Things to know about California’s tobacco tax dispute

FILE - In this Jan. 10, 2017, file photo, California Gov. Jerry Brown discusses his 2017-2018 state budget plan he released at a news conference in Sacramento, Calif. Brown is coming off a blockbuster year of liberal wins on climate change, minimum wage, gun control and two of his pet projects, sentencing reform and high-speed rail. But he delivers his State of the State address Tuesday, Jan. 24 in a time of uncertainty for California and to a Legislature that's in a defensive posture after the election of President Donald Trump. (AP Photo/Rich Pedroncelli, File)

SACRAMENTO, Calif. (AP) — California lawmakers have reached a deal on most elements of the state budget, but they remain at odds with Gov. Jerry Brown on a few key pieces, including how to spend $1.2 billion in revenue from an increased tobacco tax.

The ballot initiative requires a chunk of the money to be used for expanding access to Medi-Cal, the publicly funded health plan for people with low incomes.

Here are things to know about the dispute:


The expensive campaign in support of the tax hike was funded with money from doctors and dentists, who wanted a boost in the notoriously low payments they get for seeing patients on Medi-Cal and Denti-Cal.

But Brown proposed using the money to cover normal growth in Medi-Cal, freeing up general fund dollars for other programs. He said the likelihood of a recession demands caution.

Brown’s proposal angered doctors, dentists and health care advocates who accused him of reneging on promises made to voters. The Assembly and Senate backed them up.

“We’re trying to balance that with the fiscal prudence we think is required,” Amy Costa, Brown’s chief deputy budget director, told a budget committee Thursday.


The Senate and Assembly floated their own proposals to increase payments for health care providers by $1 billion a year.

The Senate proposed targeting the higher payments at geographic areas and specialties with particularly high needs. The Assembly suggested paying bonuses to providers who see a large number of Medi-Cal patients.

Both chambers want to use some of the tobacco tax money to provide Medi-Cal coverage for young adults up to age 26 living in the country illegally.

Brown’s administration and the nonpartisan legislative analyst have warned that doing so would cost far more than the $54 million to $86 million that lawmakers propose budgeting.


Budget-writing lawmakers agreed to restore full adult dental coverage and eyeglass benefits for people on Medi-Cal. The benefits were cut during a budget crisis during the Great Recession.

Medi-Cal currently covers primary and preventive dental care as well as dentures for adults, but does not pay for root canals and other services, according to Anthony Wright, executive director of the advocacy group Health Access.

Expanded dental coverage would begin Jan. 1, while the eyeglass coverage would be restored in 2020. Both would be funded with the general fund, not tobacco tax money.


The state Constitution requires lawmakers to forfeit pay if they don’t pass a balanced budget by June 15.



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