California governor threatens to veto budget, continuing impasse

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California Gov. Arnold Schwarzenegger (R) said he plans to nix a $145 billion budget proposal on Friday. If passed, the proposal would end the longest budget impasse in the state's history and restore many benefits and provider pay rates to the Medi-Cal program.

The Medi-Cal program is California's version of Medicaid and provides 65% to 70% of the funding for nursing homes and facilities for the developmentally disabled. Funding to the program has been shut off for nearly three months while the legislature attempted to hammer out a budget, putting serious financial strain on all facility owners (McKnight's, 8/19). The Legislature approved the budget earlier this week on the 78th day of the fiscal year—the latest date the Legislature had ever passed a spending plan. Schwarzenegger objects to the increase in program spending contained in the new budget proposal.

Some view the governor's threats as a mere gesture. A two-thirds majority of the Legislature was needed to approve the budget and send it to the governor. That is the same majority needed to over-ride a veto if the governor sends it back, according to the Bureau of National Affairs.