State Ordered to Release Medi-Cal Funds : Budget: Stalemate in Legislature may be nearing an end. Democrats appear ready to make concessions.

A Superior Court judge Tuesday ordered the state to release $330 million to hospitals and nursing homes by Monday, a development that came as Assembly Democrats appeared ready to make concessions they hoped would end the crisis that has left California floundering without a budget for more than two weeks.

Judge Ronald B. Robie of the Sacramento County Superior Court, acting on a request by a group of nursing home operators, issued the temporary restraining order to free $330 million for 1,200 hospitals and 1,468 nursing homes. Many of the facilities rely heavily on Medi-Cal funds and have not been paid since July 1.

Controller Gray Davis, who is prevented by law from paying state bills until a budget is approved, applauded the judge’s decision. But he warned that if the courts continue to order the release of funds and the state makes an $850-million payment to school districts this month, as scheduled, the treasury will be “bone dry” by July 27. Last week, a federal judge ordered the state to provide payments of $149 million to nearly 2 million welfare recipients.

Assembly Democrats said in interviews that they are prepared as a last resort to send Gov. George Deukmejian a plan to close the $3.6-billion budget gap entirely with cuts in programs. Until Tuesday, the Democrats had been insisting that any solution include equal doses of budget cuts and tax and fee increases.

Assemblyman Richard Katz (D-Sylmar) said, “You can hold out, but at some point, holding out with no end in sight and no hope for compromise ends up hurting the very people we are trying to help.”

Two Assembly-Senate conference committees meeting Tuesday night approved the Democratic plan, setting the stage for an Assembly floor vote on Thursday.

The package includes more than $1.3 billion in new revenues and $1.6 billion in budget cuts, but the two sides of the equation are not linked.

One leading Republican, Assemblyman Willam P. Baker of Danville, denounced the package as a “political charade.” He predicted his fellow Republicans would reject the plan because it would force the governor to cut too deeply into programs Republicans value, such as prisons and universities, and spare such Democrat-supported services as health and welfare.

The developments came as the state faced an ever-deepening cash crunch because of the budget crisis.

Davis said that once the $850-million payment is made to schools July 27, “there will be absolutely no money left to make any substantial payments at all.”

Davis has been taking the side of welfare recipients, nursing home operators and others whose state payments have been held up even though he is named as a defendant in the lawsuits.

The Democratic officeholder appeared at a news conference with several minimum-wage “in-home support workers” who have not been paid since mid-June for their services to the sick and elderly who otherwise would have to go into costly nursing homes.

Despite the court action requiring the state to make payments to welfare recipients and hospitals, Davis is still holding up about $870 million in other payments, including $270 million in Medi-Cal money for doctors, dentists and pharmacies and an additional $21 million to providers of in-home support services.

Cindy Lara, 33, of Sacramento, who cares for her chronically ill 66-year-old father under the In-Home Supportive Services program, burst into tears at Davis’ news conference. “I have no money. I have an eviction notice. I have to be out of my home Aug. 10. My car is ready to be repossessed,” she said, sobbing.

Elsewhere around the state similar stories were being told.

“I ran out of food around the 10th (of July) and the bills have kept coming in,” said Rita Blue, a Riverside County resident who depends on a $1,000-per-month check from the state to support herself and her mother, who has Alzheimer’s disease.

“You want to know how bad things are? Today I sold blood so I could buy something to eat,” she said, adding that she received $15 from a blood bank.

For James Weatherby and his wife, Lynne, of Riverside, the payment holdup has meant going without meals so two other family members have enough nourishment to offset the effects of medication they take for epilepsy.

Lynne Weatherby provides in-home care for her 13-year-old son, Ted, who is also blind and epileptic, and his brother, Rick. Her monthly checks of $648, coupled with a small disability check James Weatherby receives because he is blind, are what the family live on.

“We’re going through a lot of hurt,” said James Weatherby, 35, estimating the family income since July 10 at $5.

In Los Angeles County, many home-care workers from among about 40,000 have not been paid since June 10, according to Ophelia McFadden, general manager of the Los Angeles Homecare Workers Union Local 434B of Service Employees International Union.

She said that the union “delivered food to some who didn’t even have gas or bus fare. . . . One woman called and broke down and cried and said I have nothing in my house for my children (to eat). We are trying to provide food baskets.”

Lolly Birlin, a Ventura County woman who cares for her severely disabled daughter, said that after buying groceries and gasoline Tuesday morning she was down to her last $1.78. “I’m just waiting. I don’t know what else to do,” she said.

Also hard hit is Bette Bendorf, a single mother who provides home care to a number of clients in Orange County. She said that she has been unable to pay her rent because she has missed two paychecks.

“I am going to have to take care of those clients who absolutely need the care and others are going to have to do without for a while.”

In San Diego, Ernestine Aviles, who cares for a 90-year-old woman, said that she will be able to survive the budget crunch because of her husband’s earnings. But many of other people who live in her apartment complex won’t be so lucky, she said. “There are homemakers in this building who are having to force themselves to leave their patients because there is no paycheck coming in.”

Ronald M. Kurtz, executive director of the California Assn. of Health Facilities, the group that filed the suit to free up the Medi-Cal funds, said Judge Robie’s decision “means the money will be released in time for nursing homes to meet their next payroll.” Kurtz said that most nursing homes have already missed two payrolls.

“Nursing home employees have been getting paid by borrowing to the hilt. We’re against the wall. A significant number of our facilities are on the brink of bankruptcy.”

Contributing to this story were Times staff writers Daniel M. Weintraub, Daryl Kelley, Rose Ellen O’Connor, Richard Simon, Jenifer Warren, George Frank and Richard A. Oppel Jr.