California Governor Jerry Brown Admits To $1.5 Billion “Math Error” In State Budget
Posted by Tyler Durden on January 19, 2017 10:15 pm
Tags: Brown's administration, budget, Budget Deficit, Department of Finance, ETC, Federal assistance in the United States, federal government, Government, Healthcare reform in the United States, Medi-Cal, Medicare, Politics, Presidency of Lyndon B. Johnson, Social Issues, united states
Categories: Brown's administration budget Budget Deficit Department of Finance Economy ETC Federal assistance in the United States federal government Government Healthcare reform in the United States Medi-Cal Medicare Politics Presidency of Lyndon B. Johnson Social Issues United States
Budgeting can be difficult, particularly for expansive state budgets that require a ton of inputs to support 1,000s of line items each of which can result in massive variances depending on the development of various economic indicators like interest rates, commodity prices, etc. throughout the year.
That said, while forecasting variances are inevitable, we, as taxpayers, generally rely on our expensive budget office employees to at least present annual budgets that reflect sound mathematics and accounting principles. Unfortunately, that seems to be too much to ask of the math-challenged administration of California Governor Jerry Brown which decided to double count certain cost savings and simply “forgot” to incorporate other expenses altogether. Per the LA Times:
Budget staffers said there were, in fact, two mistakes:
– A double counting of state savings from a program that coordinates health, behavioral and long-term care services with local government. That error understated expenses by $913 million.
– A forgotten state government cost from two counties — San Mateo and Orange — enrolling in the coordinated program, which meant missed expenses of $573 million.
Embarrassingly, when asked about the “mistakes” that resulted in a $1.6 billion budget deficit, the Chief Deputy Director of Brown’s Department of Finance could offer no other explanation than that the “math was wrong” while another spokesman admitted, “There’s no other way to describe this other than a straight up error in accounting, which we deeply regret.”
Meanwhile, adding insult to injury, Brown’s administration allegedly discovered their “accounting errors” several months ago but didn’t disclose them to State Senators until last week. Per Mercury News:
The administration discovered accounting mistakes last fall, but it did not notify lawmakers until the administration included adjustments to make up for the errors in Brown’s budget proposal last week.
The Department of Finance said it did not account for $487 million in rebates from drugmakers that the state must pay the federal government to reimburse Washington for its share of Medi-Cal drug costs.
The state also miscalculated costs for the Coordinated Care Initiative, an experimental program in seven counties to improve care for a group of high-needs patients eligible for both Medi-Cal and Medicare, the federally funded health plan for seniors and people with disabilities.
Officials double-counted some of the expected savings, leading to a budget hole of $913 million, and undercounted the costs in San Mateo and Orange counties by $573 million.
In his spending plan, Brown proposed eliminating the Coordinated Care Initiative because he said the program was not cost effective, angering counties that said the change would shift $550 million in costs to them.
Of course, the blatant attempt to cover up their “math error” rather than quickly admit the mistake last fall, led California State Senator John Moorlach to ask the obvious question of what other errors may be buried in the expansive budget, saying “It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you.” But, no matter the size of the various other “math errors” that come to light, we’re quite certain that California’s liberal legislators in Sacramento stand ready, willing and able to implement whatever tax hikes may be necessary to address such issues.