BERKELEY – California lawmakers' inability to pass a budget on time is threatening the cash flow of health clinics that are funded by Medi-Cal and serve some of the state's poorest residents.

Most clinics funded by Medi-Cal, a health care program for the poor, bill for reimbursement and get a weekly check. When the fiscal year began July 1 without a state budget, an emergency fund of $2 billion kicked in. That amount included $1 billion in matching federal money.

The fund is supposed to tide clinics over until September, but in recent years it hasn't been lasting that long.

Last year, money ran out July 27, said H.D. Palmer, spokesman for the Department of Finance. This year, it's anticipated the state will be able to cover most of the reimbursements that normally would go out on Thursday.

After that, there will be no more money unless lawmakers pass a budget.

Clinics get between 40 percent and 50 percent of their revenue from Medi-Cal, so the delay in reimbursement is felt immediately, said Chris Patterson, spokesman for the California Primary Care Association.

Some larger clinics have reserves, while others are able to get lines of credit from local banks or health care foundations. For smaller clinics, reduced hours, layoffs and even temporary shut downs are a possibility.

“It's a pretty bad situation,” Patterson said.

The cash flow squeeze comes on top of a previous decision by Gov. Arnold Schwarzenegger to delay Medi-Cal reimbursements for August, part of a bigger effort to address the state's $15.2 billion deficit.

The Primary Care Association, which represents 600 clinics, is planning a series of events Thursday to highlight the funding gap.

“This will be the second year in a row that the safety net of clinics and their patients have to bear the burden of inaction by our leaders in Sacramento,” Patterson said.

Republican and Democratic lawmakers have been at an impasse over several key issues, including whether to raise taxes to deal with the deficit. Both sides say they're looking out for the best interests of state residents.

“Unfortunately, clinics are caught in a crossfire,” said Steve Maviglio, spokesman for Assembly Speaker Karen Bass, D-Los Angeles.

On the front lines, Jane Garcia, chief executive of La Clinica de La Raza in Oakland, said she has mixed feelings about the financial crunch.

On the one hand, having to dip into reserves or borrow money is time-consuming and expensive.

But she doesn't want lawmakers to agree to a bad budget. For instance, she said one of the issues being fought over is eliminating adult dental care and other services.

Ultimately, the system short-circuits if clinics can't provide care and patients end up seeking treatment at much more expensive emergency rooms, she said.

“You're creating a system with an intervention at the most expensive level of care,” she said.