HealthyCal.org

By Daniel Weintraub

As Californians head to the polls, taxes will be the biggest issue on the state ballot—again.

Gov. Jerry Brown is sponsoring Proposition 30, which would raise income taxes on people earning $250,000 or more and increase the sales tax by a quarter-cent on the dollar.
Lawyer and social activist Molly Munger, meanwhile, is backing Proposition 38, which would increase income taxes on nearly everyone, with the wealthy paying more than lower income people.

Munger’s proposal would raise more money than Brown’s – about $10 billion to his $6 billion — and dedicate most of it to public education. Brown says his measure is about helping the schools, too, but the money it raises would actually go into the state’s general fund and be available for any purpose deemed a priority by Brown and the Legislature.
Still, since schools get the biggest share of the budget, it is fair to say that they will be the biggest beneficiary if either proposition passes, and the biggest losers if both measures are defeated.

Opponents of both measures say Californians are already taxed too much. They say the better way to solve the state’s budget problems is to cut spending.

So how are voters supposed to sort it all out?

Many will simply vote their pocketbooks. Polls show that a plurality of Californians believe the state needs a combination of higher taxes and spending cuts to work through our problems. But they are generally willing to vote only for taxes that fall on someone else, not themselves.

Voters who are open to looking beyond their own financial situation face a series of tough questions before deciding how to vote.

First, does California need more revenue?

The state is facing an $8.5 billion shortfall in the current year, even after making deep cuts to health and social services. The state has cut welfare grants and placed stricter limits on how long people can stay on public assistance, reduced care for the aged and disabled in their homes, cut benefits in the Medi-Cal health program for the poor and reduced subsidized child care slots for low-income families. College students and their parents have been asked to pay higher tuition.

While the state’s perpetual deficits give the impression that spending is out of control, as a share of the economy California’s state government spending has been stable, if not actually declining, for many years. Last year the state spent $5.14 from its general fund for every $100 in personal income generated in the economy – the lowest since 1973.
Is the bureaucracy bloated? In 2011, California had the fifth lowest number of state employees per capita in the nation, according to economist Steve Levy at the Center for the Continuing Study of the California Economy. The number of state employees as a share of the population peaked at 9.9 per 1,000 people in 1978 and has fluctuated just below that level ever since, according to state figures. This year it’s down to about 9.1 employees for every 1,000 people in the state.

But California does pay its employees more than any other state, partly because we have such a high cost of living. And that payroll, and the benefits that go along with it, are one reason California is a relatively high-tax state.

California’s income tax, with a top rate of 10.3 percent, is second only to Hawaii. The statewide sales tax rate of 7.25 percent is the highest in the nation. The corporate tax rate of 8.84 percent is the ninth highest in the country, and the highest in the west.

Overall, California ranked 11th in 2010-11 in revenue raised as percentage of personal income, but that included some temporary taxes that have since expired. Counting state and local taxes, California was 13th in the nation in 2008-09, according to the California Budget Project, a non-profit group that tracks state fiscal policy.

If, for the sake of argument, you accept the idea that the state needs more money, the next question would be: Where best to raise it? And that question probably has different answers depending on whether you ponder it as a policy matter or also take politics into consideration.

Policy experts are nearly unanimous in agreeing that California already relies too heavily on the income tax, and its income tax relies heavily on the state’s wealthiest citizens.

Twenty years ago, the sales tax and the income tax brought in roughly equal amounts of revenue. But the sales tax has since declined as a percentage of the budget, and the income tax has soared. Last year the income tax represented 57 percent of the state’s general fund revenue, while the sales tax was just 20 percent.

That dependence on the income tax makes the state vulnerable to a revenue rollercoaster. The income tax is highly progressive – a family of four with income below $50,000 typically doesn’t pay anything at all, while the top 1 percent pay half of all the income tax. Those high earners, who get much of their money from investments, see wild swings in their income, and their tax liability, as the economy grows and shrinks.

In good times their payments give the state a surge in revenues, and it has been the Legislature’s custom to spend that money, building it into ongoing commitments to the schools, health and social services. But when the economy slumps, the wealthy usually take a hit, and their tax payments drop. The result: big deficits.

So to make budgeting more predictable, California would be better off not depending so heavily on the wealthy.

