Anthony Wright, executive director of Health Access California, a statewide consumer health care advocacy group, said the state could invest $5 billion to achieve universal health coverage by expanding the state’s Medicaid program, known as Medi-Cal, to low-income residents regardless of their immigration status and by offering bigger subsidies to working families to purchase coverage through Covered California, the state’s health insurance exchange.
So far, Newsom is proposing a limited expansion of Medi-Cal coverage to young adults ages 19 to 25 regardless of their legal status. The state currently covers children from poor families. He’s also supporting a state individual mandate to provide insurance subsidies but that plan would only generate an estimated $700 million.
“It would take some general fund investment but it’s in the realm of not just aspirational, but achievable,” Wright said.
Split Roll on the Horizon
Currently, the only measure on the 2020 ballot that would bring in a significant new stream of revenue is the Schools and Communities First initiative, which would assess commercial and industrial property at market value to bring in between $6.5 billion and $10.5 billion a year for schools and local governments.
But Californians are divided on the so-called split roll change to Proposition 13. According to the Public Policy Institute of California, less than half (47 percent) favor it, 43 percent oppose and 10 percent don’t know.
“Majorities of Californians continue to say that Proposition 13 has been a good thing for California, while the split roll property tax reform draws mixed reviews across party lines,” said PPIC president and CEO Mark Baldassare.
Helen Hutchison, president of the League of Women Voters of California, which is supporting the initiative, is casting the measure as closing a tax loophole on a small number of businesses that have held onto property for decades. Think Disneyland and Chevron.
She view the tax proposals in the Legislature as complementary.
“I actually think it’s positive that we have a focus on taxes and fairness,” Hutchinson said. “We can be another piece of what the Legislature is trying to do.”
If supporters can sell that to voters, it would reap new ongoing funding for schools and local governments and help insulate against the volatility of the stock market at the state level.
What Is the Tax Strategy?
Unlike Brown, Newsom is open to entertaining the idea of updating California’s tax system, which is outdated and prone to boom and bust cycles. He spoke about the possibility when unveiling his January budget and his chief of staff, Ann O’Leary, said at a recent PPIC talk that although it’s early still, policymakers will have to think hard in order to secure stable funding for education.
Los Angeles-area Sen. Bob Hertzberg, who has been among the Democrats leading the charge on tax reform, has a placeholder bill in SB 522 if the governor entertains broad tax policy changes.
But Brown has left Newsom in a difficult corner, said former Assemblyman Mike Gatto of Los Angeles. Brown already passed taxes during his final two turns as governor and even though he could have tried to negotiate a wholesale restructuring of California’s manufacturing-based tax code to better reflect today’s service economy, he declined to tackle it on his way to retirement.
“I could not think of anybody in this state except for Jerry Brown and the fact that he shirked that shows how difficult it is. And it’s also a disappointment, frankly,” Gatto said. “I give major props to Mr. Newsom in that he has not shied away from these discussions. He’s got something Jerry Brown never really had, which is optimism. And sometimes optimism can get you pretty far.”