Budget Watch

In an effort to keep our stakeholders informed about the state of California budget, and how the budget will impact funding, as well as programs and services, we post news on “Budget Watch”. This page features updates from the Governor and Legislature, links to important news articles and various budget and advocacy related web sites, as well as important information about how you can get involved to make a difference. Visit this page regularly to keep current on budget issues.

CDCAN Reports on Recent Funding Bills Passed by the Legislature

LEGISLATURE PASSES MANAGED CARE ORGANIZATION TAX REFORM BILL AND PASSES DEVELOPMENTAL SERVICES FUNDING BILL - HEADS NEXT FOR CERTAIN APPROVAL BY GOVERNOR

New Developmental Services Funding Will Provide Over $300 Million In New State General Funding for Developmental Services in 2016-2017 State Budget Year That Begins July 1st – Revised Managed Care Organization Tax Reform Will Draw Down Over $1.1 Billion In Federal Funding Annually For Three Years To Help Off-Set State’s Health and Human Service Program Costs

 

SACRAMENTO, CA [BY MARTY OMOTO, CDCAN - LAST UPDATED 02/29/2016  2:01 PM] -  The California Legislature this afternoon passed, as expected, the Brown Administration  managed care organization tax reform bill (SBx2 2) by Senator Ed Hernandez (Democrat – Azsua, 22nd State Senate District).  The Legislature passed the developmental services funding (ABx2 1) bill by Assemblymembers Tony Thurmond (Democrat – Richmond, 15th Assembly District) and Rob Bonta (Democrat – Alameda, 19th Assembly District). [CDCAN Note: the “x2” stands for the second extraordinary or special session of the Legislature].

The bills now head to the Governor for certain approval. The bills go into effect July 1, 2016.

The vote was as follows for the Brown Administration’s managed care organization tax reform bill – SBx2 2:

STATE SENATE: 28 to 11 (Republicans Bob Huff and Anthony Cannella voted for the measure, Janet Nguyen abstained).

ASSEMBLY:  61 TO 16

The vote was as follows for the Brown Administration’s developmental services bill – ABx2 1:

STATE SENATE: 40 to 0.

ASSEMBLY:  78 to 0 (one vacancy – 31st Assembly District)

The managed care organization tax reform bill, which revises and extends the current managed care organization tax that expires June 30, 2016 for an additional three years, providing over $1.1 billion in federal matching funds.  Passage of the revised managed care organization tax reform bill was  key to passage of the developmental services funding bill, that also includes provisions impacting intermediate care facilities/developmentally disabled, and distinct part nursing facilities, which will provide, effective July 1, 2016 (for most of the new funding provisions – in one instance a month later) over $300 million in new State general funding for developmental services, a significant amount of that which will be matched by federal funds. There is no sunset or ending date to that new State general funding.

“We have an opportunity of monumental opportunities that we cannot give up,” Senate President Pro Tem Kevin De Leon (Democrat – Los Angeles), and noted that the package of bills “brings much needed stability to Medi-Cal….long term investments to the developmental services community.”

Senator Hernandez said the State cannot leave billions of federal dollars on the table that could help California, saying “…this is a good deal for California…”

At least one Senate Republican vote was needed to pass the managed care organization tax reform measure and also the developmental services funding bill. Two Senate Republicans ended up voting for the managed care organization tax reform measure, with one Republican abstaining.

Former Senate Republican Leader Bob Huff (Republican – Diamond Bar, 29th State Senate District) was one of the Republicans who gave their votes for the managed care organization tax reform bill that was key to passage of the developmental services funding bill, who rose to speak in support of the bill.

Senator Jeff Stone (Republican – Temecula, 28th State Senate District) was one of the Senate Republicans who rose in opposition to the managed care organization tax reform bill, arguing that there was sufficient State general funds, especially if the State prioritized spending,  to provide needed increases to developmental services.

Outgoing Assembly Speaker Toni Atkins (Democrat – San Diego, 78th Assembly District) rose in support of the managed care organization tax reform bill, praising the work of the stakeholders, including both parties and the Brown Administration on the managed care proposal and also the developmental services funding piece.

Assemblymember Brian Maienschein (Republican – San Diego, 77th Assembly District) rose in support on the Assembly floor for the managed care organization tax reform measure, as did Assemblymember Brian Dahle (Republican – Bieber, 1st Assembly District) and Assemblymember Brian Jones (Republican – Santee, 71st Assembly District), praising the work of both parties, the Brown Administration and stakeholders in coming to an agreement on a revised managed care organization tax reform.  Maienschein also rose in strong support for the developmental services funding bill.

Assemblymember Thurmond, also chair of the Assembly Budget Subcommittee #1 on Health and Human Services, rose to present the developmental services funding bill, saying that “we heard heart breaking testimony” on the impact of on-going cuts, and that passage of the measure will “…restore the promise of the Lanterman [Developmental Disabilities Services] Act…”

Assemblymember Devon Mathis (Republican – Visalia, 26th Assembly District) rose in support of the managed care organization tax reform and developmental services funding bill, his voice sometimes trembling with emotion, speaking of his own children with special needs and seeing crowded emergency rooms in hospitals that could end up closing in his district and elsewhere in the State.

