SB562: California Single-Payer Health Care (Why 80% of Colorado Voters said “NO”)

stevenstyles wateremarked belator media (28 of 10)

In November 2016, approx 80% of Colorado voters said “no” to Amendment 69–dubbed “Colorado Care”–a plan which would have reverted the state’s health care to a what is known as a singe-payer system.

Employers would have had to pay a new tax of about 7 percent of workers’ wages. Employees would have had a payroll tax of about 3 percent. There would have been no deductibles or co-pays. The funds would have be transferred into a separate authority run by an elected board of directors.
(Source: CBS Denver Article-see link in above paragraph)

According to the plan’s critics, ColoradoCare’s estimated $36 billion budget would have dramatically exceeded state government spending. Interestingly, even fervent well-attended rallies from single-payer advocate Bernie Sanders could not turn public opinion away from their wallets.

Apparently, even heavily-progressive minds are equally protective of their personal health care plans. According to 2014 census information, Colorado has a population of approximately 5.37 million. Utilizing the provided figures, ColoradoCare’s estimated budget breaks down to around $24,000 in costs per person, annually… which–on paper–does have the appearance of being the ‘Maserati of health-care plans’.

SB562–mentioned in an article earlier this year–(set for committee hearing April 26th) is a single-payer health plan, for all Californians, devised by members of the California State Senate.

According to 2016 budget figures, California’s overall medicaid (Medi-Cal) healthcare costs are approximately $41 billion ($19 billion paid from state funds, $22 billion paid from federal) to cover approximately 13.5 million caseloads (people). That breaks down to about $3,057 per person–per year–which is considerably less than ColoradoCare estimated to pay for their citizens… and is even less when one takes into account that 38 million Californians (more than double the current caseload) will be covered if SB562 is made into law. If no further federal or state funds are procured to help cover that increase, then California’s healthcare budget will reduce down to $1,078 per person.

(S) CA Assembly SB1 4-6-2017 (3 of 1)

Even more disconcerting, if the Trump Administration goes through with its implied threat of withdrawing federal funding from sanctuary areas–which includes the entire state of SB54 is enacted by the State Assembly–then the amount of funding available per person in California may be cut in half.

In an off-the-record conversation with a Covered California employee, I brought up SB562; the employee did not even know about the legislation, but when the details were described, he chuckled.

“Oh, that will never go through,” he said with humor. “Californians with high-tier health plans will never allow that to happen.”

Article by L. R. Styles; Photographer: Steven Styles/ Belator Media

California Gas Taxes: Existing & SB1 $$$

(L) Jackson 10 4-6-2017 (4 of 1)
Can Californians afford an extra $10 a month? Apparently, we can according to a majority of our state legislators. Both Senate and Assembly passed SB1 yesterday in dual marathon sessions which lasted late into the night, despite impassioned opposition on both sides of the aisle.

(S) Senate Floor SB1 4-6-2017 (10 of 1)
CA Senator Jim Nielsen – Photographer: Steven Styles/ Belator Media

As of this morning, SB1 was on the governor’s desk… awaiting signature.

The bill was introduced by Senator Beall, with principal coauthor Assembly Member Frazier, coauthors: Senators Atkins, Dodd, Hertzberg, Hill, McGuire, Mendoza, Monning, Skinner, Wieckowski, and Wiener and Assembly Members Low, Mullin, and Santiago.

(S) Senate Floor SB1 4-6-2017 (12 of 1)
CA Senators Beall & Weiner, Senate floor (SB1) – Photographer: Steven Styles/ Belator Media

Governor Brown–as well as several California legislators–have been campaigning hard for Senate Bill 1 a 10-year plan which would boost gasoline excise taxes for the first time in more than two decades, an increase of 43% (or, about .12 cents per gallon) a percentage which is slated to rise automatically with inflation. The aforementioned plan estimates that the average motorist will pay less than $10 per month more than they already do.

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Governor Brown  & CA Senate Pro-Tem DeLeon campaigning for SB1

The plan also includes a ‘sliding fee’ on vehicles, with owners of cheaper vehicles paying less. The fee which is separate from annual vehicle registration fees will range from $25 a year–for vehicles worth less than $5,000–to $175, for cars worth $60,000 & higher.

