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 - Governor Signs MCO Tax Reform and DD Funding Bills

GOVERNOR SIGNS MANAGED CARE ORGANIZATION TAX REFORM AND DEVELOPMENTAL SERVICES FUNDING BILLS

SACRAMENTO, CA [BY MARTY OMOTO, CDCAN - LAST UPDATED 03/02/2016  8:00 AM] -  Governor Brown, as expected, signed the managed care organization tax reform and developmental services funding bills, yesterday.  The provisions of both bills go into effect July 1, 2016, except for some provisions that go into effect a month after that.

As previously reported by CDCAN, the California Legislature passed on February 29th, the Brown Administration’s managed care organization tax reform bill (SBx2 2) by Senator Ed Hernandez (Democrat – Azsua, 22nd State Senate District) and 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].  Both measures required 2/3rds vote of the Assembly (54 votes of the 80 members) and the State Senate (27 votes of the 40 members), meaning some Republican support – at least one Republican vote in the State Senate and at least 3 Republicans in the Assembly – were needed, assuming all Democrats supported the bills.

The Brown Administration and legislative Democrats made it clear that passage of the managed care organization tax reform bill, which would draw down over $1.3 billion in federal matching funds each year for the next three years beginning July 1, 2016, had to happen in order for the second part of the package to happen, which contained the developmental services funding (that also included new funding for intermediate care facilities/developmentally disabled and also distinct part nursing facilities).

Though not mentioned in either the managed care organization tax reform bill or developmental services funding bill, the continued restoration of 7% in services for all persons with disabilities and seniors receiving In-Home Supportive Services, is certain to continue with the passage of the managed care organization tax reform measure.  However that restoration, which went into effect July 1, 2015 and was scheduled to end June 30, 2016 unless another source of federal funding could be identified to off-set the State general fund costs, was likely to continue beyond June 30, 2016 in any event, given the strong almost unanimous support from legislative Democrats in both the State Senate and Assembly.  The issue will officially be resolved as part of the 2016-2017 State Budget process, with continuation of that restoration all but certain – or as certain as anything can be in a California budget process -  according to legislative Democrats in both houses.

In the State Senate, two Senate Republicans, including former Senate Republican Leader Bob Huff, joined the 26 Senate Democrats in supporting SBx2 2, the managed care organization tax reform bill.  In the Assembly a much larger group of eleven Republicans, led by Assembly Republican Leader Chad Mayes, supported the managed care organization tax reform bill, joining 50 Democrats (one Democratic member was absent, and one seat that was held by Democrats remains vacant).

Governor Brown on Monday released a statement following passage of the managed care organization tax reform package praising "…Democrats and Republicans came together today to do what's best for California," said Governor Brown. "This legislation will save money and help millions of people with health care and disability services."

Assembly Speaker Toni Atkins (Democrat – San Diego), said in a statement released following the vote on Monday that “the bipartisan agreement reached by the Legislature and the Governor prevents California from losing $1 billion, helps more Californians access health care, and provides vital funding to address some of the state’s other priorities, including dramatically increasing support for the care of Californians with developmental disabilities – a priority for the Assembly since last year. Baseball season hasn’t even started yet, but we’ve already seen a great triple play. I’d like to thank my colleagues in the Assembly and Senate from both parties, as well as the Governor’s office, for showing Californians what government can do when we work together.”

Senate President Pro Tem Kevin De Leon (Democrat – Los Angeles), said, in a statement released on Monday after the vote that “this bi-partisan and bi-cameral package will provide critical investments to stabilize our healthcare system and keep the promise to care for and support our most vulnerable Californians. This proves again that Sacramento can get business done for the people that sent us here. I want to thank my colleagues from both sides of the aisle and the Governor’s office for their hard work in putting this important tax reform plan together.”

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.

 

CDCAN VOTE RECORD REPORT

The following are the final roll call votes for SBx2 2, the managed care organization tax reform bill and ABx2 1 dealing with developmental services funding including links to the latest copies of both bills (as signed by Governor Brown). Passage of SBx2 2 was crucial because it allowed for the passage of ABx2 1:

 

SBX2 2 - MANAGED CARE ORGANIZATION TAX REFORM

SENATE FLOOR

ACTION 02/29/2016: PASSED State Senate (adopt conference committee report).

