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Economy

California seeks to delay $25 healthcare minimum wage to ward off budget crisis, among budget cut proposals

2024-05-29

[JustTheNews] California Gov. Gavin Newsom is seeking to delay a healthcare worker minimum wage increase that will cost the state $4 billion this year alone as the state faces a budget crisis.

Among Newsom’s proposals to cut the deficit from $73 billion to $7 billion are tying the state’s healthcare minimum wage increases, which would hike the wage to $23 per hour this June cost the state $4 billion in just the first year, to the financial position of the state’s general fund and exempt state facilities. The state’s minimum wage is $16 per hour, which means the increase would raise base labor costs by 44%.

“The Administration is … to add an annual 'trigger' to make the minimum wage increases subject to General Fund revenue availability, clarify the exemption for state facilities, and make other implementation clarifications,” wrote the governor in his January budget proposal.

State Sen. Maria Durazo, D-Los Angeles, author of the state’s $25 per hour healthcare minimum wage, which would be fully phased in by 2026, submitted an “urgent” bill to delay the wage from taking effect for another month as negotiations on the wage’s implementation continue.

The law increases the minimum wage for employees at employers with more than 10,000 full time or equivalent employees, or facilities in counties with more than 5 million residents, and applies to any employee in the health sector, including “food service staff” and “gift shop staff.”

California recently adopted a $20 per hour minimum wage for the fast food sector, a move that small businesses say effectively creates a new minimum wage for them as well given that they are in competition with fast food companies for the same pool of minimum wage workers. The $23 per hour, and ultimately $25 per hour, healthcare minimum wage would likely bring up labor costs for small businesses further, says National Federation of Independent Business California Director John Kabateck.

California may no longer provide in-home assistants to illegal immigrants
[JustTheNews] With state leaders aiming to expand Medi-Cal to all Californians, system beneficiaries are already struggling to find doctors to treat them as the state faces doctor and care provider shortages.

California health and labor advocates pushed back against California Gov. Gavin Newsom’s proposal to cut in-home nursing and care assistance for illegal immigrants from this year’s budget, which has cut an estimated $73 billion deficit to $7 billion.

California's In-Home Supportive Services, which provides in-home personal care and assistance for elderly and disabled individuals with 283 hours per month of assistance with tasks such as bathing, dressing, housework, and meal preparation.

To be fair, that’s much cheaper than moving them to a skilled nursing facility, which I understand charge about $10,000/month for the same level of care.

The governor proposed spending $9 billion on IHHS for fiscal year 2024-2025, a $1 billion increase from the year prior. The nonpartisan Legislative Analyst’s Office, a state-funded, non-partisan agency, notes beneficiaries are “responsible for hiring and supervising a paid IHSS provider — oftentimes a family member or relative” at an estimated $17.95 per hour.

While Medi-Cal was expanded to cover all illegal immigrants starting in January of this year, the governor’s proposed cuts would maintain said individuals’ access to most Medi-Cal services but drop IHHS coverage provided through Medi-Cal.

“This proposal is both harmful and xenophobic, potentially pushing immigrant families deeper into poverty,” wrote the left-leaning California Budget and Policy Center in opposition to the governor’s proposal. “These cuts could also lead to increased state spending on nursing home care in the long run.”

The California Department of Social Services, which administers IHHS, told the Los Angeles Times just 3,000 illegal immigrants have been authorized for IHHS, and that 1,500 are receiving IHHS program benefits.

With state leaders aiming to expand Medi-Cal to all Californians, system beneficiaries are already struggling to find doctors to treat them as the state faces doctor and care provider shortages.

California’s expansion of Medi-Cal coverage to all illegal immigrants between 26 and 50 years old is expected to add 700,000 beneficiaries at a cost of $3.4 billion per year. Newsom has vowed to fund the program expansion despite the state’s budget crisis.

“We also want to maintain our health care expansion across the board, regardless of ability to pay, regardless of pre-existing conditions and your immigration status,” Newsom said in his revised May budget proposal.

With one in four Californians expected to be 60 or older by 2030, costs for IHHS and other programs for elderly Californians are expected to increase as relatively fewer workers are paying taxes to fund these programs. Experts say this may not be sustainable, especially with declining births leading to fewer future workers.

California's Newsom attacked from his left in teachers union ad blitz: 'Monumental crisis'
[FoxNews] Despite Gov. Gavin Newsom's reversal on cutting public school funding and reaching an agreement with the nation's most influential teachers union, the union will continue airing an attack ad against him until the deal is passed in the legislature.

The California Teacher's Association (CTA), the state's powerful progressive teachers union, launched an ad against the liberal governor last week after Newsom proposed slashing funding for public schools by $12 billion over the next few years to narrow the state's budget shortfall.

"California classrooms face a monumental crisis, tens of billions of dollars in cuts to public education over the next three years, bigger class sizes, thousands of teachers laid off, essential resources like counselors, nurses and special education aides, gone," the narrator says in the 30-second ad.

Posted by:Skidmark

#4 'To not fix prices would be racist.'

We have a pool on that timeline yet?

Posted by: swksvolFF 2024-05-29 12:46

#3 A lot of dentists will be working solo.

Posted by: Super Hose 2024-05-29 11:55

#2

Even Liberal-Socialist Democrats can only give so much of other people's money, before it has none to pay themselves.

Posted by: NN2N1 2024-05-29 08:47

#1 Come on, raise it to $50 a hour. Soviet central planning worked so well before.

Posted by: Procopius2k 2024-05-29 08:27

00:00