CVIndependent

Sun05272018

Last updateWed, 27 Sep 2017 1pm

California’s resistance began before there was a resistance.

When Gov. Jerry Brown unveiled his final budget on Jan. 10, it bookended eight years of a progressive march to reduce greenhouse gases, expand health care, grant more rights to undocumented immigrants and raise the minimum wage to $15 an hour. Along the way, voters have assented by passing temporary taxes on the rich—not once, but twice. The top marginal income tax rate is now 13.3 percent, the highest state income tax rate in the country.

In short, policies that are now labeled acts of resistance to President Donald Trump were alive and ascendant in California long before Trump won the White House. But the contrasts have become much more stark.

Instead of cutting taxes, the Democratic governor and his party’s legislative leaders have passed a gas tax to help pay for aging infrastructure. Instead of trying to shift government out of the healthcare marketplace, California is looking for a way to fund single-payer health care, including coverage for undocumented immigrants. Instead of criminalizing pot, the state is looking forward to collecting taxes on marijuana sales.

In the months between now and the June deadline for a final budget, the governor and the Legislature will hammer out details. The focus this year: what to do with an expected surplus of $6.1 billion—and there are definitely differing opinions all around. Republicans say return it to California’s 40 million residents as a nice tax refund. The governor's priority is to fill up the state’s rainy-day fund. Democratic legislators mostly want to spend it.

“We have a very different approach,” said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

Rather than giving out “huge corporate tax breaks and a huge tax break for the wealthiest in this country,” Ting has a long list of how he would like to spend that extra money, including:

• Increasing the state’s Earned Income Tax Credit, which puts money into the hands of the working poor.

• Expanding Medi-Cal health care for poorer Californians to cover all remaining uninsured residents, mostly undocumented immigrants.

• Expanding early education for 4-year-olds through preschool and transitional kindergarten programs.

• Increasing college aid.

• Expanding mental and social services to reduce the number of criminals who go on to re-offend.

As supportive as Brown might be of these Democratic aspirations, his administration is urging legislative leaders to proceed with caution. The state’s tax structure is more vulnerable than ever to the stock market gains and losses of its wealthiest citizens, and the governor said California must prepare for the next economic downturn, because a mild recession could wipe away at least $20 billion a year in revenues.

He also warns of uncertainty from Washington, D.C.

“There are certain policies that are radical departures from the norm, and California will fight those, whether it’s immigration or offshore drilling,” Brown said. “We don’t know what will happen. I wouldn’t want to portray a California-Washington battle, although there are some key differences, and we’ll espouse our values.”

Since Brown was elected to begin his second stint as governor in November 2010, the state has climbed out of the recession and enjoyed economic prosperity. The unemployment rate, which topped 12 percent, now stands at 4.6 percent. Since his return, California has added 2.4 million jobs, and hourly wages are up $4.76 an hour. The state, which carried a $25 billion deficit in his first year back, has enjoyed billion-dollar surpluses in recent years, and the state now has a rainy-day fund.

The governor’s proposed $190 billion budget is dominated by spending on education (29 percent) and health care (32 percent). Health care spending has been growing particularly fast since the state embraced the Affordable Care Act, also known as Obamacare. The act not only grew the marketplace for private health plans; it allowed states to expand their Medicaid health insurance programs for the poor.

Because California is among 30 states that expanded Medicaid, the federal government is paying at least 90 percent of the cost for newly eligible enrollees. That has allowed California to draw billions in extra funding from the federal government to bolster Medi-Cal, the state’s version of the national Medicaid program. As a result, the number of people without health coverage in the state has dropped to a historic low: from 17.6 percent in the 1980s to 7.6 percent in 2016. Today, one in three Californians is covered by Medi-Cal.

Public schools too have greatly benefited since the recession, with much of the extra spending on schools going to improve teachers’ salaries.

However, if the federal government doesn’t reauthorize the Children’s Health Insurance Program for 1.3 million children, that could add more than $850 million in costs to the state over two years.

Worse, if Republicans in Washington slash Medicaid funding in 2018, the state could lose between $25 billion and $50 billion, said Chris Hoene, executive director of the California Budget and Policy Center, a progressive think tank in Sacramento.

