LAO Report on Prop 56 (Tobacco Tax)
The Legislative Analyst recently released a report providing an overview of the Governor’s proposals on implementing Proposition 56, the tobacco tax voters passed last year. They note that the Governor’s budget and allocation of increased tobacco revenues is reasonable and generally consistent with the requirements laid out in the initiative. Furthermore, they also weigh in on the controversy of the use of these funds in the Medi-Cal program (rather than increase provider rates as proponents had intended with these increased revenues) noting only that case law is thin on issues of supplantation regarding initiative raised revenues. And finally, they briefly discuss that if state revenues are more robust in May, the Legislature may have more flexibility in how to spend Medi-Cal revenues.