Unbalanced priority and improper budget allocation, a new state budget allocation for Hollywood tax credits far outweigh funding for the state’s distressed hospitals.

Tax credits for Hollywood in the new state budget far outpace money allocated for the state’s distressed hospitals (Source: GV Wire)

New State Budget Allocations

In a news report from GV Wire, three significant public service coalitions launched extensive lobbying campaigns in the months before last week’s passage of a new state budget to secure billions of dollars in more state budget allocation. Even though all three argued that increased state budget allocation was necessary to maintain their services, Capitol politicians were struggling to close a $30 billion budget shortfall, making their arguments difficult to sell.

The final budget allocation arrangement provides $5.1 billion over four years with the freedom to utilize the money for either building or operations. Initially, Newsom dismissed appeals for transit, but with help from sympathetic legislators, particularly those from the transit-heavy San Francisco Bay Area.

According to a study cited by the California Hospital Association, a fifth of California’s hospitals face closure, in part because Medicare, the federal health insurance program for the elderly, and Medi-Cal, the federal-state health care program for the poor, do not adequately compensate providers for their services.

According to the analysis, hospital care expenses in California rose by $23.4 billion in 2022 over pre-pandemic levels, causing $8.5 billion in losses in addition to the $12 billion in losses from the pandemic. The proposed budget offers some relief to healthcare providers by taxing healthcare organizations, using the money raised to qualify for greater federal funding, and increasing budget allocation for the compensation for treating medical members. A $150 million fund to assist hospitals in need is also included in the budget allocation.

County and city authorities frequently disagree on how to handle the state’s homelessness epidemic. Although most encampments are established on city streets, counties are in charge of providing health and social services.

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Budget Allocation by Newsom Draws Criticism

However, they concur that making long-term financial commitments is necessary to deliver successful services. Even though Newsom frequently criticizes regional initiatives, he has only offered annual budget allotments. He persisted in that mindset, and the budget allocation for another year reaches $1 billion, drawing harsh condemnation from local politicians.

Despite having one of the biggest economies in the world, California has the worst percentage of homelessness in the nation, according to a statement from Carolyn Coleman, executive director of the League of California Cities. “Therefore, it defies logic that the budget allocation once again omits ongoing support to account for the severity of this catastrophe.

The governor and the Legislature agree that there is a crisis, and city officials across the state are at the forefront. However, this budget allocation gives short-term fixes more weight than long-term, permanent answers. The Californians who most need assistance will suffer as a result of this short-sighted strategy, which will further exacerbate the state’s worsening housing and homelessness crisis.

Equally harsh was the California State Association of Counties’ Rachael Serrao, who stated that “all levels of government simply cannot address this complex issue without ongoing funding to plan and support an effective system.”

While local governments, hospitals, and transit systems pleaded for more funding, Newsom and legislators eagerly increased long-term budget allocation for film and television production in Southern California. The tax credits total $330 million a year, which is twice the budget’s safety net for struggling hospitals.

Perhaps the priorities are off?

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