STATE CAPITOL UPDATE: 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.