But the state keeps moving in that direction anyway. Since the wealthy are a tiny minority, it’s easier for those who want to raise taxes to target them at the ballot box. In the Legislature, meanwhile, Republicans have been able to reduce the effective corporate tax rate by demanding rate cuts or tax breaks in exchange for their votes on the budget, or at least they did so until voters gave the Democrats the ability to pass a budget on a simple majority vote.

What California needs is tax reform that would simplify the system, broaden the tax base and lower the rates while bringing in more revenue, if not in the short term then over time, as the economy grows. If that sort of reform is not possible, then the state ought to have a rainy day fund that forces legislators to set aside money in boom years to cushion the blow when the economy slows.

But neither of those options is on the ballot this year. So if you believe the state needs more revenue, the only currently viable option is to tax the rich. And while that might help balance the budget this year, it might mean more problems down the road, after the next economic boom and bust.

As Abraham Maslow said, if your only tool is a hammer, every problem looks like a nail.

California’s hammer is taxing the rich. The governor is urging us to commence pounding.

Daniel Weintraub has covered California public policy for 25 years. He is editor of the California Health Report at www.healthycal.org

Photo: surroundsound 5000/flickr

By Callie Shanafelt
California Health Report

The Affordable Care Act was intended to provide insurance for the uninsured – with one notable exception. Undocumented immigrants and lawfully present immigrants who’ve been here less than five years are excluded from health care reform. They are not eligible to purchase private insurance on state exchanges and they remain ineligible for Medicaid.

National Immigration Law Center Health Policy Attorney Sonal Ambegaokar says the decision to exclude those populations was purely political — since excluding them undermines the effectiveness of the reform.

“The goal of the first step was to provide affordable coverage for as many people as possible,” Ambegaokar said. “You want as many people in the insurance pool because you want to spread the risk. Excluding immigrants is counter-productive.”

As of 2010, there were about 38 million immigrants living in the United States. The Pew Hispanic Center estimates about 11.2 million of them are undocumented.

Non-citizens, both undocumented and lawfully present, are three times more likely then U.S.-born citizens to be uninsured, according to the Kaiser Family Foundation. They tend to work in jobs without employer sponsored health care. Their access to Medicaid and the Children’s Health Insurance Program (CHIP) is also limited. Altogether, they account for 20 percent of the uninsured.

The Congressional Budget Office estimates that 30 million Americans will remain uninsured two years after the Medicaid expansion and state health benefit exchanges are established in 2014.

Twenty-five percent of the remaining uninsured will not qualify for coverage because of immigration status, according to a recent report from the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research.

Spreading the word

The report also found, however, that half of those still uninsured five years after the reforms take effect will actually qualify for the expanded Medi-Cal coverage or health benefit exchange subsidies, but will not enroll because of poor outreach. A large majority of the remaining uninsured will be Latino (66 percent), limited English proficient (60 percent) and/or residents of Southern California (62 percent).

Chad Silva, Policy Director for The Latino Coalition for a Healthy California, worries that the state doesn’t realize the resources and grassroots efforts it would take to reach these populations.

Partnerships with community-based organizations are fundamental for connecting to residents that are often labeled “hard to reach,” Silva said. Community health educators called promotoras are particularly important, providing both formal and informal networks of people educating their neighbors in Latino communities throughout the state.

Another key reason that people who qualify will remain uninsured is confusion about who is covered and who is not. In 2010, more than 6 million citizen children were living in a “mixed citizenship status” family, with at least one non-citizen parent. These families aren’t likely to apply for coverage for anyone in the family, Sonal Ambegaokar said, when they hear that non-citizens aren’t covered.

Community clinics can play an essential role in providing for these patients because they will be able to care for the newly insured as well as those who remain uninsured. The 10 clinics in the San Francisco Community Clinic Consortium (SFCCC) provide a medical home for the whole family, said John Gressman, President and CEO of SFCCC.

The SFCCC is developing an outreach plan with other clinics throughout the state to help their patients understand what the reforms will mean for them. They will also help clients enroll when the California health benefit exchange opens October 1, 2013.

Latinos also have the most to gain from the ACA, Silva said. According to recent estimates by the California Pan-Ethnic Health Network (CPEHN) more than two million Latinos will be newly eligible for Medi-Cal or insurance subsidies through the health benefit exchange. The fact that childless adults now qualify for Medi-Cal is also a boon for young Latinos.

