A rare thing happened at the State Capitol on February 29. The State Legislature passed a tax with bipartisan support.
Such an event is less routine than Leap Day itself, which occurs on that date just once every four years. But it happened for the best of possible reasons: helping vulnerable Californians in need.
New taxes are seldom passed in California for many reasons. A recurring challenge, even when confronted with great need, is the requirement that two-thirds of lawmakers must vote for them. This threshold is extremely rare among all states and contributes to gridlock. Fortunately, after many months of hard work, we had a breakthrough.
The tax was passed as part of an agreement, subsequently signed into law by Governor Jerry Brown, to refinance health care services for low income Californians through the Medi-Cal program, which serves nearly a third of the state’s population. Also known as the managed care organization or “MCO tax,” the tax will be paid by health plans—like Blue Shield, Anthem, and Kaiser Permanente—based on their enrollment.
California has had a similar tax in place since 2005, but it had to be restructured to conform with new federal requirements or else the state would lose over $1 billion dollars in federal funds that help pay for Medi-Cal. That makes this tax a great deal for our state budget.
As part of the agreement, we also passed a bill authored by Assemblymember Tony Thurmond (D-Richmond) that restores vital funding for services to enable Californians living with developmental disabilities to live healthy and productive lives. This bill provides $287 million to raise the rates of payment for those who provide transportation services, supported and independent living services, and employment services. These rates had gotten so low that many providers had closed and others were flirting with it, thereby jeopardizing the state’s commitment to ensure that disabled Californians can live with dignity in their own communities.
This agreement was made possible by a few key factors. First, deadlines matter. If we did not restructure our MCO tax by June 30 to satisfy the feds, then we would have blown a huge hole in our state budget. Second, public pressure pushes reluctant lawmakers to act. Without the work of dedicated advocates across the state, including many from the Bay Area, reluctant lawmakers would have avoided the tough, but needed, decisions of state.
Why is that? In this case, Republican legislators are typically anti-tax. With all Democrats voting in support of the tax, we needed a handful of Republican votes for the MCO tax to pass. We got 13, the two we needed in the State Senate along with 11 in the State Assembly. The reason for the disparity is that Assembly Republicans participated at the negotiating table, unlike their counterparts in the Senate.
Looking ahead, the question is whether we can see a repeat of this great success. The Legislature has been engaged in months-long negotiations over how to fund much needed investments in our crumbling infrastructure. Upgrades are vital to ensuring our quality of life and the competitiveness of our economy. With a discussion of new taxes on the menu to pay for such investments over the long term, we must overcome a similar set of political challenges to see results. So, please make your voice heard. It makes a huge difference!
Phil Ting represents the 19th Assembly District, which includes the Westside of San Francisco along with the communities of Broadmoor, Colma, and Daly City.
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