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Blog: California Lawmakers Reach Deal On How To Spend Tobacco Tax Money

melfoody / Flickr

melfoody / Flickr

June 12, 7:19 p.m.: Democratic lawmakers have reached a deal with California Governor Jerry Brown over how to spend more than a billion dollars in Proposition 56 tobacco tax revenue.

A little less than half of that money would go toward increasing Medi-Cal reimbursement rates for doctors and dentists, which health advocates say have been far too low.

Anthony Wright with the advocacy group Health Access says increasing doctors’ and dentists’ reimbursement rates will improve care for Medi-Cal patients, if the money is put toward high-need areas.

“If they’re targeted, if they’re data-driven, then they can make a big difference in making sure people get the care that they need,” Wright says.

Most of the rest of the money will go toward the governor's priority: funding Medi-Cal's expansion under Obamacare, as the state takes on more of the cost.

The California Medical Association says all of the money should have gone toward doctors' rates instead of covering Medi-Cal budget gaps.

A small portion may also go toward women’s health, the developmentally disabled, and HIV/AIDS treatment.

These provisions must all be approved by the Trump Administration.

June 12, 5:58 p.m.: There’s still no formal declaration of a California budget deal at the state Capitol – though that’s expected as soon as Tuesday morning. But the contents of the agreement have nearly all been made public.

The spending plan would increase money for K-12 schools, community colleges and the CSU system. But in an unprecedented move, the Legislature will split off the UC president’s office budget from the rest of the university. That’s in response to a blistering state audit that questioned the UC’s budgeting practices.

There’s more money for Medi-Cal providers like doctors, dentists and Planned Parenthood – if the Trump administration signs off. Adult dental services for people on Medi-Cal would be restored as well.

And then there are these two bombshells that went public Monday just three days before Thursday’s scheduled votes: a gutting of most tax collection duties from the state’s embattled Board of Equalization; and a political play from Democrats to delay the date of an expected recall election for an Orange County state Senator until next June’s primary. That’s intended to give Democrats a better chance at holding the seat – and with it, their two-thirds supermajority in the Senate.

Even though there's no formal announcement yet, California lawmakers will still be able to vote Thursday on much of the spending plan. That's because most of the budget package – including many of the related measures known as "trailer bills" – went public Monday, three days before the Legislature's June 15 constitutional budget deadline. That reflects last fall's passage of voter-approved Proposition 54, which requires all bills to be in print for 72 hours before their final votes.

June 12, 4:46 p.m.: California lawmakers are heading towards a Thursday vote on a budget package. One piece is the so-called “cannabis trailer bill” – which aims to align the state’s rules for medical and recreational marijuana. 

Nate Bradley is with the California Cannabis Industry Association, which represents cannabis businesses up and down the supply chain. 

In his view, the bill is written in a way that will assure local governments the state is taking a very thorough approach to cannabis regulation.

"To let the rest of the state know that if you choose to regulate it, you’re going to be covered," Bradley said. "You’re not going to be left holding the bag."

Under the cannabis trailer bill, smaller-scale growers will be able to form cannabis cooperatives as other California ‘ag’ producers do – like Blue Diamond almond growers or Land o’ Lakes dairies.

June 12, 11:56 A.M.: California’s embattled Board of Equalization would be gutted under a major piece of the state budget deal that just became public Monday – three days before a likely vote in the Legislature.

The proposal originated with State Controller and board member Betty Yee after a recent report slammed board members for illegally using state resources for political events.

“This is something that has given all of us some pause, and there are serious concerns,” Yee told Capital Public Radio Monday morning. “We believe the way that the board has been functioning – and if it is allowed to continue to function in this manner, where there is overreach into the day-to-day operations of the organization – continues to create liability for the state.”

But David Kline with the California Taxpayers Association slammed the lack of transparency from Gov. Jerry Brown and Democratic legislative leaders by including the proposal in the state budget deal. 

“They’re talking about overhauling a state agency that collects a third of the state’s revenue and has 4,000 employees. That’s just a recipe for disaster, jamming it through that fast,” Kline says. “You need a chance to actually vet all of the policy proposals in the bill, and three days just isn't gonna cut it.”

Under the proposal, the lion’s share of the board’s tax collection duties would be transferred from its elected members to Gov. Jerry Brown’s administration. Only the board’s constitutionally-protected duties would be preserved.

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