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A Bad Time for Budget Cuts to California’s Aged, Disabled, Poor, and Uninsured

The latest numbers are just in from the United States Census Bureau. According to analyses from the California Budget Project (CBP) they show that for low and middle income Californians there has been a decline in the real (inflation adjusted) household income. A separate analysis by Health Access California shows that more Californians are uninsured for health care—a trend that is contrary to that of the United States as a whole.


Today's data raises important policy and value questions as the California legislature is at an impasse over our state’s budget and some are proposing balancing it by making cuts in health care and programs designed to help those who are in distress.

According to the California Budget Project’s number crunching in “2007 Incomes Declined, Poverty Increased”, today’s data shows that:

  • California's inflation-adjusted median household income - the income of the household exactly at the middle of the distribution - fell to $55,734 in 2007, down by $1,154 (2.0 percent) from the previous year and down by $634 (1.1 percent) from its 2000 level, after adjusting for inflation. However, these declines are not statistically significant.
  • Income trends in California contrast with those nationally. The inflation-adjusted US median household income increased by $665 (1.3 percent) between 2006 and 2007, reaching $50,233. However, the national median household income remained $324 (0.6 percent) below its 2000 level, after adjusting for inflation.
  • Nearly 4.6 million Californians (12.7 percent) had incomes below the federal poverty line in 2007, up from approximately 4.4 million (12.2 percent) in 2006; however, this increase is not statistically significant. California's 2007 poverty rate was the same as in 2000.
  • California's 2007 poverty rate was 0.2 of a percentage point higher than the national rate - a reversal from 2006, when the share of Californians with incomes below the poverty line fell below that of the US as a whole for the first time since the late 1980s.
  • The share of California's children living in families with incomes below the poverty line declined slightly from 18.1 percent in 2006 to 17.9 percent in 2007; however, this decline is not statistically significant. California's 2007 child poverty rate was 1.3 percentage points below its 2000 level.

The CBP also says that more recent data suggest that low- and middle-income Californians will continue to lose ground in 2008. They note that California's unemployment rate has increased steadily over the past 20 months, reaching 7.3 percent in July - its highest level in 12 years and that as the job market weakens, more Californians are relying on the state's income support and related programs to help make ends meet. In particular, they mention the number of California families enrolled in the CalWORKs, Food Stamps, and Healthy Families programs which have increased considerably during the last year.

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"What low- and middle-income Californians gained in 2006, they began to lose in 2007, and they're likely to continue to lose in 2008," said Alissa Anderson, deputy director of the CBP. "The current downturn points to the importance of having a strong safety net in place for families to rely on during tough economic times."

Health Access California, the statewide health care consumer advocacy coalition, reports that the data shows that the number of Californians who find themselves without health coverage increased last year. They say: “Nationally, significant declines in private coverage--in both employer-based and individually-purchased plans--were offset by public programs picking up coverage. But unlike the nation as a whole, which has a small decrease in uninsured, the California's rate of uninsured inched up to 18.6%.”

According to Anthony Wright, Executive Director of Health Access, "Californians are more likely to be uninsured than residents of all but six states. Our public programs are valiantly trying to pick up the slack from the erosion of private coverage by employers and individuals. But now this budget crisis threatens to make severe cuts in the public programs that are the last hope for so many Californians."

Wright said, "We need to be expanding these successful public coverage programs now, not cutting them at exactly the time that Californians need them most. The proposed cuts could leave as many as one million more Californians uninsured, to devastating effect to the health system on which we all rely."

He concluded,"California should be a leader, not a laggard. We see states that have made reforms, from Massachusetts to Hawaii, with dramatically lower uninsured rates, as a direct result of their distinct state policies, some new, some in place for decades. We know how to solve these problem, if the political will is there."

Frank Russo

Wright identifies the six states with a higher percentage of uninsured residets than California as Texas, New Mexico, Florida, Arizona, Louisiana, and Mississippi.

By Frank Russo, Publisher, The California Progress Report

Originally published on The California Progress Report. Republished with permission.

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