County Faces Cuts in State Health Funds

Times Staff Writer

If Gov. George Deukmejian and state legislators fail to settle a budgetary dispute, the governor’s veto of $706 million from the state budget could cut more than $15 million from a range of Orange County health and social programs, a legislative analyst said Friday.

“It’s hard to come up with a total dollar figure overall, but I think that $15 million is pretty reliable,” said Karen Coker, an analyst for county legislative advocate Dennis Carpenter in Sacramento.

Most of the Orange County cutbacks could be avoided, however, if Deukmejian and the Legislature resolve a battle over $300 million in surplus funds in the Public Employees Retirement System, Carpenter said.

The governor has pledged to restore $283 million in statewide cuts if the Legislature agrees to use the pension funds to pay for state operations.


In a meeting Friday with supervisors and top county managers, Carpenter predicted that the dispute would be resolved, and that budget cuts “held hostage"--including the up to $15 million in Orange County programs--would be restored.

Indigent Care Funding

“I tend to think this thing will get worked out sometime before the end of the legislative session on Sept. 1,” Carpenter said.

Failing that, indigent health care in Orange County would be hit hardest, losing $3.3 million in funds to pay doctors, hospitals and health care professionals.


“That would have a significant impact because we would have to take it out of our base funding (of $34.7 million),” said Tom Uram, director of the county Health Care Agency. “It would be very disappointing.”

But Uram said he expected that potential cuts would have “no effect” on current negotiations to extend indigent health care contracts with 32 hospitals throughout the county. Hospitals and doctors receive 79% of the funding, with the remainder going to programs for mental health, drug abuse, paying eligibility workers and administration.

However, other budget cuts are unlikely to be restored, regardless of the pension fund dispute.

The same Indigent Medical Services program will lose more than $300,000 in a cost-of-living increase, Uram said. “We are very disappointed. We had hoped to add to our program,” he said.


Together, all potential cuts could amount to a 6.3% overall reduction and “set us back to 1984-85 funding levels,” said Rod DiLuigi, assistant health care director.

In the area of social services, the county will lose $300,000 in state reimbursement for eligibility workers.

“We have to fund the eligibility workers we have, so it puts me in a position of having to ask for $300,000 more from the county’s general fund, and I’m sure . . . the board won’t be enthused about that,” said Larry Leaman, director of the county Social Services Agency.

Leaman “Surprised”


“This maintains the cost shift from the state to the counties of three or four years ago,” Leaman said. “We were very surprised because we thought this was all worked out.”

Orange County also stands to lose part of an estimated $2.5 million to equalize Medi-Cal payments to counties, Coker said.

More than $10 million for child welfare services also are being held up by the dispute over use of the pension funds. But if the funding does come through, Leaman said, Orange County stands to gain $1.8 million more than last year to help pay for social workers to handle increased caseloads brought about by a change in state law.

Funds for Orangewood, the county’s emergency shelter for abused and abandoned children, were threatened by a change in the state formula for child welfare services. But a last-minute lobbying blitz by state Sen. John Seymour (R-Anaheim) and other county legislators preserved the existing money, at least for the 1986-87 fiscal year.


Also, Orange County could lose funds that would have paid for a 4% increase in money paid to foster parents.

Hard to “Swallow”

“We have a really hard time getting foster parents in Orange County to take care of these kids, so this budget cut will be one of the hardest for our board to swallow,” Coker said.

A cut in funding for those who provide in-home support services to an estimated 4,200 aged and infirm also will not directly hit the county budget. However, county officials predicted it would likely translate to a cut in services.


Carpenter also warned supervisors that funds for reimbursement to rural counties for the cost of complex homicide trials was cut, leaving little likelihood that Orange County could win reimbursement--as it has requested--for prosecuting and paying the defense costs in the Randy Kraft case.

Kraft, 41, is accused of murdering 16 young men in Orange County and 21 others. The case is scheduled to go to trial next January, and the district attorney’s office has estimated that defense costs alone already have reached $2 million.