Politichaos

Resolving the Ruckus

Proposition 52

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Medi-Cal Hospital Fee Program.

initiative constitutional amendment & statute

*PASSED*

Official Summary

Extends indefinitely an existing statute that imposes fees on hospitals to fund Medi-Cal health care services, care for uninsured patients, and children’s health coverage.

Fiscal Impact: Uncertain fiscal effect, ranging from relatively little impact to annual state General Fund savings of around $1 billion and increased funding for public hospitals in the low hundreds of millions of dollars annually.

Notes

  • extends current statute indefinitely - Hospital Quality Assurance Fees imposed on hospitals to obtain federal matching funds (since 2009, set to expire 2018)
    • 2015-2016 fees = $4.6 B paid by hospitals (used as matching funds for federal funding), $3.7 B paid to hospitals by Medi-Cal, $4.4 B paid to hospitals by federal govt; State General Fund savings $850 M
  • Federal government will need to approve extension for hospitals to continue to receive federal funding
    • if federal extension does not happen, this fee goes away
  • fee could end only by 2/3 vote of ballot proposition measure, not by legislature or simple majority
  • Constitutional Amendment portion: fees do not count as revenue toward Prop 98 funding requirement (school funding based on general fund monies brought in)

Proposition 55

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Tax Extension to Fund Education and Healthcare.

"California Children's Education snd Health Care Protection Act of 2016"

initiative constitutional amendment

*PASSED*

Official Summary

Extends by twelve years the temporary personal income tax increases enacted in 2012 on earnings over $250,000, with revenues allocated to K–12 schools, California Community Colleges, and, in certain years, healthcare.

Fiscal Impact: Increased state revenues—$4 billion to $9 billion annually from 2019–2030—depending on economy and stock market. Increased funding for schools, community colleges, health care for low–income people, budget reserves, and debt payments.

Notes

  • extends Prop 30 tax increase on taxable income for singles over $263k, joint over $526k, HOH over $340k:
    • extra 1% for $263k-$316k(s), $526k-$632k(j)
    • extra 2% for $316k-$526k(s), $632k-$1,053k(j)
    • extra 3% for over $526k(s), $1,053k(j)
  • original hike enacted in 2012, set to expire 2018, this extends it through 2030
  • affects approx 1.5% of taxpayers
  • Allocates revenues: 89% K-12 schools, 11% California Community Colleges
  • funding for health care up to $2 Billion, depending on whether general fund revenues exceed education spending plus cost of government programs in place on Jan 1, 2016. If so, 50% of the excess (up to $2 B) would go to Medi-Cal. The rest would go to budget reserves, debt payment and programs enacted since Jan 1, 2016.
  • Prop 30 sales tax hike of .25% will expire at the end of 2016

Proposition 56

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Cigarette Tax to Fund Healthcare, Tobacco Use Prevention, Research, and Law Enforcement.

"California Healthcare, Research and Prevention Tobacco Tax Act of 2016"

initiative constitutional amendment & statute

*PASSED*

Official Summary

Increases cigarette tax by $2.00 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine.

Fiscal Impact: Additional net state revenue of $1 billion to $1.4 billion in 2017–18, with potentially lower revenues in future years. Revenues would be used primarily to augment spending on health care for low–income Californians.

