HealthyCal.org

By Michael Gardner of the San Diego Union Tribune
for HealthyCal.org

SACRAMENTO – While Gov. Jerry Brown and lawmakers wrestle with the budget crisis, some Californians are adamant that much of the problem can be laid at the feet of people who are in the country illegally.

Their message is: stop teaching the kids, cut-off welfare checks and ship the prisoners back home.

That way, billions of dollars spent on services could be put to work cutting the deficit, paying for vital programs and keeping tax increases at bay.

But that’s easier said than done.

Court rulings require California to teach every child regardless of citizenship. Ditto for treating emergency cases in the hospital. All children born in this country are citizens, so counties are required to provide cash aid and other services, even if their parents are here illegally. And the federal government has been pretty stingy when it comes to reimbursing states for the rising tab.

California is home to more undocumented immigrants than any other state. There were nearly 2.6 million here in 2010, according to the Department of Homeland Security. More than half are from Mexico.

With so many here, there is certainly a case to be made that taxpayers cover billions of dollars, mostly for classrooms, hospitals and prisons.

But there is an equally sound case to be made that, while here, many illegal immigrants pay into the system, from sales tax on clothes to property tax on homes. Many paychecks are docked for Social Security that likely will never be collected.

There have been a handful of studies from the left and right, as well as a report by the Congressional Budget Office, assessing the cost and contributions of undocumented immigrants. But none has been received as definitive.

In California, the closest to an unbiased review is offered by the state Legislative Analyst’s Office. The nonpartisan analyst pegs the state’s costs at $4.2 billion. But even then, some information is imprecise, mostly because accurate figures are hard to come by.
In an interview, Deputy Legislative Analyst Dan Carson, who tracks the issue, said it is impossible to pinpoint how much could be saved, given legal constraints.

In many instances “you need federal and court” action, Carson said. Also, big savings are accompanied with major policy headaches, such as how to release prisoners or how to refuse vital medical care.

Consider the prisons. It’s one thing to deport inmates once they have done their time and are about to be released. But sending convicted felons back home, with no guarantee that they would serve their sentences, would be giving them lighter treatment than legal residents who commit the same crimes. It is conceivable that a convicted murderer could be deported, released by his home country and return to California to offend again.

Anti-illegal immigration lawmakers are not convinced. They believe the state exaggerates the barriers to taking action -– mostly to avoid riling a huge Latino constituency.

“That’s a dodge. We’re not handcuffed,” said Assemblyman Tim Donnelly, R-Twin Peaks, an outspoken critic of immigration policy. He believes the state could find billions if policymakers could only muster the will. “There’s a lot we can do, but it’s not politically correct to do it,” Donnelly said.

Donnelly said he does not advocate tossing kids out of class or refusing to treat seriously hurt undocumented aliens. He also recognizes the legal obstacles.

Rather, he proposes a broader, long-term strategy ranging from more border enforcement to a Marshall Plan to invest in Mexico. Many of the measures he advocates would likely have to include actions by the federal government.

That includes tougher verification of immigration status before hiring. He also favors a guest-worker program with caveats. Among those: allow workers to come here as long as they go back to their home country first. They would have first-call on entry since they already have a job. But they would have to take their family home and leave them there to make sure taxpayers are not billed for services.

That would also produce more income taxes for the state by limiting the underground economy, he said.

Donnelly said there are savings to be had immediately. For example, stepped up verification of status could also save taxpayers millions by eliminating fraudulent collection of aid. Those here illegally also should not be allowed to use hospitals for routine care.

The conservative-leaning Federation for American Immigration Reform estimates that the national bill for undocumented immigration is $113 billion every year. Of that, California’s share is $21.75 billion, including state and federal costs. That figure takes in the cost of services, from education to housing assistance to medical care, as well as law enforcement to patrol borders and keep criminals in jail. The group said contributions from those here illegally, such as paying into Social Security and other taxes, amounts to $13.4 billion.

The report, compiled in July 2010 and revised earlier this year, used as its foundation an estimate of 13 million people in the country illegally. The FAIR study drew on existing census information and extrapolated various costs associated with everything from courts to schools to welfare. But it also included costs of migrant education, the immigration review office, the National Guard and Coast Guard.

The state Legislative Analyst study was not as broad, keeping its research focused on the state’s largest program costs.

