Going Out With a Bang: Three Big Issues to Close the California Legislative Year

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Photo: Wikimedia Commons

This week marks the return of our elected officials to Sacramento for a four week sprint through some of the most important issues currently facing the state. Will they be able to pull it off? Read below to learn about what’s facing our legislators.

First up: the state’s crumbling transportation infrastructure.

As you may have noticed while hitting the road on your various vacations, California has some of the worst roads in the nation. The American Society of Civil Engineers states that 30% of the state’s bridges were deficient or obsolete, and Caltrans states that 41% of California’s roads are distressed or in need of serious maintenance. According to the American Society of Civil Engineers, poor roadway conditions have cost the average California driver an extra $586 in car repair costs. In total, the state is suffering from a $59 billion backlog of needed repairs.

Soooo, how shall we pay for this?

San Jose State Senator Jim Beall has laid out a proposal to close the gap in transportation funding, and yes it does involve new taxes. Specifically, he wants to raise the current gasoline tax from the current 18 cents per gallon to 30 cents per gallon, and for diesel – currently at 22 cents per gallon – up to 44 cents per gallon. Additionally, he wants to raise vehicle registration fees by $35 for gas powered cars, and by $100 for electric cars (which are heavier and thus have a greater impact on roads). All together, his plan would generate $4 billion in additional money every year to go towards transportation infrastructure repair.

It’s gonna be a bumpy ride to get this passed, though. First off, his bill would require at least some support from Republicans, as raising taxes of any kind requires ⅔ majority votes in both houses of the legislature, which Democrats do not have. Then, there will be a fair share of arguing over how the money will be spent – on which roads and bridges, whether it should go to any public transportation projects, etc.

Are we there yet? Vote and comment about the proposal here:

Raise Gas Tax, Vehicle Registration Fee
California has some of the worst roads in the nation. The American Society of Civil Engineers estimates that 41% of the state’s roads are distressed or are in need of serious maintenance, and 30% of its bridges are deficient or obsolete. All told, California’s transportation infrastructure suffers from $59 billion worth of needed repairs. In an attempt to address this, San Jose State Senator Jim Beall has proposed legislation to raise the gasoline tax as well as the vehicle registration fee. The gas and diesel tax, set in the 1990s, currently stand at 22 cents per gallon and 44 cents per gallon, respectively. Beall’s legislation would raise the tax to 30 cents for each gallon of gasoline and 44 cents for every gallon of diesel. Vehicle registration fees would go up by $35 for fuel powered cars and up by $100 for electric vehicles. His proposal, which would raise $4 billion in transportation funds every year, would require at least some Republican support in order to get the needed 2/3 majority vote from both houses of the legislature.



 

Next up: healthcare.

Right now, 11.3 million Californians receive very low cost health insurance through Medi-Cal. This is thanks largely in part to substantial federal subsidies that came along with President Obama’s Affordable Care Act.

However, the gravy train is about to end. The feds have given California warning that unless the state allocates more of its own money towards health programs they will withhold $1.1 billion in health care support.

Ouch.

Well, the money’s got to come from somewhere, and Marin State Assemblymember Marc Levine has an idea: he has proposed instituting a flat tax on managed care organizations – health care providers that serve Medi-Cal recipients in addition to standard rate payers – of $7.88 per patient per month.

Currently, managed care organizations pay a tax of 3.9% of the total revenue money they receive to go towards Medi-Cal recipients. The tax is passed on to consumers who purchase regular plans. Levine’s proposal would mean additional costs for those who buy market rate insurance and would raise $1.9 billion annually. The money would not only go towards funding Medi-Cal services (which would be coupled with the $1.1 billion in federal matching funds), but would also support home care services and increase funding for programs serving people with developmental disabilities. The feds required that new revenue support the California healthcare system more broadly rather than just the set $1.1 billion.

Again, in order to pass Levine will need to convince at least ⅔ of his colleagues in both houses, and bring on board Republicans. This will no doubt be a bitter pill for them to swallow.

Would you support this new tax? Vote and comment here.

 

Monthly Tax of $7.88 per patient on Managed Care Organizations
$1.1 billion in federal funds supporting low income health plans is set to expire in one year unless the state allocates more of its own money to health care. Because of this, Marin Assemblymember Marc Levine has proposed a bill that would set a flat tax of $7.88 per patient per month on Managed Care Organizations. Currently, Managed Care Organizations – health providers that offer both low income health plans as well as market rate plans – pay a tax of 3.9% on the total Medi-Cal revenue they receive from the state. The cost of the tax is passed on to consumers who can pay for regular plans, and the MCO’s receive government money to pay for low income health plans. In order to keep receiving the federal subsidy towards low income health, however, California must allocate more of its own money than it has in the past, thus Levine’s bill. His proposal would generate an additional $1.9 billion annually, which, in addition to subsidizing low income health, would support home care services and programs for people with disabilities. He will need some Republican support in order to reach the 2/3 legislative majority needed to pass a new tax.



Finally for now we turn to the Minimum Wage.

Mark Leno, the Democratic State Senator from San Francisco, has proposed a bill that would raise the minimum wage up to $11 by this coming January and then again to $13 per hour by January of 2017. Additionally, starting in 2019, the minimum wage would be adjusted annually to keep up with the rate of inflation. Leno’s bill, SB3, was approved in June along a largely party-line vote, and now is up for consideration in the Assembly.

While it is expected to be resisted by most Republicans, a perhaps surprising opponent to Leno’s efforts is Jerry Brown’s finance department. They recently came out against the law, noting that it would mean additional costs to state agencies of up to $3.4 billion in 2017, and also claimed that on the whole the bill would have a harmful effect on California’s economy. Leno has criticized the finance department, saying it didn’t adequately consider the additional purchasing power his bill would give to families to put back into the economy. Leno also notes that with California having the highest poverty rate in the nation – nearly a quarter of the state’s 38 million residents live in poverty – something must be done.

Does this seem like the right move to you? Vote and comment here:

Raise the California Minimum Wage to $17, Adjust With Inflation
San Francisco State Senator Mark Leno has proposed a bill – SB 3 – which would raise the minimum wage to $11 per hour by 2016 and then to $13 per hour by 2017. Additionally, starting in 2019, the state’s minimum wage would automatically adjust to keep pace with inflation. Leno asserts that a heightened minimum wage will help reduce poverty in California, which currently stands at approximately 25% of the state’s population. His bill has been approved by the Senate, along a mostly party line vote, but faces opposition from a Jerry Brown’s department of finance which has warned that SB 3 would raise costs to state agencies upwards of $3.4 billion by 2017, money which would have to come from the general fund. Leno believes that any additional cost to state agencies will be made up by additional sales taxes and general economic growth as a result of increased purchasing power among families.Should California up its minimum wage? Vote and comment here.



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