MOORLACH UPDATE — Half-Baked Health Plan — June 3, 2017

Some editorial boards can see right through a gambit. The San Gabriel Valley Tribune‘s Editorial Board lays it out in the piece below (also see MOORLACH UPDATE — Single-Payer — June 2, 2017 june 2, 2017 johnmoorlach and MOORLACH UPDATE — Budget and House of Origin Deadlines — June 1, 2017 june 1, 2017 john moorlach).

The editorial board is demanding a thorough accounting. I’ve given you a full accounting of the state before, but let me repeat myself. There is a trend with which you can judge the state’s history of managing its finances. It is found in the Basic Financial Statements on the Balance Sheet. It is the Unrestricted Net Assets (or Deficit) for Governmental Activities of the State of California, from its Comprehensive Annual Financial Reports (available on the State Controller’s website at http://www.sco.ca.gov/ard_state_cafr.html) for the years 1999 to 2016:

The State Controller has decided against including the unfunded retiree medical liability on the Balance Sheet, but $168.5 billion plus $76.7 billion puts the state at an actual deficit of $245.2 billion.

But, that’s not all. Although the University of California system is autonomous, under the current administration, it has been growing its Unrestricted Net Deficit to more than $11 billion:

The California State University system is also in a deficit situation of more than $3 billion:

California’s failed leadership has given the taxpayers the largest Unrestricted Net Deficit in the nation. Combined, it is more than a quarter-trillion-dollars!!

California is not flush. It is like someone who has a massive credit card debt and wants to purchase an expensive luxury car. But, California is also trying to do it on the fly. No architect. No successful model. None of the three doctors in the Senate participating in its design. Consequently, one can only conclude that it is a stunt. But, too many good constituents believe this is a legitimate proposal and have been calling my offices asking me to support SB 562. To them, I apologize. I do not vote for pigs in a poke.

I’m still in Sacramento this Saturday. The Budget Conference Committee met into the late evening yesterday and are meeting all day today. Consequently, I will not be able to board the last available flight tonight to the OC. I will miss some wonderful traditions on Sunday, including the Costa Mesa Fish Fry and the Balboa Island Parade (my favorite). But, I’m having fun providing good fiscal counsel from the minority party’s perspective.

Half-baked single-payer health plan amounts to political stunt

By The Editorial Board, The San Gabriel Valley Tribune

http://www.sgvtribune.com/article/LC/20170602/LOCAL1/170609888

On Thursday, the California state Senate made the bold move of voting to create a single-payer health system without having any idea of how to pay for it.

Ostensibly spurred by concerns over the future of the Affordable Care Act at the federal level, Senate Bill 562 by Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, would create a single-payer system which would cover health expenses for every resident in California.

Considering the magnitude of such a proposal, the very least that is owed is a thorough accounting of how exactly such a program would be paid for. After all, according to estimates from a legislative analysis provided to the Senate Appropriations Committee on May 22, the proposal is anticipated to cost $400 billion per year, more than double the state budget. While half of that could be covered by existing federal, state and local funding, the other $200 billion would have to be covered by new tax revenues.

Even those figures could be off, because as the legislative analysis explained, “there is tremendous uncertainty in how such a system would be developed, how the transition to the new system would occur and how participants in the new system would behave.”

But rather than provide the sort of thorough vetting such a massive overhaul demands, the bill’s authors instead pushed for a vote on a half-baked proposal. “There’s no funding mechanism within this bill because we want to further study and ensure that this becomes a program that is viable,” Lara told colleagues on the Senate floor, seemingly unaware of the implications of what he had just said.

The absence of a complete proposal led many lawmakers who are otherwise sympathetic to its aims to either vote against it or abstain.

“Rather than rushing to pass it before it’s complete, we should keep it here and finish the work,” said Sen. Steve Glazer, D-Contra Costa, who voted against the bill.

Putting it more bluntly was Sen. Ben Hueso, D-San Diego, who, despite supporting the concept of single-payer health care, refused to support the bill. “This is the Senate kicking the can down the road to the Assembly and asking the Assembly to fill in all of the blanks,” he said.

Whatever the merits of single-payer health care in the abstract, what the Senate voted on was a proposal lacking critical details without which a responsible vote in favor is impossible. The prospect of an unvetted bill with hundreds of billions of dollars in proposed annual costs becomes even less sensible in light of the state’s inability to balance the budget it already has.

“Nearly $250 billion this state is upside down according to its own audited financial statements,” said Sen. John Moorlach, R-Costa Mesa, citing the state’s massive debts and unfunded liabilities. “So now we want to take on single-payer health care, which has big numbers too.”

As Sen. Jeff Stone, R-Temecula, pointed out, California is already the highest-taxed state in the country. What SB 562 guarantees is the placing of greater burdens on taxpayers, employers and medical professionals. “If you want California to be competitive in the job market, which is very challenging these days, you’ll vote no on this bill,” Stone said.

Rather than voting down a clearly deficient bill, the Senate voted 23-14 in favor of it. This is not how a responsible government operates. This is a glorified political stunt which, if it proceeds with the same thoughtlessness shown to date, could do real harm to the state of California.

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