The Congressional Budget Office in December 2007 released an analysis of 29 various reports over 15 years. The federal office concluded that “state and local governments incur costs for providing services to unauthorized immigrants and have limited options for avoiding or minimizing these costs.”

Also, the federal office determined that taxes paid by undocumented immigrants do not offset the cost of services and federal aid does not fully repay states for expenses.

San Diego State University professor John Weeks, in a 2006-2007 study, estimated that it cost San Diego County $101.5 million that year to provide services. About three-fourths of that was related to law enforcement, he said.

Legal residents paid an average of $38.15 in taxes toward the bill in 2007, Weeks estimated. The population in the county illegally was placed at nearly 210,000 in 2007 – more than double the 1990 estimate.

Costs aside, contributions have to be part of any debate, Weeks said in an interview this month. Forcing immigrants to leave, he said, would be a blow to the economy given the kinds of jobs they are willing to do and taxes paid.

“Certainly sending people back to Mexico would not solve the budget crisis. It would only make it worse,” Weeks said.

“Undocumented immigrants are not a problem for the American economy. If anything, they are a bonus,” Weeks said. He called them an “exploited class” who provide “goods and services at a cost we otherwise couldn’t afford to pay.”

Critics counter that with so many legal residents out of work, the jobs could be filled quickly. More importantly, the broader philosophical belief remains: why reward someone in this country illegally? Providing services only encourages more to cross the border without papers, they say.

Gov. Brown straddled the middle when asked about the cost of illegal immigration.

“It s a difficult question,” he replied. “There are a lot of undocumented people working and paying Social Security and they never collect it. They work at wages Californians wouldn’t otherwise (accept) … Then you have the ones who graduated from our schools and are making enormous contributions … So you’ve got to net out. What the net is is, is a matter of dispute. Conservatives say it’s one thing and more liberal minded people say it’s another.”
And what does he say?

“I don’t think the evidence is clear,” Brown answered.

California Legislative Analyst

The nonpartisan Legislative Analyst, using data from the 2008-2009 fiscal year, concludes that the bill for providing services to undocumented immigrants and incarcerating those convicted of crimes is about $4.2 billion. The report did not measure how much could be saved if certain services are eliminated, but savings would certainly not approach that figure because many programs are required by Congress or the courts.

Spending on illegal immigrants primarily falls into the following five areas:

K-12 Schools: The cost is $1.9 billion. In California, 4.3 percent, or 270,000 children, are here illegally. . The courts have ruled that education is a right regardless of residency status.
Prisons: Spending reached $1 billion, but the federal government reimbursed just $100 million of that. (Separately, the California Department of Corrections reports there are about 18,300 “deportable felons” in state prisons. The vast majority – nearly 16,000 – are Mexican citizens. The average cost? $44,563 a year per inmate.)

Medical services: The $775 million cost is primarily driven by emergency care at hospitals, which is reimbursed by the state. Hospitals are prohibited from denying service based on residency status. Lawmakers could save money by deleting some services, such as cervical and breast cancer screening. However, the biggest expense – baby deliveries – is legally required regardless of the mother’s status.

Cash assistance: Through counties, the state helps about 230,000 children here legally even though the parents are not authorized to be in the U.S. The assistance is $345 for a child alone and is paid to the responsible adult, regardless of his or her eligibility. The cumulative cost to the state is $670 million.

Higher education:
Colleges do not collect “tens of millions of dollars” from students who do not have valid status. Those here illegally can qualify for lower in-state tuition – a big savings for them – if they can prove they have lived in California for three years and received a diploma from a high school in the state. That law has been upheld in court. However, they are not eligible for financial aid.

By Daniel Weintraub

The budget compromise struck last week by President Obama and Republicans in Congress will take $600 million from the anticipated growth in funding for community clinics, which were expected to play a major role in providing care as part of the federal health reform plan.

The agreement shaves that money from $1 billion that had been set aside for the expansion of community health centers, according to Carmela Castellano-Garcia, president and chief executive officer of the California Primary Care Association.

Of the remaining $400 million in that fund, $250 million is already committed, leaving just $150 million to finance new expansions for the health centers. Three hundred and fifty health centers have already applied for a piece of that money.

Castellano-Garcia said the $150 million left in the trust fund is “insufficient to allow for a significant expansion in the number of health centers.”

She said community clinic supporters were surprised by the cuts because historically they have enjoyed bipartisan support in Congress. The clinics are believed to be among the most cost-effective providers of subsidized care to low-income families. About 800 community clinics operate in California.