Minority state senators aren’t the only ones who think the gas tax is unnecessary. According to Jon Coupal, president of the Howard Jarvis Taxpayers Association, the state has plenty of money that could be “redirected to transportation funding” without the need for raising state-level taxes, which are already among the highest in the nation.

(S) Senate Floor SB1 4-6-2017 (4 of 1)
4-6-2017 on the floor of the California Senate (SB1) – Photographer: Steven Styles/ Belator Media

Jon Coupal suggested that the state “redirect money” from various floundering projects, as well as reduce department staffing.

It is unnecessary and insulting to the taxpayers of the state of California… there is so much money sloshing around in California that could pay for this, we don’t need another tax.  – Jon Coupal, Howard Jarvis Taxpayers Association

(S) Senate Floor SB1 4-6-2017 (6 of 1)
4-6-2017 CA State Assembly floor (SB1) – Photographer: Steven Styles/ Belator Media

In a 2015 San Jose Mercury News Q&A article, traffic & transportation journalist Gary Richards answered a reader’s question regarding how much of California’s gas taxes actually go to roads:

… Most gas tax money is earmarked for transportation. The state has been diverting $100 million of the $5 billion raised annually to the general fund, according to the Howard Jarvis Taxpayers Association, along with $1 billion in annual truck weight fees to pay debt on general obligation bonds.

  • About 85 percent of the federal gas tax of 18.4 cents a gallon goes to highways, and the remaining 15 percent goes for transit.
  • On the state side, our 48.6 cents-a-gallon tax brings in around $5 billion a year. Of the total, about 57 percent goes to highways, 36 percent for cities and counties (for various needs, mostly streets and roads) and 7 percent for transit. Put it together, and you get a 90/10 split between roads and streets versus transit. (Source: Gary Richards, San Jose Mercury News)

According to the most recent statistical data available on the Board of Equalization website (for fiscal year 2014-2015) California took in over $5.3 Billion in Fuel (Excise) Taxes. There are several mentions of the “Fuel Tax Swap” in the report, which comes to us care of a former governor:

(S) Global Warming Solutions Act commemoration 10-5-2016 (16 of 1)
Photographer: Steven Styles/ Belator Media

In March 2010, Governor Arnold Schwarzenegger signed two fuel tax measures (AB x8 6 and SB 70), commonly referred to as the fuel tax swap, which adjusted the rates of the sales and excise tax on gasoline, effective July 1, 2010. The fuel tax swap legislation was designed to be revenue neutral, ensuring overall state taxes paid by consumers at the pump are the same as they would have paid under the prior tax structure.

Thus, the fuel tax swap legislation does not produce a net revenue gain in overall state taxes paid at the pump. The legislation mandated the Board of Equalization adjust the excise tax rate every year by March 1. The new rate is effective July 1 of each year.

(S) Senate Floor SB1 4-6-2017 (8 of 1)
4-6-2017 CA Senators Leyva & Weiner on Floor (SB1) – Photographer: Steven Styles/ Belator Media

So, how much of the money “earmarked” for transportation actually goes to fixing roads? According to the Legislative Analysts Office website, under 1/3 of the money generated by existing gas taxes. For the 2016-2017 budget only $1.6 billion was budgeted  to “maintain and rehabilitate core aspects of the state highway system—pavement, bridges, and culverts—as well as local roads.”

(S) Gov Brown Infastructure Press Conference 2017 (6 of 2)
Governor Brown, 2017 infrastructure press conf. Photographer: Steven Styles/ Belator Media

So, where’s the other $3.8 billion in existing gas tax revenues going, if they’re not being spent on road, highway, bridge & culvert maintenance?

Gas tax revenue aside, let’s talk about where our vehicle registration fees go. Again, the Legislative Analyst’s office supplied the most concise answer that I could find:

The MVA (Motor Vehicle Account), which receives most of its revenues from vehicle registration and driver license fees, primarily supports CHP and DMV. Due to expenditures outpacing revenues, the MVA has faced an operational shortfall in recent years and will continue to experience a shortfall in 2016–17, absent corrective actions. (Source: Legislative Analyst’s Office website)

In order to address the above-mentioned “shortfall”–and to support “proposed new expenditures” the Governor proposed to raise the vehicle registration fee by $10 for the 2016-2017 budget and index the “fee” to inflation. Even with these corrective measures, in the same report the LAO predicts that the MVA will be “barely balanced” and is “likely face an operational shortfall” in the tens of millions by 2019–20.

