Fury as more taxes set to be thrust on Californians as key vote passes

California Democrats on Thursday officially sent tax-related proposals that could raise health insurance premiums and slap a new charge on software downloads to Gavin Newsom, who is expected to sign them into law.

The measures are part of discussions around a $356 billion state budget that will be negotiated and finalized with Newsom within the next two weeks.

State Republicans tried to derail the potential cost-of-living increases and slammed Democrats for worsening unaffordability in California.

“The majority party has an addiction to spending. Despite record revenues, it has passed two large tax bills that will take money out of the pockets of hardworking families across California,” said state Sen. Tony Strickland (R).

One measure would extend a tax on health care providers to potentially generate roughly $2 billion a year starting next year. While the state had taxed Medi-Cal providers at a higher rate to get federal funding, that revenue will be gone — so policymakers are eyeing a higher tax on private plans.

But that means individuals with private health insurance plans could see their rates go up an average of about $100 a year, or $400 a year for a family of four.

Republicans said already-struggling hospitals will face even more costs. Sacramento-headquartered Sutter Health alone will face $35 million total in added costs, said state Sen. Roger Niello (R).

Lawmakers also approved a sales tax imposed on software like Slack and Microsoft Suites starting next year. The software tax is estimated to bring in $900 million annually, according to legislative analysis.

Tech groups have been lobbying against that proposal, claiming it would hurt innovation and increase costs for everyday businesses using software.

Republican gubernatorial candidate Steve Hilton, who is vying to replace Newsom, blasted the state’s most prominent business group for not endorsing him and has criticized the new proposed taxes as one example.

Hilton has unveiled a tax plan that involves eliminating income taxes for the first $150,000 households earn and raising the flat tax rate to 8%.

“If we don’t change direction, we are heading for economic disaster,” Hilton said at a Thursday press conference in Sacramento.

State Democrats defended the taxes Thursday, saying they are needed to help California fix its financial situation amid federal revenue loss from an antagonistic Trump administration.

“This is about responsibly budgeting for the future of California,’ said state Sen. Christopher Cabaldon (D).

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