“I am extremely disappointed with these cuts and fear that the success of the Affordable Care Act is in jeopardy as a result of these reductions,” she said.

Although some advocates were hoping they could derail the cuts in the Senate, that didn’t happen.

Castellano-Garcia noted that Senate Democrats, on the Appropriations Committee web page, are touting the agreement as a success because it prevented any cuts in current levels of service at the community health centers.

That may be. But without new funding, the clinics could be overwhelmed when millions of new clients become eligible for health care in 2014.

By Jennifer Chaussee

In California’s state Capitol, they call it counter-cyclical, a mundane term used to describe the volatile rollercoaster effect of a bad economy on government-run social programs. As the economy and tax revenues decline, demand for many state-run programs increases, putting more stress on the budget just when it can handle it least.

The grand daddy of all counter-cyclical programs: Medi-Cal, the state and federal program that provides health care for the poor.

“In California, the primary catalyst of growth in the Medi-Cal program in recent years has been the economic downturn,” said Anthony Cava of the Department of Health Care Services, which manages the Medi-Cal program.

Medi-Cal is California’s version of the nationally implemented Medicaid program and it provides more than 7.7 million low-income families, children, and elderly, and disabled Californians will health care and other vital human resources. Costs for the program are split by the federal and state governments, with a total price tag of about $53 billion this year.

On the surface, Medi-Cal costs in the state’s general fund appear to have risen by about 40 percent over the past ten years, increasing from about $9 billion in 2000-01 to $12.7 billion this year. That increase was driven by rising health care costs and changes in the rules that made more people eligible for the services.

But even that increase obscures the fact that the federal government, as part of the 2009 stimulus bill, dramatically increased its share of the costs. And that extra federal aid is about to expire, leaving California taxpayers responsible for a larger portion of the costs. Without the cuts adopted as part of this year’s budget negotiations, the state’s costs were projected to rise to $17 billion next year, a 40 percent increase in one year alone.

That shock to the system comes at the same time as the state’s economic problems have led to more unemployment, more poverty and more people dependent on the state for their health care. Meanwhile, the federal health reform bill passed last year envisions another big expansion of the program, albeit one funded largely by the federal government.

“It is tragic that we’re facing this historical downfall when health reform is just around the corner,” said Assemblywoman Holly J. Mitchell, D-Los Angeles.

The passage of the Affordable Care Act by Congress and President Obama in 2010 was a national call for all citizens to receive some form of adequate and affordable health care. It lays out a series of health care requirements for states to fulfill within the following decade.

Among other things, the new law requires that health care programs like Medi-Cal will not only have to expand the health services they provide but that those expanded services be made available to a more diverse population. The federal government then reimburses states like California for most of the costs of implementing the changes required by the law.

“If you take into account all ten years of the first implementation and you pencil it out, the federal government is bearing something like 98 percent of the cost,” said Anthony Wright, Executive Director of Health Access, a statewide health advocacy organization.

But the question of whether or not California can seize those federal funds rests in part on the state’s ability to fund initial improvements to the Medi-Cal system within the next two years before most of the federal requirements take effect.

For example, the Affordable Care Act requires that Medi-Cal be made available to all individuals within 133 percent of the federal poverty line – about $14,500 per person — regardless of whether or not they have children or are disabled. That would add an estimated 2 million people to the Medi-Cal rolls, according to the non-partisan legislative analyst.

California managed to implement this provision ahead of time by requiring counties to provide health services for this particular population. As a result, the state negotiated an agreement with the federal government that should bring an additional $10 billion to California, paid out over the next ten years.

But the federal call for expansion is at odds with the statewide call for frugality. With a $26 billion budget gap to fill, legislators have approved roughly $1.6 billion in cuts to Medi-Cal.

As a result, Medi-Cal recipients will be expected to pay co-payments for hospital and routine doctor’s visits and prescription drugs. They will also face limitations on how many times they can visit a doctor in a year. Doctors, hospitals and clinics that serve Medi-Cal recipients will see a 10 percent decrease in their reimbursement rate.

Funding for Medi-Cal is far-reaching and affects programs administered by state departments outside of the Department of Health Care Services. It directly funds services, such as In-Home Supportive Services, primary, and acute care, and it provides funding for programs operated by other departments, including the Departments of Aging, Developmental Services, and Mental Health.

Because the money is used for so many different programs, the effects of budget cuts are diverse and far-reaching. Not surprisingly, so is the public outcry.

