California Lawmakers Approve 2 Tax Hikes Worth $2.9 Billion, Sending Measures to Newsom
Updated
Updated · KCRA Sacramento · Jun 19
California Lawmakers Approve 2 Tax Hikes Worth $2.9 Billion, Sending Measures to Newsom
3 articles · Updated · KCRA Sacramento · Jun 19
Summary
$2.9 billion in annual revenue is at stake after California lawmakers gave final approval to higher taxes on health plans and digital software, with Gov. Gavin Newsom expected to sign both measures by month-end.
The health-plan tax is projected to raise $2 billion a year for Medi-Cal and increase private insurance costs by about $100 annually for individuals, following a broader redesign of the state's Medi-Cal funding levy.
A new 7.25% sales tax on digital software such as Microsoft Office, QuickBooks, Slack and Workday would generate about $900 million a year, with rates varying by where the software is bought or used.
Business groups say the software levy will ripple through nearly every company in California and could lift consumer prices, while lawmakers argue the taxes are needed to offset Trump administration funding cuts.
The votes come as Sacramento moves to finish a record $355 billion state budget by the end of June without major spending cuts.