Brown's budget relies on help from Supreme Court, federal officials

McClatchy NewspapersJanuary 11, 2011 

WASHINGTON — Supreme Court justices on Friday will quietly pass through California's budget fray. Other federal officials could soon follow.

Gov. Jerry Brown's plans for closing an estimated $25 billion budget gap looks in part to federal actions outside of Sacramento. Some may be subject to political influence, while others are more a roll of the dice.

On Friday, for instance, the nine Supreme Court justices will meet behind closed doors in a conference to decide which appeals will be heard and which will be dropped. One involves California’s efforts to cut Medi-Cal reimbursement payments, a proposal that Brown relies upon in his budget proposal to save $9.5 million this year and a whopping $709 million in the fiscal year that begins July 1.

"This proposal assumes the state prevails in pending rate litigation," the Brown budget document states.

Victory, though, is far from guaranteed, on the legal as well as political fronts.

"It's all a charade," Lynn S. Carman, an attorney with the Novato-based Medicaid Defense Fund, said of the governor's Supreme Court hopes in an interview Tuesday.

First, at least four justices would have to agree to hear the case now called Maxwell-Jolly v. California Pharmacists Association. A decision on whether the court will hear the case is likely to be made public next Tuesday.

Even if the case is heard, the state would only reap Brown's anticipated budget savings if California won an argument that it lost last year before the 9th U.S. Circuit Court of Appeals. If the state loses in court, it might have to take additional steps if it wants to pursue the reimbursement cuts.

In the March 2010 ruling, a three-judge appellate panel upheld a trial judge's injunction that blocked proposed reimbursement reductions.

"The state failed to study the effect of the ... rate reduction on the statutory factors of efficiency, economy, quality, and access to care prior to implementing the rate reductions," the appellate panel concluded.

As a general rule, the odds are against any petition being taken up by the Supreme Court. Each year, the court receives upward of 8,000 petitions but generally only hears about 80.

"They're not going to win," said Carman, who is one of the attorneys challenging California in the reimbursement case. "They've lost every time they've try to do this."

Still, in some ways, Brown is more politically realistic than his predecessor, Gov. Arnold Schwarzenegger, who briefly dubbed himself the "Collectinator" for his putative ability to muscle more funds from Uncle Sam. Brown's budget, for instance, does not explicitly anticipate obtaining more federal help in incarcerating illegal immigrants.

In other arenas, Brown would need federal victories to secure additional savings anticipated in his 266-page budget summary.

The state budget, for instance, anticipates millions of dollars in additional savings from proposed changes to Medi-Cal services, such as limiting doctor's visits to 10 a year. These changes would require federal approval.

The budget also:

- Anticipates $1.1 million in savings on the state's ambitious high-speed rail project through what the budget document calls "inter-agency agreements with the (federal) Department of Justice and the (state) Department of General Services."

- Anticipates an additional $84 million from a new Small Business Jobs and Credit Act program signed by President Barack Obama in September.

- Relies upon "pursuing other enhanced federal funding opportunities" to provide millions of dollars for the Department of Developmental Services.

California will be seeking the federal aid with a smaller cadre of state lobbyists. As part of his overall budget cuts, Brown is reducing the state's Washington office. There will now reportedly be two D.C.-based lobbyists, down from seven last year.

McClatchy Newspapers 2010

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