Assemblywoman Mitchell estimates that at least one thousand people came to her sub-committee to testify against proposed cuts during eight hearings spread over two weeks.

“With Medi-Cal, it was a very diverse group,” Mitchell said. “One particularly poignant witness was a woman who was disabled at the hands of her ex husband…she suffered multiple strokes and we she used a motorized wheelchair…these motorized wheelchairs are very heavy and they burn through batteries. With some of these cuts, she won’t be able to get those batteries she needs for her wheelchair.”

Advocates like Wright said cuts like these could jeopardize California’s ability to snag federal health reform dollars.

“Its unfortunate that Medi-Cal is seen as a big item to cut rather than an essential funder of our health care system and as the main way by which the state gets federal dollars back,” said Wright.

But there’s no arguing with an empty bank.

“When there’s going to be major cuts, then health and human services is first in line. (Medi-Cal) is the biggest line item in the budget,” said Wright.

Independent of the reforms required by the new federal law, California is at the shore of significant influx in Medi-Cal enrollment. With a generation of post-WWII baby boomers reaching age 65 this year, the number of elderly Californians newly eligible for Medi-Cal could increase, and that has huge implications for the cost of the program.

“While the largest group of beneficiaries (75%) is families and children, a disproportionate share of Medi-Cal spending (63%) is for seniors and persons with disabilities,” said a 2010 budget report by the LAO.

It costs the state about $2,200 per year to provide care to the typical low-income child on Medi-Cal and $2,600 for his or her parents, according to a recent report by the California Health Care Foundation. But it costs $9,400 for the typical senior and more than $15,000 for a disabled child or adult.

But health department officials and Assemblywoman Mitchell both stated that the state has no choice but to implement budget cuts.

“With growing enrollment and rising costs for providing medical services, including prescription drugs and inpatient and outpatient services, the state must live within its means,” said Cava.

Jennifer Chaussee is a correspondent for the California Health Report at www.healthycal.org

By Brian Joseph of the Orange County Register
For HealthyCal.org

SACRAMENTO– California is the nation’s most populous state, the owner of the world’s eighth largest economy, the home of Silicon Valley and Hollywood, and the global leader in biotechnology. And yet, the fortunes of its state government depend on a small group of people.

Over the past few decades, California’s budget has become reliant on its richest residents. Roughly a quarter of the state’s General Fund revenue comes from the personal income tax of Californians earning $300,000 or more — a group of tax filers that’s smaller than the population of Stockton.

California faces another multi-billion-budget deficit in part because these rich taxpayers are making less money. Today, many of California’s wealthiest residents earn much of their money not from salaries but from the return on investments. When the economy is good and they’re recording capital gains from selling stocks or real estate, their personal income skyrockets. But when the economy is bad — like it is now — those capital gains dry up. And California suffers.

For example, from 2007 to 2008, the most recent years for which tax data is available, Californians earning $300,000 or more saw their tax liability drop by $7.4 billion, according to figures collected by the Franchise Tax Board. That, of course, coincides with the collapse of the housing market and the larger U.S. economy.

“It’s like building your house on a hillside where there’s traditionally mudslides,” said Curt Pringle, the former mayor of Anaheim and speaker of the state Assembly.

Pringle served on the Commission on the 21st Century Economy, a group formed by former Gov. Arnold Schwarzenegger, which was tasked with analyzing the weaknesses in the state’s tax system. The task force determined the that the state’s reliance on capital gains of the rich subjected California’s budget to “increased volatility.”

“As a result of this development,” the task force’s final report said, “in the past ten years California has experienced periods of strong revenue growth followed by nearly symmetrical declines.” The state, in other words, doesn’t know what its revenues are going to be from one year to the next.

California wasn’t always so reliant on the rich. In the 1970s, the sales tax, not the income tax, was the state’s top source of revenue. Unlike the income tax, which is progressive, meaning it hits the wealthy hardest, the sales tax is regressive — it has the biggest relative impact on the lower and middle class, who spend a larger share of their incomes on taxable goods.

But fairness aside, California’s revenue stream was more stable when the tax system was more diverse.

Things began to change in the 1980s when Californians adjusted their purchasing habits. Where once Californians spent a large portion of their income on products, like a mouse traps, they now spend more money on services, like pest control.

