Kelso: Court order will add $3 billion to budget deficit

A court order to bring state prison health care construction costs up to an adequate level will add $3.1 billion to the deficit for the 2008-09 state budget, the receiver who filed a suit asking for the order said Wednesday.

Appointed prison health care receiver J. Clark Kelso, who announced the order earlier Wednesday, told attendees at a Sacramento Press Club luncheon that the order would end up costing the state more than a state bond that legislators wouldn't approve earlier this year.

"I worked with the governor and the state controller to see if I could get funding through alternative mechanisms," Kelso said at the luncheon. When he was told they couldn't do so without legislative approval, he made the move to file a suit forcing the situation.

He said a judge won't hear the suit until Sept. 22. But the prospect of adding to a deficit that's already as high as $17 billion by some estimates complicates the task for state legislators trying to craft an overdue state budget.

State Senate Pro Tem Don Perata (D-Oakland) and Gov. Arnold Schwarzenegger announced an agreement earlier Wednesday on a budget proposal, but it was unclear whether that proposal took Kelso's suit into account.

Kelso said a bond, because it would be repaid over time, would've cost the state $500 to $600 million annually, and would have had no effect on this year's general fund.

"It's a big difference between a bond and pay as you go," he said.

Kelso also answered criticisms over his approach, such as one released by State Assembly Republican Leader Mike Villines (R-Clovis) after Kelso's announcement of the filing.

Villines said legislators didn't agree to a bond because Kelso wouldn't release enough details about his construction plans, and because prison health care might have potentially been better than health care many state residents receive.

But Kelso said he's under a court mandate to work quickly and efficiently, and that means fewer details up front than in a normal state construction project.

"We're trying to emulate the C.C. Myers of the world," he said, referring to a construction firm that's gained a reputation for completing state projects quickly and on budget.

He also asked whether legislators critical of prisoner health care have ever voted for universal health care, and whether anyone would willingly go to prison to receive better care.

"This is a very basic level of care," he said of what he is charged with finding a way to provide.

Kelso took no position on Propositions 6 and 9, two statewide ballot initiatives that would direct more funding for public safety in California.

"I'm trying to keep my focus as narrow as I can," said Kelso, who was appointed by a federal judge to his current role. He previously has run the state's Insurance Department and Department of Information Technology after scandals and management turnover at those agencies.

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