$950 Million Budget Gap, $2 a Pack Cigarette Tax Proposed

Gov. Brown has been working with legislators to bridge a $950 million gap in Medicaid funding over the 2019-21 biennium, here’s what we’ve learned about her proposal so far:

Voters can expect a cigarette tax on their ballots sometime in the next year. Currently, the proposed tax would be $2 a pack, and it would raise $346 million over its first two years, if passed.

Theoretically, lawmakers could adopt the tax on their own accord, but there is general consensus the matter will go to voters, instead. Gov. Brown also proposes increasing assessments on large hospitals from 5.3 to 6 percent, and reinstatement of the current tax on insurance plans to help bridge much of the remaining gap.

Brown is also proposing a tax on employers based on the policies they offer, but the details are hazy on this area of her proposed budget, though the governor said she believes lawmakers can work out the details over the coming weeks.

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