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Wednesday, May 29, 2019

SACRAMENTO (AP)—California lawmakers are headed toward a confrontation with first-term Gov. Gavin Newsom over whether to continue a tax that can generate nearly $2 billion for low-income health care benefits.

The state Assembly and Senate budget committees finished their versions of the state's $214 billion annual budget this week. Both of them want to continue a tax on managed care organizations. These organizations manage the state's Medicaid program, the joint federal and state program that provides health coverage for the poor and disabled.

When fully implemented, the tax saves the state about $1.8 billion.

But the tax is set to expire June 30, and California needs permission from the federal government to continue it. Newsom is worried that might not happen and did not include it in his budget proposal.