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California's tobacco tax spending plan, a major sticking point in the state budget, easily clears Legislature

 (Jan Pitman / Getty Images)
(Jan Pitman / Getty Images)

The squabble over how to spend around $1.3 billion in new tobacco tax revenues in California was one of the most prolonged standoffs of the budget season. But on Thursday, the compromise plan easily cleared the Legislature.

Under the spending plan, $465 million will go toward increased payments for doctors and dentists who see patients in the Medi-Cal program. Those healthcare providers had envisioned getting more money when they backed Proposition 56 last year, but Gov. Jerry Brown had resisted upping reimbursements at all for most of the budget season.

Democratic lawmakers and some Republicans sided with the medical groups, arguing that voters had backed the tax in order to expand access to Medi-Cal and that higher payments to doctors and dentists would encourage them to participate in the program.

But while Democrats appeared satisfied by the compromise — which also included $50 million to increase payments to family planning providers such as Planned Parenthood — most Republicans said more money should have gone to increase reimbursement rates.

"The will of the voters is being usurped by the governor," state Sen. John Moorlach (R-Costa Mesa) said.

In a subtle jab at Republicans, who largely did not back the $2-per-pack tax hike last fall, state Sen. Richard Pan (D-Sacramento) thanked those of his colleagues that "endorsed and campaigned" for the initiative. He called the higher payments in the spending plan "a substantial step forward."

Still, some Democrats were not fully enthusiastic with the final figure. Assemblyman Jim Wood (D-Healdsburg) said he was "disappointed" that more money was not going to physician and dentist payments but said "less than half a loaf is better than no loaf at all."

The spending plan passed the Senate on a 25-11 vote and the Assembly on a 65-8 vote.

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