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Gov. Arnold Schwarzenegger and legislative Democrats are backing an $811 million cut to prison medical costs in 2010-11, contained in a bill the Legislature sent the governor Monday. Democrats have included that cut as part of their $5 billion budget solution.

The $811 million cut wasn't based on California's needs or sophisticated analysis. It comes from applying New York's per-inmate cost of $5,757 to California's prison population, which the governor considers more appropriate than California's current cost of about $11,000 per inmate.

But the cut is not as severe as it might first seem. Schwarzenegger in his budget also proposed increasing the prison medical budget by $519.1 million this fiscal year and adding $532.2 million in 2010-11, a total of $1.05 billion from now until June 2011. The Legislature will wait until after the governor's May revision to decide exactly how much to allocate to corrections and other major portions of the budget.

The governor's proposed budget increases came from conversations with the federal receiver in charge of prison medical care, J. Clark Kelso, according to the Department of Finance. The receiver wants to use the additional money for nursing resources, an electronic medical records system and an improved information technology network to take advantage of long-distance medical care.

As with any budget section, the Department of Finance first determines the state's workload before proposing reductions. So in this case, Finance determined that prison medical care requires $1.05 billion more through June 2011. It then proposed the $811 million cut in 2010-11. The overall impact from now until June 2011 is that prison health care would actually get about $240 million more than previously anticipated.

Kelso said at a budget hearing this month he is supportive of the governor's proposed budget. He committed to trying to find more ways to reduce costs through managed care and relying on cost-efficient technologies.

In the end, the budget for the prison receiver remains a squishy budget item. If the receiver has to spend more money than what has been allocated, he can do so unless the state challenges the federal judiciary. Should the receiver spend more money than lawmakers and the governor allocate in the budget, state leaders likely won't deal with it until they confront the 2011-12 deficit next year.


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