Matthew Yi | San Francisco Chronicle Sacramento Bureau
Wednesday, September 23, 2009 -- Gov. Arnold Schwarzenegger signed a bill Tuesday that will prevent nearly 700,000 poor children from losing health insurance, reversing his earlier threat to veto all legislation unless state lawmakers first addressed his top priorities.
On Sept. 8, as lawmakers raced to debate and vote on hundreds of bills before the session expired, Schwarzenegger's spokesman said the governor would reject all legislation until the Legislature first dealt with water, prisons and renewable energy.
Democratic lawmakers responded by testing the governor's threat, immediately sending him a bill to honor Vietnam veterans that had received strong bipartisan support in the Legislature. Schwarzenegger stuck to his word and vetoed the bill right away.
But Tuesday, the Republican governor put aside his veto threat and not only signed AB1422 but also held a signing ceremony in the Capitol's ornate rotunda.
AB1422 was too important not to sign, the governor said, even though the issues he wanted the Legislature to deal with weren't done - or weren't done to his satisfaction.
The Legislature significantly watered down the governor's prison plan before approving it; lawmakers have been unable to revamp the state's water infrastructure, and the governor has vowed to veto a renewable energy plan that the Legislature approved - and replace it with an executive order to carry out the plan his way.
The steep budget cuts in July to erase a $24 billion deficit would have led to the removal of 700,000 poor children from the state's Healthy Families heath insurance program starting in October.
So many children losing health care coverage, especially with the threat of the H1N1 flu epidemic looming, would have been disastrous, Schwarzenegger said.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said the bill signing ends a string of bad news from California, which has been weathering a deep recession and historic budget deficits.
"Finally, there's something great to celebrate in California," he said.
AB1422 would raise $194 million a year in part by imposing a temporary tax on health care giants such as Health Net and Kaiser that participate in the state's Medi-Cal program, which provides health care to the poor. The new 2.35 percent tax on companies that manage Medi-Cal insurance programs would replace a separate 5.5 percent fee that is scheduled to expire in October.
The bill also would raise the monthly per-child premiums by $4 to $7 for some program participants. Under the plan, the state also would receive $81.4 million from the First 5 California state commission, which oversees Proposition 10 tobacco tax revenue to promote early childhood development.