Brown's Tax On Health Plans Splits California GOP

California lawmakers will vote Monday on Gov. Jerry Brown’s proposal to restructure a tax on health insurers. The deal is intended to avoid a $1 billion state budget deficit. Democrats are expected to support the tax – but Republicans are split.

Republicans have long branded themselves as opposing tax increases, and Sen. Mike Morrell (R-Rancho Cucamonga) says he can’t in good conscience support this one, especially with the state’s budget surplus.

“I feel like (the state has) a lot of money and our constituents want us to spend it efficiently and effectively,” Morrell says. ”They don’t want another tax.”

Assembly Minority Leader Chad Mayes (R-Yucca Valley) helped negotiate the deal with the governor. He says the package as a whole would be a tax cut – and it also includes several GOP priorities, like paying down debt.

“It’s important for us, on our side, to be able to show that we can be adults and that we can govern,“ Mayes says, “and that’s what we’ve done here.”

Republicans who support the bill will have some political cover. The Howard Jarvis Taxpayers Association and California Chamber of Commerce both say the governor’s proposal would not result in a net tax increase.

Although the legislation does not expressly prohibit health plans from raising insurance premiums, insurers have assured lawmakers they won’t do so. If they do, says Sen. Anthony Cannella (R-Ceres), who plans to vote for the tax, “there’s going to be hell to pay.”

Asked to elaborate on that statement, Cannella replied: “The Legislature will be very unhappy and there’s lots of things that we can do to remedy that.”