Treating the uninsured after the ACA

SFCCC clinics expect 35 percent of their clients will qualify for new coverage, but Gressman is struggling to figure out how to pay for the care of the 25 percent of their patients who will remain uninsured. “We can’t use Medi-Cal or any federal dollars through the exchange,” Gressman said. “There are many conversations trying to figure out how we can finance this, but I don’t think anyone has solved this.”

One strategy is to try to reduce their costs and reorganize the way they provide care. The SFCCC clinics are changing to a team-based care model in order to be more efficient. “We want providers and staff members working to the top of their profession and delegating what others can do,” Gressman said.

Reducing health disparities is another way providers could reduce cost. SFCCC clinics are trying to do that by training providers in culturally competent health care.

Only 5 percent of doctors in California are Latinos while 38 percent of the population is Latino, Silva noted. Increasing the number of Spanish-speaking doctors is another way to improve cultural competency, currently about one quarter of Californian physicians speak Spanish according to a 2004 UCLA study.

Hospitals will still be required to provide emergency care to anyone who walks through their door. The ACA scales back “disproportionate care payments” to hospitals by about $18 billion from 2014 to 2020 on the premise that there will be less uninsured. But many hospitals are concerned they will continue to bear a disproportionate burden of providing for those who are still uninsured.

Undocumented immigrants avoid hospitals because of fear, Silva said. “They have to be walking dead before they go in,” Silva said. Community clinics have provided and will continue to provide an important safety net for uninsured Latinos, he said.

Luis Garcia, an immigrant from Mexico, can’t get insurance through the restaurant where he works, so he seeks care from Contra Costa County Community Health Clinics. His uninsured friends, he said, build up personal pharmacies by having relatives send them medications such as antibiotics that are cheaper and more readily available in their home countries. Some also frequent local herberias to seek natural remedies for what ails them.

Health advocates continue to lobby legislators to remove immigration status as a factor for qualifying for coverage in addition to their education and outreach efforts.

“The simpler the system the better the access will be,” Sonal Ambegaokar said.

The National Immigration Law Center is supporting the federal Health Equity and Accountability Act proposed in April by Hawaiian Senator Daniel Akaka. The legislation removes immigration qualifications to purchase insurance through the exchange and invests in community clinics and culturally competent care. The bill is currently in committee.

Any other changes in health care options for immigrants will likely have to be included in immigration reform, Silva said.

The most contentious issue at the moment is coverage for a group of hundreds of thousands of undocumented immigrants who came here as children, attended school and met other requirements to be allowed to stay in the country without threat of deportation.

The Obama administration ruled that they don’t fit the lawfully present definition of the ACA in August.

Silva advocates reevaluating what it means to be lawfully present.

“You certainly don’t want a large group of people going uninsured,” Silva said, “just in terms of public health.”

By Daniel Weintraub

It’s conventional wisdom in political circles that California, like the rest of the country, has become more polarized in recent years. Just watch any election campaign or session of the Legislature and it seems clear that we are a hopelessly divided people.

But is that really true?

It might not be.

There is good reason to believe that our politics and government are far more sharply divided than our people, that our representatives are not a very good representation of ourselves.

And, at least in California, there is a counter-intuitive reason for that trend.

Every year, more Californians declare their independence from the political parties, deciding to register to vote without choosing a party preference. Many do so because they find the parties too rigid, too extreme, or are turned off by the idea that all of their beliefs are supposed to fit neatly within someone else’s framework.

But as moderate Democrats and moderate Republicans abandon the parties, they are leaving those parties to the true believers, the party activists and ideologues for whom compromise and pragmatism are dirty words.

The result: the parties are becoming smaller, but more polarized. And since the political parties still control the political system and, ultimately, the government, these institutions also become polarized. That’s the twist: the more that Californians are repelled by this polarization and quit party politics, the more they leave politics to the partisans, and the worse the problem gets. It feeds on itself.

The latest numbers show that more than 21 percent of California voters are now registered without a party, double the share of the electorate that declined to state a party preference 20 years ago. At the same time, the percentage of Californians who are members of the Democratic Party has declined from 49.1 percent to 43.4 percent, and the share that is Republican dropped from 37 percent to 30.2 percent.

Just since the last presidential election, the actual number of independent voters has grown by 200,000. (to 3.65 million) while the total number of registered voters has remained about flat.