“The reality is California could not afford the scale of the cuts the GOP has been proposing,” Hoene said. “That’s going to put state leaders in a position of deciding who gets state services and how do they fund that.”

Other factors are straining the budget. For example, pension costs for public workers continue to be one of the fastest-growing liabilities—driven by lower investment-rate assumptions, higher health care costs and longer life spans.

Voters, too, could turn on Brown and lawmakers. Early polling suggests Republicans have a decent shot at repealing a gas tax hike that went into effect late last year. Brown said at a press conference Wednesday that he believes a repeal initiative could be defeated.

The Legislature’s nonpartisan budget analyst is also urging lawmakers not to commit to too many new spending programs.

“As it crafts the 2018-19 budget and future budgets, we encourage the Legislature to consider all of the uncertainty faced by the budget in future years and continue its recent practice of building its reserve levels,” the analyst wrote.

On the flipside, Republicans are calling for a tax refund, if not an outright repeal of state income taxes. They argue that California’s high taxes chase residents out of state.

“This surplus is a direct result of Capitol Democrats overtaxing hard-working Californians,” said Assemblyman Matthew Harper, R-Huntington Beach. “Rather than expanding an ever-growing list of government programs, our leaders should figure out a way to return that money to the people who earned it in the first place.”

Assemblyman Vince Fong, R-Bakersfield, said he plans to introduce tax cuts aimed at helping families and small businesses stay in California.

“As we see all too often now, we are losing families and small businesses to neighboring states that have tax burdens much lower than California’s high-priced tax code,” Fong said on Twitter. “We have an opportunity to change that.”

Brown dismissed the refund idea, saying it would only prompt service cuts to public schools and universities later. “If you want to budget responsibly, you need big surpluses in years that are good,” he said.

Still, there’s a growing sentiment that California may have to respond to recent changes in the federal tax plan, specifically a $10,000 cap on state and local deductions that will hit millions of households.

According to the state Finance Department, the average deduction for state and local income taxes alone is nearly $16,000 per return, while state and local property taxes average less than $6,000 per return. Because a portion of those taxes will no longer be deductible, it acts as double taxation for California taxpayers.

Senate President Pro Tem Kevin de León, who is running for U.S. Senate, introduced legislation Thursday to shield Californians from bearing the costs of the tax overhaul. The bill, dubbed Protect California Taxpayers Act, would allow taxpayers to make charitable deductions to the state and receive a dollar-for-dollar tax credit on the full amount of their contribution. By having residents donate to the state government as a charitable contribution, the contribution remains deductible on federal taxes.

“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” de León said in announcing his legislation. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”

Brown was particularly vocal against the GOP tax proposal, calling it a “tax monstrosity,” but the governor expressed reservations about whether the state could sidestep federal law.

“It looks interesting,” Brown said. “But two questions: Can it work? If it does work, can the Internal Revenue Service issue a regulation and completely subvert it?”

De León responded that he was confident it would work, because similar charitable deductions have already been given out for education-based contributions.

For now, state Democrats are in agreement about a common threat.

Whether it’s federal tax changes or entitlement cuts, the leader of the Assembly, Anthony Rendon, D-Paramount, said he’s most concerned Republicans in Congress and the Trump administration will take another swipe at liberal California in 2018. “We’re worried about the next shoe to drop.”

CALmatters is a nonpartisan, nonprofit media venture explaining California policies and politics.

Published in Politics

As with a lot of other families living in the eastern Coachella Valley, when one of our family members fell sick, it meant driving about 100 miles across the border into Mexico, to the city of Mexicali, to get taken care of by a doctor.

The only other option, it seemed, was not being taken care of at all.

Now, because of health-care reform efforts in the United States, young people growing up today in the eastern Coachella Valley—the unincorporated rural communities of southern Riverside County—don’t need to go without health insurance the way I did. The scenario is finally beginning to change. At least it can change—if people here are made aware of the health services now available to them through federal health-care reform, right in their own community.

