June 14: KCRA-NBC 3 SACRAMENTO - Who wins, who loses with California budget deal

June 14, 2017

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Working poor, pot industry likely to prosper under proposed budget

SACRAMENTO, Calif. (KCRA-TV) —

California Gov. Jerry Brown and Democratic legislative leaders said Tuesday they have agreed to a $125 billion budget that would expand a tax credit for the working poor, increase spending on safety net programs and boost payments for doctors and dentists.

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The budget agreement sets up votes in the state Senate and Assembly on Thursday, the last day for lawmakers to approve a budget without losing pay under a voter-approved measure that withholds lawmakers' paychecks if they don't meet budget deadlines.

The spending plan, which Brown called "balanced and progressive," also includes a one-time payment to the state's largest public-employee pension fund and more money for higher education. It does not reverse spending agreed to last year, as Brown had proposed.

"This budget keeps California on a sound fiscal path and continues to support struggling families and make investments in our schools," Brown said in a statement.

Here's a closer look at the winners and losers of the California budget deal:

HEALTH CARE PROVIDERS -- Winner

Under the budget deal, there’s extra money for health care providers who service 14 million Californians on MediCal. Doctors and dentists will see an increase in repayments:

$325 million more in MediCal reimbursements for doctors serving low-income Californians

$140 million in added MediCal reimbursements for dentists serving low-income Californians

Sacramento resident Brian Smith is one of the people who is likely to benefit from California’s budget deal.

“For many years, I couldn't go to the dentist because I couldn't afford it,” Smith said.

The DentiCal patient said he had previously gone 40 years without seeing a dentist at all.

“I've lost all my top teeth and all my back teeth,” he said. “Now, they're trying to save what they can here.”

But there are just 8,000 dentists statewide to service the 14 million Californians on DentiCal, according to Dr. John Luther, chief dental officer for Western Dental. He said California’s reimbursement rates rank 49th in the nation.

“A rate increase, which hasn't happened in almost 17 years, would bring it up to an acceptable level where they could cover costs and make a living,” Luther said.

The budget deal is also good news for DentiCal patient Barbara Glica, of Sacramento. She said she is very concerned about her teeth.

“It looks like hell and it's hard to eat," Glica said. "They've been falling out and breaking off for the last few years."

MARIJUANA INDUSTRY -- Winner

The other big winner: California’s marijuana industry, which is now estimated to generate $7 billion a year. Under the budget deal, California will:

Spend $118 million to meet Jan. 1, 2018 deadline

Hire 527 state workers to expedite licensing and regulation of legal marijuana

“We are seeing new estimates of $15 billion to $20 billion per year. And, that's the total economic output for the entire industry” Sen. Mike McGuire, D-Healdsburg, said. “We are not counting on any cannabis revenue in the upcoming year."

McGuire said all the additional tax dollars would be used to pay for the 527 positions.

But in the near future McGuire said, “Cannabis-related taxes can be worth $1 billion to the state of California.”

“Sixty percent of the cannabis grown in the United States of America is coming out of four Northern California counties - Lake, Mendocino, Humboldt and Trinity,” he explained.

UC OFFICE OF THE PRESIDENT -- Loser

If there is a loser in the budget deal, it's the University of California Office of the President.

Brown has already called for setting aside $50 million to make sure UCOP fully follows the reforms outlined in a critical state audit. The budget plan also:

Ends the assessment fee that UC campuses paid to the Office of the President

Redirects state funding from UCOP to increase enrollment by 1,500 California undergraduates

In doing so, the legislature seems to be sending a message to UC President Janet Napolitano.

“Comply with the audit,” Senate Budget Chair Holly Mitchell said.

The Los Angeles Democrat added that Napolitano had “acknowledged perhaps the University's shortcomings and is committed to take those corrective actions and so we're cool with that.”