Dan Walters

By Dan Walters
February 22, 2016 – 3:54 PM

  • Gov. Jerry Brown proposes tax on medical organizations
  • It would generate net gain in federal health care aid
  • Republican votes needed and likely in Assembly

Opposition to new taxes has been a bedrock stance for Republican legislators, one they can enforce because taxes require two-thirds legislative votes.

However, Assembly Republicans appear poised to bless a hefty tax on “managed care organizations” that Gov. Jerry Brown wants, because it would secure more federal support of health care for the poor.

“Who benefits from MCO plan? Every Californian! Cutting debt, helping disabled, improving healthcare access, saving CA $1.3B = great package!” Assemblywoman Kristin Olsen, R-Riverbank, tweeted Monday.

It signaled that she and other GOP legislators would support the package that Brown negotiated, although its fate in the Senate is uncertain.

The new tax, replacing one that federal officials had nixed as being too narrow, would be offset by cutting other state taxes on medical insurers and gain the state an estimated $1.3 billion in net federal aid.

One provision would provide more money for services to the developmentally disabled, which has been a Republican demand.

Some Republican factions are dismayed. Jon Fleischman, who runs the influential Flash Report website, has been flogging Republican legislators, saying that voting for the MCO tax would undercut the 2014 GOP effort to gain enough seats to hold the line on taxes.

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