Brown Rejects Tax Credits, Medi-Cal Bills

With an eye on what he called the state’s “precariously balanced budget,” California Gov. Jerry Brown rejected a host of Medi-Cal expansion bills and tax credits for everything from small businesses to food bank donors. 

Brown, in his veto message for each of six Medi-Cal bills, said he rejected them due to the program’s looming billion dollar funding shortfall. Medi-Cal provides health care for the state’s low income residents and people with disabilities. 

“Taken together,” Brown wrote, “these bills would require new spending at a time when there is considerable uncertainty in the funding of this program. Until the fiscal outlook for Medi-Cal is stabilized, I cannot support any of these measures.” 

They dealt with a range of topics from rural health care to patient transportation. Brown added that some “unnecessarily codify” existing benefits while others sought to create new benefits. 

Earlier this year, Brown and Democratic lawmakers proposed a tax on managed care organizations to pay for an expected $1.1 billion deficit in next year’s spending plan.  It's caused by the federal government no longer authorizing an existing California tax on MCOs.

During a special session at the Capitol this summer, state leaders failed to gain enough support to pass a reworked tax.

Brown, a fourth-term Democrat, had a similar veto message for authors of several tax credit measures.

“Despite strong revenue performance over the past few years, the state’s budget has remained precariously balanced due to unexpected costs and the provision of new services,” Brown wrote.“Given these financial uncertainties, I cannot support providing additional tax credits that will make balancing the state’s budget even more difficult.”

The tax credit proposals targeted exemptions for everything from seismic retrofits to purchases of energy or water efficient home appliances.

Sen. Jim Beall, D-San Jose, took issue with Brown’s rejection of a tax credit designed to spur more affordable housing.

“I believe many working families who have been hit hard by the high cost of housing in California because of the lack of affordable house share in my disappointment of the Governor’s veto of SB 377,” Beall said in press release. “This veto is a major blow to affordable housing construction in our state.