California Governor’s Plan to Trim Budget Deficit Includes Delay of CHIP Expansion

Faced with an anticipated $12.4 billion deficit by June 30, 2003, California Gov. Gray Davis (D) announced Nov. 14 that he will seek $2.2 billion in spending cuts, including a delay in the planned expansion of the state's CHIP program to cover parents, the Contra Costa Times reports. The $12.4 billion figure represents 15% of the state's general fund, and is so large that it exceeds this year's $10.3 billion budget for Medi-Cal, the state's Medicaid program (LaMar, Contra Costa Times, 11/15). Davis said that he will call a special session of the state Legislature in January to consider the cuts and "funding shifts," which will actually amount to nearly $3 billion because a "number ... would carry over from the current fiscal year to save the state another $758 million in the 2002-03 budget year," the Los Angeles Times reports. Davis proposed to delay until July 2003 an planned expansion of Healthy Families, the state's CHIP program, to include coverage for some low-income parents. The state is awaiting federal approval of a waiver for the expansion. The delay would save the state $54.3 million in the current fiscal year and $160.5 million in 2002-03 (Tamaki, Los Angeles Times, 11/15). Jim Keddy, director of the faith-based group PICO California Project, criticized Davis' plan, saying the state would forfeit $1 billion in federal matching funds is the money is not used for the expansion. "We just started to make progress for working-class families, and this proposed delay is going backward. From our point of view, it's shortsighted," he said (Contra Costa Times, 11/15).