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Lawmakers from both sides criticize plan


May 15, 2003

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was going to be a horrible disaster. As it turns out, it's bad but better than we anticipated.''

Sleight of hand

Though the burden on schools may be lighter in 2003-2004, that's largely due to a budgetary sleight of hand that has become a tradition in tough economic times. Davis is proposing to save needed cash by delaying payments of nearly $1.2 billion to schools by sending schools checks in July when the new fiscal year starts.

Similarly, one of the biggest savings will come from a one-time accounting gimmick that will cut $930 million out of next year's budget by changing how the Department of Health Services pays its bills.

Davis also backed off on some of the cuts he proposed in January to Medi-Cal, the state-federal program that provides health insurance to 6.5 million poor people.

But he kept a 15 percent reduction in rates paid to doctors, nursing homes and some clinics that has proved unpopular with both Democrats and Republicans. Nancy McFadden, a senior adviser to the governor, acknowledged that they kept the cut so they could bargain over it with the Republicans, who oppose cutting rates because it would harm doctors.

``Some of this is strategic,'' McFadden said. ``The provider rates are something the Republicans want to protect, too.''

-------------------------------------------------------------------------------- Mercury News Staff Writers Ann E. Marimow, Laura Kurtzman, Jessica Portner and Joannie Sevilla contributed to this report. Contact Mark Gladstone at mgladstone@mercurynews.com or (916) 325-4314.

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