Governor Arnold Schwarzenegger released his first state budget proposal on January 10 to prepare for FY 2008-09, which begins on July 1, 2008. His budget proposal came just two days after he announced that the state is facing an expected $14.5 billion structural deficit. Seeking to close the anticipated gap, the Governor’s budget proposal includes 10% reductions to nearly all General Fund departments and programs, boards, commissions, and elected offices.

The state’s HIV/AIDS budget was not spared: the proposal includes an $11 million cut in state funding of HIV/AIDS programs. This figure includes a $7 million cut to ADAP, which would be enacted by removing from the formulary certain drug classes that are used to manage side effects and co-morbid conditions. The budget also includes a proposed $3.6 million cut to the State Office of AIDS’s programs and services, including HIV education and prevention, counseling and testing, surveillance, early intervention programs, and therapeutic monitoring. In addition to cuts in the HIV/AIDS budget, the Governor has proposed a 10% reduction in Medi-Cal provider reimbursement rates, as well as the elimination of certain optional Medi-Cal benefits—including adult dental, optometry, and psychology—that are essential to people living with HIV/AIDS.

The San Francisco AIDS Foundation is deeply concerned about the impact of these proposed cuts, particularly on low-income Californians who depend on public support for medications and medical care. Of particular concern are the cuts to ADAP. For many ADAP clients, medications that alleviate antiretroviral drug side effects and treat other co-morbid conditions—including depression and other mental illnesses—are an essential part of managing HIV. Removing these drugs from the formulary could hinder adherence to antiretroviral therapy and seriously undermine the health of ADAP clients.

Advocates also oppose the cuts to Medi-Cal and are troubled by their potential effect on the nearly 50% of HIV-positive Californians who depend on Medi-Cal for their health and dental care. Medi-Cal’s provider rates are already among the lowest in the country, and HIV specialists struggle to serve their clients under current rates. An additional 10% cut could force some physicians to stop seeing Medi-Cal clients, which would further reduce low-income Californians’ access to HIV and other specialists, particularly in rural or otherwise underserved areas. Advocates also oppose the elimination of Medi-Cal benefits such as adult dental, psychotherapy, and podiatry. Thousands of Californians depend on these essential services to manage their HIV disease as well as their concurrent health conditions and to maintain optimal health.

HIV advocates believe that these savings will not only complicate the disease’s challenges but will eventually burden the state with the financial costs of rising rates of illness and HIV infection. By reducing access to medications necessary to keep HIV-positive individuals healthy while on antiretrovirals, and reducing reimbursements to their health care providers, many low-income individuals living with HIV will face new illnesses and have no choice but to turn to hospital emergency rooms. The San Francisco AIDS Foundation and its advocacy partners have strongly encouraged the Governor and the Legislature to consider other budget choices to address the state’s structural deficit in order to protect essential health and human services programs. In addition, advocates will work with the Legislature and the Governor’s office to find alternative savings in the HIV/AIDS budget that prevent harm to people living with and at risk for HIV.

We will keep our readers thoroughly informed of developments regarding the FY 2008-09 budget that affect people with HIV and AIDS.