Prop Zero
The Starting Point for Commentary and Coverage of California Politics

A Little Happy Budget News

Email
|
Print

    NEWSLETTERS

    After a tough week at a tough moment for California, how about a little happy budget news?

    California legislators often make trips to Washington D.C. to seek money only to leave empty-handed. But this week, the legislature's top two officials -- Assembly Speaker John Perez and state Senate President Pro Tem Darrell Steinberg -- came back from a Congressional visit with $1.5 billion for the state budget.

    Where does the money come from? It's additional cash to help California cover its share of the Medicaid program that provides health care to low-income, seniors, the disabled and children. This program is called Medi-Cal in our state.

    Typically, California gets the lowest "match rate" for Medicaid -- 50 percent. Which means that 50 percent of the money spent on Medi-Cal in California comes from federal money. In other words, we get $1 dollar for Medi-Cal for every $1 we spend on Medi-Cal. Most other states receive significantly more. (Why? Because the match is based in large part on the average income levels in states. This hurts California because even though we have a high percentage of poor folks who need Medicaid, we also have an unusually high number of rich people -- which makes the state' average income level high).

    However, since the recession began, all states have been getting extra matching money from the federal government. What Perez and Steinberg won is a six-month extension of that extra match. The value to the budget of that extension is $1.5 billion.

    What does that mean? In essence, a $20 billion budget deficit is now $18.5 billion. Have a good weekend.