Notes

  • tax on cigarettes, tobacco products (cigars, chewing tobacco, products containing at least 50% tobacco) and e-cigarettes (battery operated devices that turn liquid that may contain nicotine into a vapor)
  • tax is actually paid to the Board of Equalization by the distributor, to receive the CA tobacco tax stamp, and they pass the cost on to the consumer
  • current CA cigarette tax is 87 cents/pack cigarettes, equivalent to $1.37 for other tobacco products; national average is $1.60
  • current federal tax on cigarettes is $1.01/pack
  • plus sales tax (7.5%-10%)
  • average cost $6/pack
  • in 2013, 12% of CA adults smoke cigarettes, 4% e-cigarette users
  • adds e-cigarettes in definition of "other tobacco products"
  • also adds excise tax on distributors of $0.10 for each cigarette, $2.50 for products with '25' CA cigarette stamp, $2 for '20', $1 for '10' (including inventory on the first day of the quarter after this is enacted)
  • use of funds:
    • replace revenues lost due to lower tobacco consumption (1988's Prop 99, 1998's Prop 10, state and local sales tax decreases)
    • 5% max - cost to administer the tax
    • $30 M - law enforcement of tobacco-related laws
    • $6 M - board to enforcetobacco-related laws
    • $6 M - DPH for tobacco-related law enforcement support
    • $6 M - Attorney General for tobacco-related law enforcement
    • $40 M - UC physician training
    • $30 M - DPH dental disease prevention education
    • $400 k - adit of agencies receiving funds
    • 82% of remaining - Medi-Cal
    • 11% of remaining - California Tobacco Control Program - DPH - tobacco prevention and control programs
    • 5% of remaining - UC tobacco related disease research
    • 2% of remaining - school programs to prevent and reduce use of tobacco products by young people
  • exempt from Prop 98 education funding requirement

Proposition 60

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Adult Films, Condoms, Health Requirements.

"California Safer Sex in the Adult Film Industry Act"

initiative statute

*Failed*

Official Summary

Requires adult film performers to use condoms during filming of sexual intercourse. Requires producers to pay for performer vaccinations, testing, and medical examinations. Requires producers to post condom requirement at film sites.

Fiscal Impact: Likely reduction of state and local tax revenues of several million dollars annually. Increased state spending that could exceed $1 million annually on regulation, partially offset by new fees.

Notes

  • requires adult film producers to obtain state health license (fee of $100, 2 year period) and provide training
    • if no license, penalty of $25/day first time, $50/day repeat violation
  • imposes liability on producers for violations, on certain distributors, on performers if they have a financial interest in the film involved, and on talent agents who knowingly refer performers to noncomplying producers
    • financial penalties: up to $50,000 plus attorney fees to performer with no financial interest if producers did not comply
  • permits state, performers, or any state resident to enforce violations, and if Cal/OSHA does not respond in specific timeframe, that person could bring a civil action against film producer
    • if they win the suit, they receive compensation for legal fees and 25% of the penalties, with state receiving 75%
    • $1000-$7000 if didn't post all the required info first time, $7000-$15,000 for repeat violation
    • $70,000 by producer if they knowingly make a false statement
    • and more...
  • Cal/OSHA time from reported violation to completed investigation expanded from 6 months to a year
  • within 10 days of beginning of filming, the following must be posted: address(es) of filming, dates of filming, producer contact info, custodian of records contact info, talent agent contact info, certification that condoms are being used, STI tests have been offered
  • Cal/OSHA already requires employers to provide,and ensure that their employees use protective equipment to prevent contact with certain bodily fluids in the workplace, specifically use condoms during sex on adult film sets
  • in 2014-2015, 4 production companies were cited for violation of condom regulation

Proposition 61

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State Prescription Drug Purchases. Pricing Standards.

"California Drug Price Relief Act"

initiative statute

*Failed*

Official Summary

Prohibits state from buying any prescription drug from a drug manufacturer at price over lowest price paid for the drug by United States Department of Veterans Affairs. Exempts managed care programs funded through Medi–Cal (75% of enrollees).

Fiscal Impact: Potential for state savings of an unknown amount depending on (1) how the measure's implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.

Notes

  • applies to any program where the state agency is the ultimate payer for a prescription drug, even if the state agency does not itself by the drug
  • state pays for prescription drugs through: Medi-Cal, Public Employees Retirement System, University of California, Dept of Corrections, Public Health (underinsured HIV -positive individuals), State Hospitals, Developmental Services (developmental center residents), California State University
  • VA maintains a public database that lists prices paid for most drugs, but some are not listed, pursuant to confidentiality agreements with drug manufacturers
  • Drug expenditures in state programs for 2014-2015: $3.8 Billion, of which the State pays about half
  • Nationally, prescription drug spending increased 800% between 1990 and 2013
  • to be implemented by July 1, 2017