VOTE NEEDED TO PASS: 27 (2/3rds of the 40 member State Senate)

TOTAL VOTE: 28 to 11

VOTING YES – 28

DEMOCRATS VOTING YES (26):  Ben Allen, Jim Beall, Marty Block, De León (Senate President Pro Tem), Cathleen Galgiani, Steven Glazer, Isadore Hall III, Loni Hancock, Ed Hernandez (Senate Health Committee Chair), Bob Hertzberg, Jerry Hill, Ben Hueso, Hanna-beth Jackson, Ricardo Lara, Mark Leno (Senate Budget & Fiscal Review Committee Chair), Connie Leyva, Carol Liu, Mike McGuire (Senate Human Services Committee Chair), Tony Mendoza, Holly Mitchell (Senate Budget Subcommittee #3 on Health & Human Services Chair), Bill Monning, Richard Pan, Pavley, Richard Roth, Bob Wieckowski, and Lois Wolk

REPUBLICANS VOTING YES (2):  Anthony Cannella,  and Bob Huff (former Senate Republican Leader)

VOTING NO – 11

DEMOCRATS VOTING NO (0): ***none***

REPUBLICANS VOTING NO (11):  Joel Anderson, Patricia Bates, Tom Berryhill,  Jean Fuller (Senate Republican Leader), Ted Gaines, John Moorlach, Mike Morrell, Jim Nielsen, Sharon Runner, Jeff Stone, and Andy Vidak

ABSTAINING OR ABSENT – 1

DEMOCRATS ABSTAINING OR ABSENT (0): ***none***

REPUBLICANS ABSTAINING OR ABSENT (1):  Janet Nguyen

ASSEMBLY FLOOR

ACTION 02/29/2016: PASSED Assembly (adopt conference committee report).

VOTE NEEDED TO PASS: 54 (2/3rds of the 80 member Assembly)

TOTAL VOTE: 61 to 16

VOTING YES - 61

DEMOCRATS VOTING YES (50):  Luis Alejo, Toni Atkins (Assembly Speaker), Richard Bloom, Susan Bonilla, Rob Bonta (Assembly Health Committee Chair), Cheryl Brown (Assembly Aging and Long Term Care Committee Chair), Autumn Burke, Ian Calderon, Nora Campos, Ed Chau, Kansen Chu, Ken Cooley, Jim Cooper, Matthew Dababneh, Tom  Daly, Bill Dodd, Susan Eggman, Jim Frazier, Cristina Garcia, Eduardo Garcia, Mike Gatto, Mike Gipson, Jimmy Gomez, Lorena Gonzalez, Richard Gordon, Adam Gray, Roger Hernández, Chris Holden, Jacqui Irwin, Reginald Jones-Sawyer, Marc Levine, Patty Lopez, Evan Low, Kevin McCarty, Jose Medina, Kevin Mullin, Adrin Nazarian, Patrick O'Donnell, Bill Quirk, Anthony Rendon (Assembly Speaker-Elect), Sebastian Ridley-Thomas, Freddie Rodriguez, Rudy Salas, Miguel Santiago, Mark Stone, Tony Thurmond (Assembly Budget Subcommittee #1 on Health & Human Services Chair), Philip Ting, Shirley Weber (Assembly Budget Committee Chair), Das Williams, and Jim Wood

REPUBLICANS VOTING YES (11): Catherine Baker, Frank Bigelow, Brian Dahle, Brian Jones, Eric Linder, Brian Maienschein, Chad Mayes (Assembly Republican Leader), Devon Mathis, Kristin Olsen, Donald Wagner, and Marie Waldron

VOTING NO – 16

DEMOCRATS VOTING NO (0): ***none***

REPUBLICANS VOTING NO (16):  Katcho Achadjian, Travis Allen, William Brough, Ling-Ling Chang, Rocky Chávez, Beth Gaines, James Gallagher, Shannon Grove, David Hadley, Matthew Harper, Tom Lackey, Melissa Melendez, Jay Obernolte, Jim Patterson, Marc Steinorth, and Scott Wilk

ABSTAINING OR ABSENT OR SEAT VACANT – 3

DEMOCRATS ABSTAINING OR ABSENT (1):  David Chiu

REPUBLICANS ABSTAINING OR ABSENT (1): Young Kim

VACANT SEAT (1):  31ST Assembly District

 

ABX2 1 – DEVELOPMENTAL SERVICES FUNDING

SENATE FLOOR

ACTION 02/29/2016: PASSED State Senate (adopt conference committee report)

VOTE NEEDED TO PASS: 27 (2/3rds of the 40 member State Senate)

TOTAL VOTE:  40 TO 0

VOTING YES – 40

DEMOCRATS VOTING YES (26):  Ben Allen, Jim Beall, Marty Block, De León (Senate President Pro Tem), Cathleen Galgiani, Steven Glazer, Isadore Hall III, Loni Hancock, Ed Hernandez (Senate Health Committee Chair), Bob Hertzberg, Jerry Hill, Ben Hueso, Hanna-beth Jackson, Ricardo Lara, Mark Leno (Senate Budget & Fiscal Review Committee Chair), Connie Leyva, Carol Liu, Mike McGuire (Senate Human Services Committee Chair), Tony Mendoza, Holly Mitchell (Senate Budget Subcommittee #3 on Health & Human Services Chair), Bill Monning, Richard Pan, Pavley, Richard Roth, Bob Wieckowski, and Lois Wolk

REPUBLICANS VOTING YES (14):  Joel Anderson, Patricia Bates, Tom Berryhill, Anthony Cannella, Jean Fuller (Senate Republican Leader), Ted Gaines, Bob Huff (former Senate Republican Leader), John Moorlach, Mike Morrell, Janet Nguyen, Jim Nielsen, Sharon Runner, Jeff Stone, and Andy Vidak

