Saying his actions will help maintain the state's balanced budget, Gov. Jerry Brown vetoed a bill to give lawmakers more leverage in making emergency budget cuts and signed two bills extending revenue-producing charges on the health-care industry.
"The two bills I signed today provide critical revenues that will keep our budget balanced, and I think the Legislature -- both Republicans and Democrats -- for working together to pass them," Brown said in a written statement.
"I am vetoing a third bill that would have undermined investor confidence in California by altering the budget's mechanism for automatic trigger cuts," the governor added.
The two bills signed by Brown were Senate Bill 335, to extend the state's existing Quality Assurance Fee on private acute care hospitals for 30 months; and Assembly Bill X1 21, to extend a tax on Medi-Cal managed health care plans for one year.
Brown vetoed Senate Bill X1 6, which would have altered the mechanism for automatic budget cuts if state revenue falls below projections this year. The state budget outlines specific emergency cuts to be made. The bill vetoed by Brown would have required legislators to be consulted on alternatives.
"This year - for the first time in a long time - we passed a no-gimmicks, on-time budget," Brown said in his veto message. "Why would we undermine the plan that has earned widespread respect and helped stabilize California's finances?"
By creating uncertainty about budget cuts, the bill could have affected the state's ability to sell bonds or revenue anticipation notes, Brown noted.
The bill vetoed by Brown would not have eliminated or altered any programs currently on the chopping block if emergency cuts are needed, but it would have required state finance officials to discuss alternatives with legislative leaders within a 10-day period before cuts are imposed.
Under current law, state finance officials must determine in December whether California is on track to receive $4 billion more in revenue over the 2011-12 fiscal year. If not, the budget requires the state to impose as much as $2.5 billion in cuts to K-12 schools, higher education, public safety and social services.
The two revenue-producing measures signed by Brown passed each house of the Legislature by a two-thirds margin, with a significant number of Republicans joining with Democrats in support.
Extending the tax on Medi-Cal managed care plans -- 2.35 percent of gross premiums -- is meant to help bankroll the state's Healthy Families Program, which provides health, dental and vision coverage to low-income children and teens who do not have insurance and do not qualify for free health care. Supporters say the extension will benefit 300,000 youth.
Brown pegged the bill's bottom line at $200 million in new revenue, which will generate an additional $300 million in federal funds and save California's general fund $103 million this year.
The second revenue-raising measure signed Friday, SB 335, is designed to provide additional funds to hospitals and protect health-care services for children and low-income or vulnerable patients.
The 30-month fee extension will raise $7 billion in revenue, generating an additional $6.1 billion in new federal funds and saving the state's general fund more than $850 million, Brown said.
"These bills represent a solid partnership between private business and the state to fund vital health-care services while continuing to live within our means during these difficult economic times," Brown said.
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