Asking taxpayers to pay hundreds of dollars a year in more taxes when we’ve not spent one dime more on transportation from the general fund in years makes no sense. We have plenty of money … we just need to spend it on the right priorities.                      State Sen. Jeff Stone, R-Temecula

(S) Senate Floor SB1 4-6-2017 (13 of 1)
4-6-2017 CA Senator Jeff Stone – Photographer: Steven Styles/ Belator Media

There is a silver lining in the loss of all this green: under SB1 “zero-emission” vehicles will now have to pay an annual fee of $100 to help pay to maintain the roads they shared alongside gasoline-fueled vehicles.

Article by L. R. Styles. Photographer: Steven Styles/ Belator Media

Governor Warned California Lawmakers: Refrain from Massive New Spending

(S) Governor Brown infactructure press conferece 2017 (12 of 1)-2
Governor Brown – Photographer: Steven Styles/Belator Media

Back in May 2016, Governor Jerry Brown urged lawmakers to refrain from any massive new spending programs, due to the possibility of an economic slowdown or recession.

“Right now, the surging tide of revenue is beginning to turn,” Governor Jerry Brown said,  at a press conference where he announced a revised $122.2 billion state budget and potential deficits ahead due to expiring tax increases.

Perhaps the governor’s admonitions for less spending were prophetic, given President Trump Administration’s executive order to cut off funding to sanctuary cities. State democrats have decried the idea and some media outlets report that lawmakers may be considering withholding state tax revenues from Washington DC if federal monies are withheld from The Golden State.

On top of the usual state expenses, the governor’s bond accountability web-page has posted an alarming need for $500 billion to be spent on California’s deteriorating infrastructure:

California faces over $500 billion in infrastructure needs to meet the demands of a population expected to increase by 23 percent over the next two decades.

(S) Gov Brown Flood Press 2-24-2017 (6 of 1)
Photographer: Steven Styles/ Belator Media

In November 2006, the voters approved the first installment of that 20-year vision to rebuild California by authorizing a series of general obligation bonds totaling $42.7 billion, however, the same bond accountability website also points out that “if California is to maintain its highly valued quality of life and continue its economic growth” that the consequences will be the governor proposing an additional $42.3 billion of bonds to fund infrastructure improvements over the next decade.

In spite of this apparently ‘immediate’ need for infrastructure spending–and Governor Brown’s May warnings for fiscal conservancy–several 2017 legislative bills, from both Assembly & Senate appear to call for even more spending while simultaneously thumbing their nose at the federal government. SB562, for example, which would revamp the state’s health care, would add billions to the state’s budget annually by more than doubling the current Medi-Cal caseload, even more if Trump withhold federal funds, which pay a little over half of MediCal’s current annual cost.

(S) President Trump Reno NV 11 2016 (11 of 1)
Photographer: Steven Styles/ Belator Media

Another costly plan, unveiled earlier this month by state Democrats, is to make tuition & living costs free for state college students.

“California is taking the boldest step in the nation for making college debt-free,” Assembly Speaker Anthony Rendon, D-Paramount, said in a recent press conference.

The cost for the ‘free college’ program would come at a price tag of $1.6 billion per year, phased in over five years and would be paid for using money from the state’s General Fund, lawmakers say. Proponents say existing tax revenues will cover the cost, but other projections to provide universal college came in at a much higher cost of $3.3 billion annually.

Question: Can California afford to pick a fight with Uncle Sam?

California receives more federal money than any other state.  According to the California Budget & Policy Center, more than 1/3 of California’s annual budget is made up of Federal Funds:

The current state budget includes nearly $96 billion in federal funds for 2016-17, the fiscal year that began last July 1. This is more than one-third (36 percent) of the total state budget, which also includes more than $170 billion in state funds for the current fiscal year. – Fact Sheet, December 2016 · By Scott Graves

Just under one third of federal funds allocated to California, or $102 billion, go to retirement benefits, including Social Security payments and veterans benefits. Less than one third, or $99 billion, was spent on non-retirement benefits, like Medicare, food assistance, and unemployment insurance.

2nd Question: if federal funds are indeed withheld from California, then who will cover the shortfall for our current spending, let alone all the new spending pending in the legislature?

Article by L. R. Styles. Photographer: Steven Styles/ Belator Media