Assemblymember Bonta rose in support pointing out the provision that prevents the State from retroactively collecting a rate cut to distinct part nursing facilities, that is part of the ABx2 1 funding, and thanked Assembly Speaker Atkins for her leadership in pushing for the funding and that the developmental disabilities community “deserves support from us”.

Assemblymembers Mark Stone (Democrat – Scotts Valley, 29th Assembly District) and Cheryl Brown (Democrat – San Bernardino, 47th Assembly District) spoke in strong support, with Stone warning that the new funding for developmental services was still a State general fund expense that needs a long term “stable source of funding” for every year beyond this one, that is the State’s “obligation” to provide for the disability community.

Assemblymember Tom Lackey (Republican – Palmdale, 36th Assembly District) rose in support of the developmental services funding bill saying that the State is now showing some leadership in helping the developmental disabilities community across the State.

Assemblymember Ken Cooley (Democrat – Rancho Cordova, 8th Assembly District), rose in support of the developmental services funding bill, recounted the life of the son of former Assemblymember Lou Papan, who had developmental disabilities.

Others who spoke in support of the developmental services funding measure were Assemblymembers Eduardo Garcia (Democrat – Coachella, 56th Assembly District) and Kansen Chu (Democrat – San Jose, 25th Assembly District).

CDCAN will provide full report on what the details of the developmental services funding bill and also the Governor’s proposals for additional funding that he proposed as part of his 2016-2017 State Budget in January that is on top of what is allocated in the developmental services funding bill.

 

LINKS TO COPIES OF THE TWO BILLS

The following are links to the two special session bills and also Senate and Assembly floor analysis of both bills compiled by CDCAN. Floor analysis, like committee analysis, are drafted by the majority party of each house for the entire membership, providing a summary of the legislation.  The versions of the bills will change into a form – but not in the content -  to be presented to the Governor for his signature:

 

SBx2 2 – MEDI-CAL: MANAGED CARE ORGANIZATION TAX

AUTHOR: Senator Ed Hernandez (Democrat – Azusa) and Assemblymember Rob Bonta (Democrat – Alameda)

COPY (PDF DOCUMENT) OF SBx2 2 AS PROPOSED WITH 02/22/2016 CONFERENCE COMMMITTEE REPORT (17 PAGES):

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_bill_20160222_proposed.pdf 

COPY (HTML VERSION) OF SBx2 2 AS PROPOSED  WITH 02/22/2016 CONFERENCE COMMITTEE REPORT:

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_bill_20160222_proposed.htm 

COPY OF STATE SENATE FLOOR ANALYSIS (FEB 26 2016) OF BILL:

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_cfa_20160226_140755_sen_floor.html 

COPY OF ASSEMBLY FLOOR ANALYSIS (FEB 25 2016) OF BILL:

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_cfa_20160225_130425_asm_floor.html 

PREVIOUS ACTION 02/22/2016: From Special Session Conference Committee: Be adopted.

LATEST ACTION 02/29/2016: PASSED State Senate.  PASSED Assembly.

NEXT STEPS: Heads to Governor for his certain signature approving the bill.

CDCAN COMMENT:

This bill, because it imposes a new tax (even though the tax is “swapped” with other taxes that would be eliminated that managed care organizations currently required to pay), required 2/3rds vote in both the Assembly (54 votes out of 80 members) and State Senate (27 votes out of 40 members.

Special session bills that are signed into law take effect on the 91st day AFTER the special session is officially adjourned – not just for the day but adjourning or ending the special session.

 

ABx2 1 - MEDI-CAL: DEVELOPMENTAL SERVICES: FUNDING

AUTHOR: Assemblymember Tony Thurmond (Democrat – Richmond) and Senator Jim Beall (Democrat – San Jose)

COPY (PDF DOCUMENT) OF ABx2 1 AS PROPOSED WITH 02/22/2016 CONFERENCE COMMITTEE REPORT (27 PAGES):

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_bill_20160222_proposed.pdf 

COPY (HTML VERSION) OF ABx2 1 AS PROPOSED WITH 02/22/2016 CONFERENCE COMMITTEE REPORT:

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_bill_20160222_proposed.htm 

COPY OF STATE SENATE FLOOR ANALYSIS (FEB 26 2016) OF BILL:

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_cfa_20160226_140321_sen_floor.html 

COPY OF ASSEMBLY FLOOR ANALYSIS (FEB 25 2016) OF BILL:

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_cfa_20160225_130412_asm_floor.html 

PREVIOUS ACTION 02/22/2016: From Special Session Conference Committee: Be adopted.

LATEST ACTION 02/29/2016: PASSED State Senate. PASSED Assembly.

NEXT STEPS: Heads to Governor for his certain signature approving the bill.

CDCAN COMMENT:

This bill also required 2/3rds vote in the Assembly and State Senate because it has a provision (at the end of the bill) that actually makes the necessary appropriations from the State general fund to provide the funding authorized in the bill.

Unlike regular session “urgency bills” and the annual budget bill and budget “trailer bills”, which go into effect immediately upon approval of the Governor, special session bills that are signed into law take effect on the 91st day AFTER the special session is officially adjourned – not just for the day but adjourning or ending the special session.

It is important also to note that the actual provisions regarding when the direct wage pass through and rate adjustments and other funding goes into effect as of July 1, 2016 (for intermediate care facilities/DD, the effective date for the rate increase goes into effect August 1, 2016).

Related Articles