VOTING NO – 0

ABSTAINING OR ABSENT – 0

ASSEMBLY FLOOR

ACTION 02/29/2016: PASSED Assembly (adopt conference committee report)

VOTE NEEDED TO PASS: 54 (2/3rds of the 80 member Assembly)

TOTAL VOTE:  78 TO 0

VOTING YES – 78

DEMOCRATS VOTING YES (50):  Luis Alejo, Toni Atkins (Assembly Speaker), Richard Bloom, Susan Bonilla, Rob Bonta (Assembly Health Committee Chair), Cheryl Brown (Assembly Aging and Long Term Care Committee Chair), Autumn Burke, Ian Calderon, Nora Campos, Ed Chau, Kansen Chu, Ken Cooley, Jim Cooper, Matthew Dababneh, Tom  Daly, Bill Dodd, Susan Eggman, Jim Frazier, Cristina Garcia, Eduardo Garcia, Mike Gatto, Mike Gipson, Jimmy Gomez, Lorena Gonzalez, Richard Gordon, Adam Gray, Roger Hernández, Chris Holden, Jacqui Irwin, Reginald Jones-Sawyer, Marc Levine, Patty Lopez, Evan Low, Kevin McCarty, Jose Medina, Kevin Mullin, Adrin Nazarian, Patrick O'Donnell, Bill Quirk, Anthony Rendon (Assembly Speaker-Elect), Sebastian Ridley-Thomas, Freddie Rodriguez, Rudy Salas, Miguel Santiago, Mark Stone, Tony Thurmond (Assembly Budget Subcommittee #1 on Health & Human Services Chair), Philip Ting, Shirley Weber (Assembly Budget Committee Chair), Das Williams, and Jim Wood

REPUBLICANS VOTING YES (28):  Katcho Achadjian, Travis Allen, Catherine Baker, Frank Bigelow, William Brough, Ling-Ling Chang, Rocky Chávez, Brian Dahle, Beth Gaines, James Gallagher, Shannon Grove, David Hadley, Matthew Harper, Brian Jones, Young Kim, Tom Lackey, Eric Linder, Brian Maienschein, Chad Mayes (Assembly Republican Leader), Devon Mathis, Melissa Melendez, Jay Obernolte, Kristin Olsen, Jim Patterson, Marc Steinorth, Donald Wagner, Marie Waldron, and Scott Wilk

VOTING NO – 0

ABSTAINING OR ABSENT OR VACANT SEAT – 2

DEMOCRATS ABSTAINING OR ABSENT (1):  David Chiu

REPUBLICANS ABSTAINING OR ABSENT (0): ***none***

VACANT SEAT (1):  31ST Assembly District

 

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)

LATEST COPY (PDF DOCUMENT) OF SBx2 2 AS SIGNED BY GOVERNOR – MARCH 1 2016 (12 PAGES):

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_bill_20160301_chaptered.pdf 

COPY (HTML VERSION) OF SBx2 2 AS SIGNED BY GOVERNOR – MARCH 1 2016:

http://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sbx2_2_bill_20160301_chaptered.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 02/29/2016: PASSED State Senate.  PASSED Assembly.

LATEST ACTION 03/01/2016: SIGNED by Governor (Chapter 2, Statutes of 2016).

NEXT STEPS: Provisions of this bill go into effect July 1, 2016, though federal approval of the State’s managed care care organization tax reform proposal is still required.  That federal approval (or denial) is not tied to the implementation of the developmental services funding piece in ABx2 1.

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 (though the actual provisions in the bill may have later effective dates) on the 91st day AFTER the special session is officially adjourned.  Neither house adjourned the second special session dealing with health care funding on Monday – though could do so on Thursday or in the coming weeks.

 

ABx2 1 - MEDI-CAL: DEVELOPMENTAL SERVICES: FUNDING

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

LATEST COPY (PDF DOCUMENT) OF ABx2 1 AS SIGNED BY GOVERNOR – MARCH 1 2016 (20 PAGES):

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_bill_20160301_chaptered.pdf 

LATEST COPY (HTML VERSION) OF ABx2 1 AS SIGNED BY GOVERNOR – MARCH 1 2016:

http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_bill_20160301_chaptered.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 02/29/2016: PASSED State Senate. PASSED Assembly.

LATEST ACTION 03/01/2016: SIGNED by Governor (Chapter 3, Statutes of 2016).

NEXT STEPS: Provisions of the bill take effect July 1, 2016 (except for some provisions that go into effect a month later)

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.

Special session bills that are signed into law take effect (though the actual provisions in the bill may have later effective dates) on the 91st day AFTER the special session is officially adjourned.  Neither house adjourned the second special session dealing with health care funding on Monday, February 29th  – though could do so on Thursday or in the coming weeks.

It is important also to note that the actual provisions in the bill 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)

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