To be sure, not all independent voters are moderates, or even truly independent. A plurality identify with the Democratic Party, according to surveys by the Public Policy Institute of California. In fact, their split, when pushed, is almost identical to the electorate as a whole: 43 percent lean toward the Democrats, and 30 percent lean toward the Republicans.

But there are reasons that these voters do not register as members of the parties with which they tend to identify. One reason may simply be that Americans are less and less inclined to identify with big institutions. Churches, labor unions and civic groups have all seen a decline in membership, and political parties are no different. With the advent of the Internet, more people have decided that when it comes to gathering information about candidates and issues, they can do for themselves what they once depended on the parties to do for them.

But it’s common sense that the people most likely to leave the parties are those for whom party politics is least attractive. And as they exit, their absence creates a bigger gap between the parties than used to exist. A higher percentage of registered Democrats now call themselves liberal than a decade ago, and more of those who remain Republicans think of themselves as conservative.

“It’s a distilling effect,” said Mark Baldassare, president and CEO of the Public Policy Institute and a longtime California pollster.

Baldassare’s surveys have shown how this distillation of party purity translates into positions on policy.

On the question of whether government regulation of business does more harm than good, for example, Democrats have always tended to think it does more good, while Republicans think it does harm. But the gap between the two parties on that question has grown from 26 percent in 2000 to 43 percent today.

In 2000 there was a 15-percentage point gap between the parties on whether environmental regulation came at a cost of economic growth and jobs. Today that gap is 35 percent.

And on the matter of whether immigrants are a burden because they use too many public services, the gap between the parties has grown from 14 percent in 2000 to 32 percent today.

How long will this trend continue? As party participation becomes a smaller and smaller share of the electorate, the parties will become more and more divided, and, probably, more combative in their approaches to one another. But if the past is any indication, this will drive still more people out of the party system.

At some point, independent voters could claim a plurality (their numbers are already closing in on the Republicans). And that might lead to changes that remove parties from their official role in our politics and government.

Two recent reforms approved by voters moved California in that direction. The first took the job of redrawing political boundaries away from the Legislature and gave it to an independent commission. That change gave us new districts that more closely follow geography and local government boundaries rather than reflecting the needs of incumbent lawmakers or their parties.

The second reform replaced partisan primaries with an open primary that allows voters to choose any candidate regardless of party. The top two finishers move on to a run-off in November.

This forces candidates to pay attention to voters across the political spectrum in the primaries, when they used to run only to the far right or the far left to appeal to those most likely to vote in the party preference contests. In districts that are overwhelmingly Democrat or Republican, it is possible for the top two finishers in the primary to be from the same party.

This year, there are 28 such contests for the Legislature and Congress. In some of those races, two Democrats will be campaigning for independent and Republican votes. And the opposite will happen with Republicans in heavily Republican districts looking for Democrats’ votes.

This ought to result in less dogmatic, more pragmatic people getting elected to the Legislature. Perhaps it will be only a handful, but even that could be the start of a new bridge across the gulf that separates the parties, a small reflection of California’s large but underappreciated political center.

The next logical step would be to make state government, like local government, officially nonpartisan. The parties would still exist, but they would be private associations only, like the Sierra Club or the Chamber of Commerce. They could endorse candidates and campaign for them but they would have no official role in the process.

There is no guarantee that a nonpartisan state government would be better than the one we have today. But California’s experience with local government suggests that it would be. And it is hard to believe it could get much worse.

Daniel Weintraub has covered California public policy for 25 years. He is editor of the California Health Report at www.healthycal.org

California’s unemployment rate decreased to 10.2 percent in September as employers added 8,500 jobs during the month, according to numbers released Friday by the state Employment Development Department. The unemployment rate was 10.6 percent in August and 11.7 percent in September 2011.

There were job gains totaling 28,300 jobs in six categories — trade, transportation and utilities; information; financial activities;
professional and business services; educational and health services; and leisure and
hospitality. Job losses of 19,800 were spread over five industry sectors: mining and logging; construction; manufacturing; other services; and
government. Government reported the largest employment decrease, down 6,400 jobs.

To see the full release from the EDD, go here.

By Daniel Weintraub

California government has a reputation, rightly deserved, for being dysfunctional. Voters rank legislators down there with car salesman on the trust scale, and the bureaucracy doesn’t do much better with the public.

So it’s worth taking notice when the state does something right, especially when it happens in a matter of life and death.

