 minimum in the past year. The others are Seattle, San Francisco and
Emeryville, California. A $15 minimum has been proposed in New York City,
Washington, D.C., and Kansas City, Mo.”
Lydia Bourne, Legislative Advocate
Page 2 of 4
They further report that in spite of complaints from business groups, there is little
creditable evidence that jobs are lost, businesses close or leave the cities where this is
instituted. For more of the discussion, see links below:
http://www.nytimes.com/2015/05/21/opinion/a-15-minimum-wage-bombshell-in-losangeles.html
http://calwatchdog.com/2015/05/22/will-businesses-react-l-minimum-wage-boost/
Health Care
Covered California last Friday issued rules that will cap the cost of specialty drugs. These
are drugs that treat Hepatitis C, HIV, multiple sclerosis, etc. This new ruling affects
those consumers who are in the individual market. The costs for those in the silver and
platinum plans will pay $150-$250/month, bronze plans pay $500. The caps will take
effect starting in 2016.
Western Dental, the state’s largest provider of Denti-Cal services to low-income
patients, said it will no longer accept new patients under the program at more than a
dozen of its clinics starting June 1. Western Dental is concerned about the
reimbursement rates and states they are too low for providers to continue to provide
services, while covering costs.
It should be noted that a December 2014 audit report of the Denti-cal program showed
that “more than half the state's children in Denti-Cal were not getting regular dental
care and that 32 of California's 58 counties may have a dental access problem because of
a dearth of providers.” In a March 2015, an oversight committee comprised of the Joint
Legislative Audit committee along with the Assembly and Senate Health committees,
questioned DHCS regarding the findings. DHCS agreed to implement eleven standards
along with providing the results of a provider survey conducted in November and
December, 2014. An annual report will be provided to the Legislature.
One major issue that has plagued California for a number of years is the Medi-cal
provider reimbursement rate and again this budget cycle, the governor has not removed
the 10% Medi-cal reimbursement cut. It appears the budget committees will reverse the
cuts and also attempt to bring the Denti-cal reimbursement rates up as well.
Affordable Care Act
According to a report1 released in March by the health advocacy group, Health Access,
over a year into the full implementation of the Affordable Care Act, some 3 million
Californians still lack health insurance. For many, coverage is still unaffordable and
almost half of the 3 million are undocumented, and thus unable to access federal health
programs.
Lydia Bourne, Legislative Advocate
Page 3 of 4
By law, counties have to provide care to low-income individuals who are uninsured and
don’t qualify for other programs. But, says Anthony Wright, CEO “Counties interpret
this responsibility widely and wildly, in very different ways.” For example, of the state’s
58 counties, only ten “explicitly serve the undocumented in their programs.” “The rest
do not serve the undocumented outside of emergency care.”
While the governor’s budget will cover DACA and DAPA, most undocumented residents
don’t have coverage. SB 4 (Lara) - Health for All - which would mandate a system to
cover the undocumented is in Appropriations and given comments by the governor,
funding for such a program is unlikely.
Politics
The East Bay – SD 7 - special election held on May 19th was the one of the most
expensive special elections. The approximate cost was $7 million with two Democrats
running against each other. But more importantly Assemblywoman Bonilla, who lost
was backed by the Democratic Party and organized labor.
Steve Glazer, the winner, a close aide to Jerry Brown and a political consultant although
not endorsed by the governor, was favored by the Chamber of Commerce and other
business and political colleagues. This election was to complete the remaining one year
term of Senator DeSaulnier who was elected to congress. With Senator Glazer’s swearing
in this coming week, we will see the reception he receives in Sacramento and how soon
the next campaign activities will start.
Drought Issues
California is facing a four year long drought, it is estimated that 94% of California is now
in severe drought and 80% of the water is used by farmers. On Friday, California
regulators accepted an offer from farmers to reduce their water usage by 25% in an
effort to combat the drought. The concession was made after the Water Resources
Control board had threatened to cut off their water rights. Cities and towns have already
been required to reduce water usage by 25%. This agreement is seen as a sign of the
worsening impact of the ongoing drought and its effect on the state.
http://ca.gov/drought/
___________________________________________
1-http://www.health-access.org/images/pdfs/CountySafetyNetReportSurveyResults3-12-15.pdf
Various media sources
Lydia Bourne, Legislative Advocate
Page 4 of 4