CDA urges use of Prop. 56 funding as voters intended

The 2017-18 state budget proposed by Gov. Jerry Brown calls for using tobacco tax-generated funds from Proposition 56 to offset the state’s current obligations to Medi-Cal rather than provide additional funding for provider reimbursement rates. This proposal disregards the will of the voters and the ballot measure’s provisions. 

CDA co-sponsored Proposition 56, a $2 tobacco tax increase that voters passed in November to address a critical public health issue and improve access to care for the 14 million Californians who depend on the chronically underfunded Medi-Cal program for their medical and dental care needs. The ballot measure states that Proposition 56 funds designated for Medi-Cal were to be used to increase funding “by providing improved payments” for treatment and services.

“We are disappointed with the governor’s proposed budget,” said CDA President Clelan Ehrler, DDS, MS. “Voters overwhelmingly supported Proposition 56 and the measure made clear that the additional Medi-Cal funding was to be used in a way that would increase timely access to care, not to supplant general fund obligations.”

The governor’s annual January budget release is a starting point for negotiations with the Legislature. The governor will release a revised proposal in May after a reassessment of revenue projections before reaching a final budget agreement by the June 15 deadline. CDA will work aggressively with its Proposition 56 coalition partners and legislators to prevent the proposed diversion of the new tobacco tax funds.

“CDA looks forward to working with the administration and the Legislature to identify solutions to the state’s access to care crisis that involve the appropriate use of Proposition 56 funding,” added Ehrler.

More than half of all children in the Medi-Cal program are not receiving dental care and the majority of counties have an insufficient number of Denti-Cal providers, according to a report by the State Auditor’s office. A primary reason for the lack of providers is low reimbursement rates, among the lowest in the nation, as outlined by the state auditor and a recent review by the state’s Little Hoover Commission, an oversight agency. Denti-Cal providers deliver care at a significant loss, typically receiving 30 cents on the dollar, and reimbursement rates are at the same level as they were in 2000. The number of Denti-Cal providers has declined 15 percent since 2008 according to the Department of Health Care Services, while 6 million new beneficiaries have been added in that time.  

The governor’s administration cites slowed growth in state revenues and projected deficits for the need to offset the state general fund’s obligations to Medi-Cal. The proposed budget does not incorporate any possible changes in federal funding that may occur with a repeal of the Affordable Care Act, but the threat of such action lingers over budget considerations and reinforces the conservative spending approach.

Concerning other Proposition 56 funding, the governor’s budget includes the annual $30 million dedicated to the state oral health program overseen by the state dental director, an approximately tenfold increase in the program’s funding.

CDA will keep members informed about Proposition 56 funding and the final budget in the CDA Update and on cda.org.

Related Items

CDA is excited to report that Proposition 56, co-sponsored by CDA to raise the state’s tobacco tax by $2, passed overwhelmingly in yesterday’s election with 62 percent of the vote. Winning a ballot measure campaign in California is a massive undertaking, especially with an opposition as powerful and well-funded as the tobacco industry.