The eventual switch from a goods-based economy to a service-based one had a monumental impact on the state’s revenues. California’s sales tax applies to goods. It does not apply to services. When Californians started spending more of their income on services than goods, the state lost sales tax revenue. In fiscal year 1982-83, personal income tax overtook the sales tax as the state’s biggest source of revenue and it’s remained that way ever since.

In fact, the disparity between sales tax revenue and personal income tax revenue was solidified in the last decade with the rise of online shopping sites like Amazon.com. With no physical locations in California, the state is unable to force Amazon to charge state sales tax, even to consumers who clearly live in California. The result is Californians are still buying vacuum cleaners and table sets, but the state is no longer collecting sales tax on those transactions made online.

Also, since at least the 1980s, California has followed a national trend that’s seen wealth become more concentrated among the richest residents. In 1987, residents earning $300,000 or more generated just 12.99 percent of the state’s adjusted gross income and paid 21.42 percent of all personal income taxes. Twenty-one years later, in 2008, residents earning $300,000 or more generated a quarter of all the personal adjusted gross income in California and paid half of all the personal income taxes.

Over that time, the number of Californians earning $300,000 or more rose 522 percent, from 45,124 filers in 1987 to 280,654 in 2008. That’s far more of an increase than would be expected from inflation alone.

Jack Pitney, government professor at Claremont McKenna College, said California got this messy tax system through a series of “uncoordinated decisions” by voters and the State Legislature.

“If somebody was designing a tax system from scratch, it’s a good bet it wouldn’t look like what we have today,” he said, adding, “Practically nothing in California politics is by design.”

Now that we have this system, however, arguments have emerged for maintaining the status quo. In fact, the California Federation of Teachers has proposed a ballot measure to increase the income taxes on the top one percent of wage earners by one percent to help close the budget deficit. Their rationale is that a reliance on the rich is equitable — they have the means to pay. A reliance on the sales tax, which impacts the poor, would be unfair.

The risk in that approach is that it would make the state government even more reliant on the fortunes of the wealthy. The next uptick in the economy would fill the state’s coffers even further, and, if the past is any indication, all of that money would be committed to ongoing programs. When the economy slowed again, the fall would be that much harder.

“When the rich sneeze,” Pitney said, “the rest of us catch a cold.”

By Daniel Weintraub

Gov. Jerry Brown and state lawmakers last month passed what might have been the biggest package of spending cuts in state history, more than $11 billion in reductions to almost every part of the government. But when the next fiscal year ends less than 15 months from now, many of those cuts will have failed to deliver their promised savings.

As a result, even if Brown gets the entire combination of spending cuts and tax increases he is seeking from the Legislature and the voters, a new shortfall will likely emerge unless the economy outperforms projections and the state collects higher tax revenues that expected.

That’s been the pattern in Sacramento for many years. And while Brown appears to have tried harder than his predecessors to rely on realistic projections, the savings expected from many of the spending cuts he has embraced appear to be overly optimistic.

For evidence, look no further than the brand new contracts the Brown Administration has just negotiated with many of its workers. The budget package Brown is piecing together relies in part on a savings of 10 percent from these contracts. But an independent analysis of the deals suggests they will save far less than that next year and will probably increase state costs in the long run.

The non-partisan Legislative Analyst examined the proposed contracts for public safety workers, engineers and scientists. The safety workers’ deal would save less than 3 percent next year, the analysis said, while the two other contracts might save 6 percent. That’s far less than the budget projected, but even those lower savings might be optimistic.

One reason is that all three deals end the three-day-per-month furloughs imposed by former Gov. Arnold Schwarzenegger and replace them with one floating unpaid day off per month for these employees. In his projected savings, Brown has counted the furloughs already taken this year. But by ending the program, his new contracts will actually cost the state more money between now and June 30 before any savings start to accrue.

And while the agreements would require the employees to contribute more toward their pensions, workers would also get more time off, including two “professional development days” that are in reality the same as vacation, used at the full discretion of the employee for any reason.

Brown assumes that these days cost the state nothing, but as the analyst points out, in some cases the time off will drive up overtime costs as other workers are pulled in to cover shifts that cannot go vacant. In other cases, employees will use their time off, paid or unpaid, instead of vacation, and then cash out their vacation days when they leave state service, and this will be a cost to the taxpayers. Finally, all three contracts include a 3 percent pay raise starting in 2013, adding still more costs in the future.

