California's budget impasse threatens health services
09 09 08 - 12:03
State budget impasse threatens health services
Matthew Yi, Chronicle Sacramento Bureau
California's budget impasse becomes the longest ever today, threatening to force the shutdown of many health care services across the state if a deal is not struck soon.
The state has been without a spending plan since the new fiscal year began on July 1. The previous record for the latest budget enacted was 67 days in 2002, when then-Gov. Gray Davis signed a spending plan on Sept. 5.
This year, Gov. Arnold Schwarzenegger and the Democratic-controlled Legislature have been unable to agree on a budget that closes a $17.2 billion gap.
Without a budget, hospitals, clinics and homes for disabled residents that rely on state funds to operate will have lost as much as $5.4 billion in state funds by the end of this month. State payments for most of them ended in July.
Many service providers, who gathered Friday outside the Capitol, said they've already received loans, maxed out their credit cards and even poured in personal funds to keep their centers open - and they are running out of time, money and options.
Among them was Sarane Collins, 44, who in her own words is a "chief financial officer of a sinking ship" that cares for 18 adults with disabilities in three homes in Santa Rosa. Some of the residents went with her to Sacramento on Friday.
After cutting paychecks Friday to about 40 employees, her nonprofit will be broke, she said. Collins is hoping she can get a loan from the North Bay Regional Center, one of 21 nonprofit centers in California that administer funds to centers serving people with disabilities.
"This is a financial crisis as big as Katrina," Collins said, referring to the hurricane that wreaked havoc in New Orleans three years ago. "We need the National Guard or something. This is a disaster ... and it's only going to get worse."
Collins last received payment from the state on July 10. Since then, her nonprofit, called Slow Sculpture, has taken out a $60,000 line of credit and maxed out its credit cards at $50,000. The pharmacist who works with her clients has loaned $30,000 of his personal funds, and Collins has also poured in $15,000 of her own money.
'Financial suicide'
"I'm going to see if I can get another credit card," Collins said. "We're committing financial suicide, I know. But what else can you do?"
She is considering telling her board of directors to shut down the nonprofit. Two or three of her 18 clients have family members who can take them in, while the rest would have to find skilled nursing care elsewhere, she said.
"Some of our guys need constant oxygen," she said. "Five people are tube-fed. We have people with seizure disorders. Some have as many as 20 medications each day. We have people who have stage-4 sarcoma cancer, and 90 percent of our clients are in wheelchairs."
Other health care providers painted a similarly grim picture at the Sacramento news conference.
Charles Guenther, chief executive officer of Eastern Plumas Health Care, said his board of directors considered this week shutting down one of two hospitals that serve Plumas County in the Sierra foothills.
He told them they could hold off on the decision for two or three more weeks, but the financial situation is dire for the system that serves 12,000 to 15,000 people, Guenther said.
"All vendors have us on cash-only status," he said. "Our chief financial officer paid the electric bill with her own credit card last week. We're not talking about speculative impact. We're talking about what's happening today."
Many of the providers had harsh words for lawmakers and Schwarzenegger for failing to enact a budget.
"I think they should be criminally prosecuted for negligence," Guenther said.
Carmela Castellano-Garcia, president and CEO of California Primary Care Association, said, "For over two months, we've heard Democrats and Republicans talk about how they care about Californians. ... Well, actions speak louder than words."
Declaring an emergency
Some of the providers called on Schwarzenegger and the Legislature to approve an emergency appropriation, an idea some Republican lawmakers have pushed for in recent weeks.
"If we can't agree on a budget, we should be able to agree to take care of those who are in need," said Assembly Republican leader Mike Villines from Clovis (Fresno County). "We should never hold innocent people hostage and use them as pressure to get the budget done."
But the governor would have to first ask the Legislature for emergency appropriation, and his spokeswoman maintained Friday that Schwarzenegger wants to enact a budget, not borrow more money for the short term.
The governor's budget proposal, which includes a temporary, 1-cent increase in the sales tax followed by a permanent cut, got a boost Friday with an endorsement from the California Taxpayers Association.
Record Capitol deadlock
Today marks the 68th day California's budget has been past the due date of June 30, breaking the previous record of 67 days set six years ago. According to the Department of Finance, here are the latest dates budgets have been enacted:
2008
68 days
... and counting
2002
67 days
Signed Sept. 5
1992
64 days
Signed Sept. 2
2007
55 days
Signed Aug. 24
1998
52 days
Signed Aug. 21
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