Assembly Budget Subcommittee No. 1 Challenges the Administration’s use of Proposition 56 Revenues

On Monday, the Assembly Budget Subcommittee No. 1 on Health and Human Services, challenged the Administration’s use of revenues from Proposition 56 (Tobacco Tax) to cover growth in Medi-Cal costs. Members of the Subcommittee inquired about the Department of Finance and the Department of Health Care Services’ plans to meet the growth in Medi-Cal costs prior to the passage of Proposition 56 this past November. The Administration noted their interpretation of not supplanting funds, noting FY 2016-17 as the base year and that the growth in Medi-Cal costs are above the level of costs experienced in FY 2016-17, thereby allowing Proposition 56 revenues to be used to meet these costs.

Several organizations have expressed concerns with the Administration using these revenues to meet current Medi-Cal obligations, versus increasing provider rates.

Monday’s agenda can be viewed here.

No actions were taken by the Subcommittee; all items were held open.