“We owe it to our country to inform the citizens to take advantage of all these resources that are available,” said Ronnie Cho, associate director of public engagement for the White House, during a speech about health care reform that I attended in Washington, D.C., as a reporter in April.

Cho is right. For the Affordable Care Act (ACA) to make a difference, people need to first be aware that health care is an option for them. People need to know that they can afford to visit a doctor, without having to stray more than a few miles away from their home.

When my family would go visit relatives across the border in Mexicali, we always took advantage of the opportunity to stop by the Mexican pharmacy to buy medicine for ourselves, as well as for our friends and neighbors who always requested some. As a child, I thought those trips to Mexicali to visit the doctor were the only way—it was just what people did—until later on in my youth, when my father got a job with a new trucking business that gave him medical benefits that included family coverage. Because my dad worked for a lot of different trucking companies during the years, and because there were lengths of time when he was unemployed, our health-care situation was never stable. for those few years, my family and I received the best health care we’d ever had.

“Young people are relatively healthy, so they think, ‘I don’t need health care,’ until something happens, and they actually need it,” said Cho.

Again, Cho got it right. I can remember my worried mother, back in 2008, telling my little sister and me that we once again did not have health insurance and would have to resume our trips to Mexicali.

In retrospect, I never minded the long trips to the doctor or dentist’s office. In fact, I never worried about my health. My parents always had medicine from Mexicali available in our cabinets for emergencies. For my siblings and me, it was not something that got in the way; it was something that we believed had to be done, because there was no cheaper option.

The irony is that even though being uninsured felt normal to me and my siblings growing up, it is families like ours who need that insurance the most. Families like mine who live in the unincorporated communities of the eastern Coachella Valley—most of us are Latino; many (like my parents) are immigrants; and many make a living as farm workers or do some other type of physical labor—are especially in need of the protections provided by health insurance, because of occupational hazards and other health risks associated with living in an area where people lack money and resources.

The Affordable Care Act, the bulk of which will be implemented on Jan. 1, 2014, is helping families like mine take control of our medical insurance, by providing options and a sense of security. It’s an idea—health-care security—that at one time, at least for my family, seemed impossible to imagine. The health insurance that for so long seemed like such a special privilege will now become available to more people than ever before.

The ACA was put into place in part to make sure insurance companies cannot end your coverage plan when you need it the most, cannot bill you into debt, and cannot discriminate due to pre-existing medical conditions.

Among other provisions, the ACA will secure medical insurance for American citizens after getting laid off or changing jobs. It will require insurance companies to cover the cost of mammograms and cancer screenings. And for the first time, young adults will remain eligible to be covered under their parent’s or guardian’s health-insurance plan through the age of 26, even if they are married.

As a result, 3.1 million young adults are now covered along with their families, and more than 107,000 Americans with pre-existing conditions who didn’t previously have insurance are now receiving health coverage, according to federal data.

If you know where to look, it is free and simple to apply for affordable or no-cost medical insurance programs such as Medicaid and the Childrens’ Health Insurance Program (CHIP), which cover medical services that include doctor check-ups, emergency care, hospital care, vaccinations, prescription drugs, vision, hearing and dental.

There was a time for a lot of us living here in the eastern Coachella Valley when driving across the border seemed like the easiest and most-affordable way to access health care. Fortunately, for many of us, that no longer needs to be the case. Our communities can have the security of health insurance that for so long seemed just beyond our reach, if we just know where to find it.

To see if you qualify for Medicaid or CHIP, or to apply online, visit insurekidsnow.gov. To find out what is your best insurance option for your specific demographics and needs go to finder.healthcare.gov.

Alejandra Alarcon is a reporter for Coachella Unincorporated, a youth media startup in the east Coachella Valley, funded by the Building Healthy Communities Initiative of the California Endowment and operated by New America Media in San Francisco. The purpose is to report on issues in the community that can bring about change. “Coachella Unincorporated” refers to the region youth journalists cover, but also to the unincorporated communities of the Eastern Valley with the idea to “incorporate” the East Valley into the mainstream Coachella Valley mindset. For more information, visit coachellaunincorporated.org.

Published in Community Voices