Because these contracts have not achieved the savings projected for them just last month, the final two deals still pending would have to cut 11 percent from labor costs to give the state the overall savings projected in the budget. Always diplomatic, the analyst’s office said it had “serious doubts” that those savings would be achieved.

Many other cuts included in the budget are no less problematic.

Brown, for example, signed a bill that requires recipients of in-home care to get a doctor’s certification that they would be forced into a nursing home without the services they get from the state. The new requirement is expected to eliminate in-home help for 43,000 people, saving the state $120 million next year.

But once again the state’s legislative analyst suggests that those savings are probably overstated, for a number of reasons. The biggest is an overarching fact: it is impossible to know how doctors will handle these requests, how strict they will be and how they will interpret any regulations and definitions intended to guide their evaluations.

Even if the doctors are as strict as the state hopes, however, many of the details within the proposal still pose problems for accurately estimating any savings to the state.

For one thing, doctors might charge recipients for the visit required to certify their disability, and then bill the state Medi-Cal program for that cost, wiping out part of the saving achieved by eliminating care. Also, if developmentally disabled recipients lose services because of this provision, costs might increase elsewhere in the budget because other laws entitle some of those people to help from the state to live independently and outside of institutions.

Another problem: the estimate of $120 million in savings assumes that the people who lose their services have been receiving the average number of hours of in-home help. But because those people who lose their services would be, by definition, more able to care for themselves, it is likely that they have been receiving less than the average number of hours of help, so eliminating that service will save the state less than projected.

One last detail: tracking who has received a doctor’s certification will be an administrative headache with costs of its own, including changes to the state’s computer system. Those costs have not been factored in.

These kinds of potential problems can be found in many of the hundreds of individual cuts approved by the Legislature.

In the Medi-Cal program, the Legislature approved what it called a “soft cap” on doctor visits, limiting recipients to seven visits per year. This is supposed to save $44 million next year. The catch is that the doctors themselves can certify that a patient needs more than 7 visits, for any of a number of reasons. One of those reasons is that the extra doctor visits are needed to “prevent a disruption in ongoing medical therapy,” which would seem to cover a wide range of potential circumstances.

In another part of Medi-Cal, Brown and the Legislature are counting on saving $2 million by ending coverage of over-the-counter cold medications. But this could drive some patients to seek prescriptions for stronger drugs instead, driving up costs in doctor visits and pharmaceutical costs.

Those potential shortfalls pale in comparison, however, to the projected savings of hundreds of millions of dollars next year by reducing reimbursements to doctors, clinics and hospitals by up to 10 percent.

Although California already has some of the lowest reimbursement rates in the nation, the state has tried to cut them further in the past, only to be blocked by the courts and the federal government. The US Supreme Court has a case on this issue pending before it now.

With those potential obstacles, it is very unlikely that the savings projected will be achieved next year.

The result will be spending on health care that is far higher than projected in the budget. And in all likelihood, a new deficit a year from now.

The budget bills Gov. Jerry Brown signed last month include hundreds of millions of dollars in projected cuts to services for the aged. These include cuts in in-home care, adult day health care, Medi-Cal and SSI-SSP grants. The SCAN Foundation has done a nice job pulling all those provisions together into one, easy-to-follow fact sheet. You can download it by clicking here.

By Daniel Weintraub

When Jerry Brown was running for governor last year, he vowed to break the partisan deadlock that had prevented legislators from fixing California’s yearslong budget mess. With his decades of experience in politics, including two previous terms as governor, Brown said he had the savvy it took to bring Republicans and Democrats together to find a solution.

But while candidate Brown warned that his opponent – political novice and former eBay executive Meg Whitman – would require “on the job training,” all of his experience has yet to produce the results he promised. This week Brown announced in frustration that he had abandoned negotiations with Republicans aimed at calling a special election in June to ask voters to extend $11 billion in temporary taxes for another five years.

Although Democrats have the power to pass a budget on their own, with just a simple majority vote, raising taxes or going to the ballot would require a two-thirds majority, so they need to persuade at least a handful of Republicans to go along with their plan.

“The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes, and I believe it is in the best interest of California,” Brown said in statement released by his office. “Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people. Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever changing list of collateral demands.”

Republicans, naturally, see things differently. They believe Brown and his fellow Democrats are blocking passage of the budget by refusing to negotiate with Republicans in good faith. Republicans say the Democrats are too wedded to the state’s public employee unions to act independently on measures that might cut benefits to state and local government workers.

