Successful Voter-Approved Program Steps In To Bail Out Failed State

On May 19, voters were asked to divert money from First Five programs to pay for General Fund expenditures. The argument was that First Five had a reserve that was just "sitting around" and they should give up some of that money, earmarked for children's programs, to pay for the budget. At Calitics, we called this the "if it ain't broke, break it" proposition. First Five, financed by a tax on cigarette sales, was well-funded and able to make multi-year program projections, so that the programs started up were not in perpetual fear of being dropped.

One of the values of First Five is that they can seek out other programs affecting children and contribute to them, in keeping with their mandate. And that is what they have voluntarily agreed to do with respect to the Healthy Families program, California's version of S-CHIP.

Meeting in Sacramento this afternoon, the First 5 California Children and Families Commission agreed to help the Healthy Families Program, which faces a $90 million General Fund shortfall in 2009-10. But the Commission declined to commit to a specific level of financial assistance. As a result, it appears all but certain that the enrollment freeze approved last month by the Managed Risk Medical Insurance Board, which oversees Healthy Families, will take effect on Friday, July 17.

In a resolution, the First 5 Commission committed “to join with like-minded public and private partners, including but not limited to health plans and philanthropic organizations, to provide financial assistance in Fiscal Year 2009-10 to the extent practicable and feasible…to ensure young children have access to affordable health insurance coverage.” This commitment, however, “is contingent upon the availability of funds in the applicable First 5 California accounts.”

I wish that First Five would have chosen a specific funding level, which could have rolled back the enrollment freeze. Still, they are making a commitment to help provide health insurance to needy children, one they couldn't have made if the state clawed back some of their money in the May 19 election. This way, First Five can target the money and keep in line with what the voters asked from them - to use their revenue to provide needed services for children. The state could have used that money for anything if they skimmed it off the top.

People often wail about ballot-box budgeting and the broken initiative process in the state, and to an extent I agree with them. But First Five is an example of GOOD ballot-box budgeting. It has a dedicated funding source, it's well-managed and well-capitalized, and it has the ability to make contingencies. If the structure of state government fails to allow increased revenue to pay for needed services, it's perfectly logical to go outside that process and produce dedicated sources of funding. It shows the virtue of a balanced approach. I don't necessarily want the ballot to do all of Sacramento's work for it, but the broken system of government sometimes leaves no choice.