Governor agrees to back a tobacco tax increase as a way of financing new universal health coverage. By Aurelio Rojas - arojas@sacbee.com
Gov. Arnold Schwarzenegger has scrapped his proposal to lease the state lottery to help finance a universal health care plan and agreed instead to Speaker Fabian Núñez's proposal to raise taxes on tobacco products, officials disclosed Friday.
Schwarzenegger also has agreed to establish a higher sliding scale fee on employers than he previously had to help finance the $14 billion plan.
The new proposal calls for requiring businesses, depending on their size, to spend 1 percent to 6.5 percent of their payroll on health care or pay into a state fund.
The governor had proposed that employers pay zero to 4 percent while Núñez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland, had countered with 7.5 percent.
Aides to the governor and speaker confirmed the new developments as the Assembly prepares to vote Monday on the proposed health care legislation, but said the size of the proposed tobacco tax is being negotiated.
Aides to Núñez said the speaker wants to add $2 to the current 87-cents-a-pack tax on cigarettes, while the governor is proposing $1.50.
Aaron McLear, a Schwarzenegger spokesman, would not comment on the specifics of the negotiations, but confirmed that leasing the lottery is no longer part of the governor's plan.
"We have agreed to tobacco being part of the financing agreement that will go before voters," McLear said. "We're still negotiating the size and the terms."
Another stumbling block may be Perata's opposition to the tobacco tax, which he predicts will prompt the tobacco industry to mount an extensive campaign to defeat a ballot measure to provide funding for health care.
"The tobacco tax is flawed only because big tobacco has a huge amount of money to go through at this thing," Perata said Thursday after leaving a meeting in the Governor's Office.
A $2.60-a-pack increase, sponsored by California's hospital industry and health care advocates, was opposed by Schwarzenegger and rejected by voters last year.
On Friday, a spokeswoman for the Senate leader was waiting to see the language of the legislation the Assembly is scheduled to vote on Monday.
"We understand they are still making changes to the plan and (have) not settled on the amount of the tobacco tax," said Alicia Trost, a Perata spokeswoman.
With the window closing on his year-old campaign for universal health care, the governor visited a Southern California hospital Friday to tout the billions in federal dollars he said his plan would attract.
Some lawmakers, including Perata, believe the Legislature should weigh the service cuts that will have to be made because of the state's projected $14 billion deficit before it tackles health care.
But the governor told reporters during a visit to Long Beach Memorial Medical Center that "health care reform is essential" to fixing the state's fiscal imbalance because his plan would increase matching funds from Medicaid.
California ranks last in the nation in reimbursement rates from the federal program for the poor and disabled, called Medi-Cal in the state.
"Our plan will fix the problem because we will raise Medi-Cal rates," said Schwarzenegger, whose plan calls for leveraging more state spending on health care to increase federal matching funds and provide $4 billion more annually for Medi-Cal.
The governor said Long Beach Memorial lost $28 million last year alone because of uncompensated Medi-Cal services.
"The good news is that they're still treating the patients, because many of the hospitals have stopped treating the patients," he said.
In a move that reflects growing frustration over insufficient state reimbursement for health care, Sutter Roseville Medical Center this month severed its contract with Medi-Cal.
The decision means Medi-Cal patients no longer are being admitted to the 270-bed hospital for elective surgeries.
Sutter Roseville was the 15th hospital in the state to discontinue its Medi-Cal contract since 2002; two of those hospitals have since renegotiated their contracts with the state.
This message has been edited. Last edited by: NorcalMark,
So if SCHIP goes through it will mean the end of tobacco for everyone in California unless people smuggle it in. Too bad Mark, I know your family has been in the tobacco business for quite some time.
It will also herald the end of the tobacco industry in the USA. Once that happens SCHIP will be out of business again.
Doc ***** Tobacco is a filthy weed, I like it...
SNOB Member 1033 1/3
Posts: 9574 | Location: New York City | Registered: May 02, 2002
I don't know why anyone would want to live in CA anymore.
"Cuban seed tobaccos grown in Nicaragua and Cuba. The wrapper would be from Cuba. The binder leaves would be from Nicaragua. For the ligero tobacco in the filler, he would use two types, one from Esteli and the other from Jalapa in Nicaragua. The other filler components, seco and viso, would come from Cuba, the former from Villa Clara, the latter from Pinar del Rio. That Cigar, he says with pride, would score 100 points." -Don Pepin Garcia
Posts: 956 | Location: Here | Registered: December 11, 2006
Wow i wonder what is going to happen when people either stop smoking all together.Or as has been said here smuggle tobacco into the state.What i mean to say is when there is nothing to tax.Where will the revenue come from.Wait i got it maybe the beloved Governor himself could donate a portion of his millions of net worth to the cause.LOL
"Resistance to tyranny is obedience to God" -Thomas Jefferson
"The tree of freedom must be nurtured from time to time with the blood of its patriots" -Thomas Jefferson
"When the Government Fears the People, There is Liberty; When the People Fear the Government, There is Tyranny." - Thomas Jefferson
Posts: 4745 | Location: Reggio di Calabria, Italy / New York United States | Registered: July 12, 2007
That's total rubbish. Might as well try to stock up on the good stuff before those prices shoot up too.
--------------------------------------------- "The funny thing about regret is that it's better to regret something you have done than to regret something you haven't done."
Posts: 56 | Location: east bay, california | Registered: December 10, 2007
Let me start off by saying, I'm sorry if this is a stupid question.
Would it be at all possible too order your tobacco products online? I know there are plenty of online shops that sell cigarettes, quite cheap actually. I personally do not smoke cigarettes, just the occasional cigar. I'm just not sure if thats against state tax regulations or what. I just figured that'd be a good alternative too the in-state tax problem.
That is really too bad that the people we have representing cigar smokers in politics are the ones that can afford any amount and type of cigar they'd like.
Originally posted by PatrickM: Let me start off by saying, I'm sorry if this is a stupid question.
Would it be at all possible too order your tobacco products online? I know there are plenty of online shops that sell cigarettes, quite cheap actually. I personally do not smoke cigarettes, just the occasional cigar. I'm just not sure if thats against state tax regulations or what. I just figured that'd be a good alternative too the in-state tax problem.
Sure it would! But the reason I am pissed is I am a b&m retailer.
Originally posted by Extensioncord: Is it just me, or have Republicans taken back the "Tax and Spend" label from the Democrats?
Ron Motherfukking Paul in 08 Baby!
Seriously, there must be something in the water or something out in California. I don't care how nice the weather is, I'm staying away.
This true in part. Both the Republicans and Democrats spending is way out of control. There are very few true conservatives left in the government. That is why I write in Pat Buchanan for every election.
Posts: 2259 | Location: WI | Registered: November 16, 2007