Those opposing views are the same talking points that have dominated Capitol politics for years. And they still rule the day despite a concerted effort by Brown to change the culture and, for a time, the tone of the debate.

Since taking office he has held several forums and face-to-face meetings around the state with government officials, business and labor leaders and other citizens, explaining the scope of the problem and outlining potential solutions.

Inside the Capitol he has met with legislators individually, in small groups and with their party caucuses. Shedding the trappings of the office that his predecessors have insisted upon, Brown has met with legislators in their own offices and elsewhere, often travelling with little security and without the armies of aides upon which other governors have relied.

During one late-night budget vote in the Assembly, Brown set up shop in a small office near the chambers, meeting with rank-and-file legislators to cajole them to vote for the package that he and legislative leaders had agreed upon.

And Brown did achieve part of a solution. On mostly party-line votes, Democrats approved more than $10 billion in budget cuts and fund shifts to address part of what has been defined as a $26 billion shortfall over the next 15 months. Brown convinced his fellow Democrats in the Legislature to vote for deep cuts in health programs, public assistance grants and higher education, hoping that doing so would entice Republicans into putting the tax extensions on the ballot.

But so far that has not happened, and the clock is ticking toward the June 15 deadline for passing a budget and the July 1 start of the new fiscal year. Without those tax extensions, the Democrats will be on the spot to pass the rest of the budget with cuts alone, at least until they can come up with an alternative way to get their tax measure on the ballot.

A cuts-only budget would likely result in deep reductions for the kindergarten-through-12th grade schools, which so far have been largely protected from the latest rounds of cuts. Universities, which are among the few programs unprotected by federal or court mandates, would also be vulnerable to additional cuts, as would local governments.

Republican legislators last week produced a list of 53 demands they were making in negotiations over the tax package, but it is clear that their top priorities are cuts in public employee pensions, a spending limit and regulatory relief for businesses.

Brown said he was willing to deal on those issues, but the differences between him and the Republicans remained significant.

On pensions, for example, Republicans want to put before the voters a measure that would roll back benefits, increase employee contributions to the pension fund and limit the taxpayer’s liability for employees’ retirement. Brown and his fellow Democrats appear willing only to enact reforms aimed at perceived abuses, such as employees “spiking” their pensions with inflated final-year salaries, or government executives pocketing pensions in the hundreds of thousands of dollars, sometimes worth more than they were paid while working.

On a spending limit, Republicans want a cap tied to the cost of living and population growth, with perhaps some easing once the state pays off its debts and builds a reserve equal to 10 percent of the general fund. Some Democrats have suggested a cap that would expire when the temporary tax increases expire in five years. They note that with state revenues having cratered in recent years, programs are starved of funding at the moment, so a spending cap based on this year’s budget would leave services permanently stretched thin.

On regulations, Republicans are seeking changes that would subject new regulations and legislation to stricter cost-benefit analyses, exempt some commercial projects from full environmental review if they are in already-developed urban areas, and prevent last-minute environmental objections from tying up proposed development projects for months or even years. Democrats have not agreed to any of these proposals.

Brown called off the talks, he said, because Republicans were demanding too much, and asking for too many things that either were unrelated to the budget or would make the shortfall worse, including a corporate tax break that costs the state $1 billion a year.

The governor has not said what he will do next, but his options are limited. He could try to place the tax extensions on the ballot without the Republican votes needed for a two-thirds majority, but that approach is legally questionable. He could try to gather signatures to put the taxes before the people via a ballot initiative, but if he does that, the temporary taxes will expire before the vote, so he would be asking for tax increases rather than merely preserving the status quo. That’s a much tougher sell.

In the meantime, Democrats face a June 15 deadline for passing a budget. Thanks to Proposition 25, a ballot measure Democrats backed last year that gave them the power to pass a budget (but not raise taxes) with a simple majority, legislators will also forfeit their pay for every day after June 15 that they don’t pass a budget.

The catch is that the budget they pass does not have to be enacted to meet the new standard. Simply sending a plan to the governor is good enough to keep their pay and benefits flowing. So the newly significant June 15 deadline might not be enough to break the stalemate.

For now, at least, even a governor with 40 years of political experience, including previous terms as governor, secretary of state, attorney general and mayor of Oakland, cannot seem to overcome the polarization that, with a few exceptions, has gripped the Capitol for decades.

Daniel Weintraub is editor of the California Health Report at www.healthycal.org