That was the case with California’s response to an epidemic of pertussis, better known as whooping cough.

The disease is a nasty respiratory infection that can last for months and is sometimes deadly, especially in infants, who typically don’t get immunized until they are three months old. The illness cycles through the population on a somewhat regular rhythm, with peaks every three to five years.

So it did not come as a shock to doctors at the state Department of Public Health when they got a call early in 2010 from staff at a children’s hospital in Madera County. We just want to make sure, the caller said, that you know about this spike in whooping cough that we’ve been seeing.

Pertussis is a “reportable disease,” which means doctors and other health workers are required to notify their local health department when they treat a case, and each one is investigated. So the mounting number of cases in the Central Valley and elsewhere would have come to the attention of health officials in Sacramento in due course. But the phone call let them know what was coming.

“We hopped on that right away,” Dr. John Talarico, who heads the department’s immunization branch, told me in an interview.

By then, however, the disease was already in full flower across most of California.
And it soon became apparent that this epidemic was going to be worse than the last one, in 2005. Eventually, it would become the most serious in 50 years.

The severity of the epidemic seemed tied to a relatively new vaccine introduced in the 1990s. The new drug replaced one that was effective but was the subject of complaints about side effects, including high fevers and seizures. The new vaccine had fewer side effects, but it also wore off more quickly. Unlike immunizations for measles, the whooping cough vaccine does not last a lifetime.

The result was that even children who had received a full series of five vaccinations before starting kindergarten were coming down with the disease a few years later, before they got their booster shot at age 11 or 12, and when they should have still been protected.

People were still more likely to get the disease if they had not been immunized, but the number of victims who had been fully vaccinated surprised many experts. One study in Marin County found that 80 percent of those with whooping cough in 2010 had been vaccinated.

Once the magnitude of the problem became clear, the Department of Public Health swung into action with a massive public information campaign warning Californians about the epidemic and encouraging people to be vaccinated. The department also increased awareness of the epidemic among doctors and clinics to prompt earlier diagnosis and treatment. And using federal funds, the state offered free vaccine to local health departments and hospitals.

In a key move, the state also expanded the population targeted for vaccines to include seniors, children between 7 and 10 years old who had not completed the vaccination series already, and women of childbearing age before, during or after pregnancy.

This was important move because infants who have not yet been immunized are at the greatest risk for catching the disease, and they usually get it from their mother or another close relative.

“There is a concept called cocooning,” Dr. Talarico said. “You try to immunize all of those around an infant who have close contact with it, so they don’t get the disease and the baby is protected.”

It took some time for all of these moves to penetrate doctor’s offices, clinics and hospitals across the state. Meanwhile, the epidemic gained strength.

By the end of June, 1,337 cases had been reported, and there were five deaths, all infants aged two months or less. A month later the number of cases had grown to more than 2,400, six times as many as at the same point in 2009. And the death toll had climbed to seven. Before the year was over, more than 9,000 people would be infected, and 10 infants were dead. Only one of them had been vaccinated – and that was a baby who had been born premature at 28 weeks gestation.

But the epidemic peaked in July of 2010. That month, the rate was 45 cases per 100,000 Californians. It fell to just two per 100,000 in December, 2011. And so far this year the rate is less than 1 per 100,000 — near historic lows. Most significantly, there has not been a death attributed to the disease since October of 2010.

In the midst of the crisis, the Legislature, on bipartisan votes, passed a law requiring all students entering or continuing school from seventh through 12th grade to have had a booster shot protecting them against whooping cough. While that law did not take effect until the summer of 2011, it appears to be helping to keep the disease at bay, and it will likely help prevent the next spike in cases from being anything like the one the state endured in 2010.

Unfortunately, much of the rest of the country is now going through what California experienced two years ago, and many states have it far worse. In Wisconsin, the rate is 79 per 100,000; in Minnesota it is 63 per 100,000; in Washington, 58.

Learning from California’s misery, other states are implementing many of the same strategies that helped end the epidemic here. National guidelines for immunizations have also been tweaked to reflect the lessons learned in California.

It’s nice to know that while California led the nation going into this epidemic, the state’s public health establishment reacted quickly and effectively. And now other Americans might benefit from our experience.

Daniel Weintraub has covered California public policy for 25 years. He is editor of the California Health Report at www.healthycal.org