Tensions are rising in the Tulare County Republican Party over Assemblyman Devon Mathis’ yes vote on the Managed Care Organization (MCO) Tax. Mathis says it is not a tax, and that his vote allowed the state to receive one billion in federal funding. Many Tulare County Republicans say that it was a tax and that health care insurance premiums will go up as a result.
Because of Mathis’ vote, and other alleged problems with his first term in office, Common Sense Information PAC (CSI) is launching a radio and newspaper ad campaign to educate the public about Mathis’ vote. CSI is also targeting Bakersfield Assemblyman Rudy Salas for not taking a stand against the $15 minimum wage increase.
Founded by businessman Tal Cloud six years ago, CSI has advocated or campaigned against certain candidates running for office or political issues. CSI debuted in 2010 when the PAC ran radio ads attacking then-state Sen. Jeff Denham, who was making his first congressional run. Denham ended up winning the election.
Cloud said, “Assembly Member Devon Mathis Republican, from Visalia, has been a failure in his first term protecting conservative values that he claimed to represent when he asked for our vote two years ago. Assemblyman Mathis voted to raise taxes and give the Democrats in Sacramento another weak Republican member to take advantage of, and we cannot have that given how close we are to a Super Minority in Sacramento.”
Assemblyman Jim Patterson, Assemblywoman Shannon Grove, and State Senators Jean Fuller and Andy Vidak all voted no on the MCO tax bill.
The issue at hand is Assemblyman Mathis’ vote on February 29 in favor of the Managed Care Organization tax. Ten other Republicans in the assembly, and two in the state senate, voted in favor of the tax along with Mathis. The California Disability Services Association, California Hospital Association, Kaweah Delta Health Care District among many others also supported the bill.
According to a recent Foothills Sun Gazette article, Mathis said, “The MCO tax reform package is good fiscal policy for California and directly helps some of our state’s most vulnerable Medi-Cal and developmentally disabled patients. This bill package creates a net $100 million tax savings, and will allow more than $1 billion of Californians’ federal tax dollars to return to our state in the form of matching funds.”
The editor of this paper called Devon Mathis’ office for his reaction to the CSI advertising campaign and his vote on the MCO. Their response was, “No comment for the Valley Voice.”
The Tulare County Taxpayers Association, Howard Jarvis Taxpayers Association, and the National Federation of Small Business took a neutral stance on the bill. Grover Norquist, president of Americans for Tax Reform, however, came out against the bill. Norquist says that those Republicans who voted for the tax hike are damaging the Republican brand. Norquist explains this is simply a tax on health care providers that will be passed onto the consumer.
“In the last election, Californians elected more than enough Republicans to the state legislature to give the GOP the ability to block Democratic efforts to raise taxes in Sacramento” said Norquist. “California has the nation’s highest marginal income tax rate, the 8th highest corporate tax rate, and the 6th highest overall tax burden. If Republicans aren’t going to stop legislative Democrats from raising taxes at the behest of government employee unions who fund their campaigns, what purpose do they serve? Doorstops? Organ donors?”
The Business Journal reported that, “Whereas the old tax has been imposed only on managed care plans in the Medi-Cal business, the new tax will be levied on all managed care plans. However, to encourage providers not to pass the tax on to consumers and to offset the cost to insurers, other taxes insurers pay were eliminated. The new legislation includes $371 million in breaks on state premiums and corporation taxes.”
The Business Journal concluded, “the impact it will have on businesses is uncertain.”
Mathis’ vote on the MCO tax was the straw that broke the camel’s back for Woodlake Mayor, Rudy Mendoza, when he decided to run for assembly again.
“Mr. Mathis does not represent the values of our district, the strongest Republican district in the Central Valley where we fight tooth and nail every day against government bureaucracy and bad regulations. Mr. Mathis voted for a major tax increase that will hurt the working class families of our district. He has become the best friend of Governor Jerry Brown by helping to pass yet another tax that will do nothing but create additional hardship on our citizens.”
One longtime establishment Republican who did not want to be named vehemently agreed with Mendoza and said Mathis’ vote was simply “Pay to play.”
“What gets my goat is that the state legislature was going to pass the MCO tax anyway, so he didn’t even have to vote yes.” She said that the Southern Inyo Hospital stood to gain $1.3 million from the MCO tax, which is a direct benefit to Healthcare Conglomerates Association (HCCA.)
HCCA donated $7200 to Mathis’ campaign and just acquired the contract for Southern Inyo Hospital.