With state revenues growing faster than previously expected, Brown said Thursday that he wants to pay down $436 million in UC’s pension debts over the next three years and boost spending by $3,000 for each of the state’s 6 million K-12 students. Additional money will also be given to public schools with large numbers of low-income students.
The administration estimated the average household benefit at $460 per year, with a maximum credit of $2,653.
With one in three Californians — more than 12 million — now covered by Medi-Cal, payment reform is a huge issue. Medi-Cal rates rank 48th in the nation. It pays about half what Medicare does for primary care. Supporters say a hike in rates would stabilize provider networks and boost access to care for people on the Medi-Cal program.
The Obamacare exchange had hoped to enroll 1.7 million Californians this spring, but the final tally was about 1.4 million, virtually the same as last year. Now its board is considering a plan to cut spending next fiscal year by 15 percent — or $58 million — compared to the current fiscal year. It also plans to slash its significant marketing and outreach budget by 33 percent, to $121.5 million.
Those are the simple, if harsh, facts of life in what used to be the Golden State. It’s a great place to live if you can afford it, but it’s a daily struggle if you can’t – and too many can’t.
The windfall is driven by a jolt of personal income taxes, as California bounds through its economic recovery. Income taxes have come in $2.7 billion above projections.
About 15 percent of the 561,000 pensioners in the California Public Employees’ Retirement System live their golden years outside the Golden State, according to a first-of-its-kind analysis of fund data by The Sacramento Bee. The vast majority have flocked to low-tax or no-tax states, creating a veritable river of cash that flows out of California and into cities such as Las Vegas; Reno; Tucson, Ariz.; and Grants Pass, Ore.
The push back from schools hit with a huge CalSTRS rate increase, expected to be an additional $3.7 billion a year when fully phased in, is not that it’s unaffordable and will hurt students or unfairly lets the state and teachers off the hook. . . As it stands now, school districts would have to pay for the CalSTRS rate increase with money from a new K-12 funding plan adopted two years ago, the Local Control Funding Formula.
A union-led coalition of liberal groups launched a campaign to change Proposition 13, the iconic 1978 property tax limit, seeking billions more in revenue from commercial and industrial property owners.
Combined, these taxes can hit a small business hard when it eventually grows and earns more income. In California, for example, the top marginal income tax rate on pass-through businesses tops 51.9 percent. Hawaii (50.4) and New York (50.2 percent) also have top marginal tax rates on pass-through businesses over 50 percent. Even in states with no income tax, the top marginal tax rate on pass-through business income is 42.6 percent.
According to 2011 Census data, pass-through businesses employ 55.3 percent of the private sector work force of 119 million people. This represents approximately 65.8 million workers and business owners.
“Pension reform also creates an alternative to tax increases,” DeMaio said in an interview. “And right now there are a lot of groups in California that are very concerned about the bevy of tax hikes that will be on the 2016 ballot.”
An expanding state economy and a temporary sales and income tax increase are flooding the state treasury with money, at least $4-plus billion more than the current budget assumes, and maybe even $5-plus billion.
Like the legislation, the initiatives would raise the tobacco tax by $2 per pack of cigarettes to raise $1.5 billion annually for smoking prevention and smoking-related medical costs now borne by taxpayers through Medi-Cal, the state’s healthcare program for the poor.
The presidential election in 2016 is will be a defining generational election for California’s future. Just as we are coming out of the recession, efforts are now underway by special interest and public employee unions in Sacramento to raise $20 billion in new taxes to fund increased benefits for their members.