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Administration's Prop 35 spending plan aims some funds at provider rates and some at program costs; providers urge clarity
Summary
The subcommittee reviewed the administration's proposed Proposition 35 spending plan, which splits revenue between provider payments, workforce investments and limited program support while reserving some funds to address base Medi‑Cal costs.
The subcommittee reviewed the administration's proposed expenditure plan for Proposition 35 (the managed‑care organization tax and spending package approved by voters in 2024). The Legislative Analyst's Office summarized how the measure works and flagged choices the committee will face about using the funds for base costs versus new augmentations.
What Prop 35 does: LAO staff reminded members that Prop 35 makes the managed‑care organization (MCO) tax permanent and sets domains and limits for how the money can be spent. The measure raises revenue that the department may allocate to augment provider payments or to offset general‑fund costs for Medi‑Cal. The administration's May Revision included a two‑year spending plan for calendar years 2025 and 2026.
Administration plan and allocations
Linda Harringt…
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