California Republican Leaders Back Tax Increases Amid Healthcare Tax Fight

California Republican Minority Leader Heath Flora and Caucus Chair Juan Alanis voted to approve Senate Bill 762, allowing local jurisdictions to exceed the 2% cap on transactions and use taxes. The measure, backed by Democrats Jesse Arreguin and John Laird, is criticized for increasing costs for low‑income residents and businesses, especially in the Bay Area biotech sector.

Separately, Governor Gavin Newsom’s budget includes a new healthcare levy under SB 125 that imposes an $8.85 per‑member monthly tax on private and Medi‑Cal managed‑care plans. The tax is intended to trigger additional federal Medicaid funding, but it requires approval from the Centers for Medicare & Medicaid Services, now led by Dr. Mehmet Oz. Critics argue the levy will raise annual health‑care costs for California families by about $425, and President Donald Trump could block its implementation.

Both initiatives highlight a contentious debate in California over tax policy, fiscal pressures on state programs, and the role of federal approval in state‑level financing schemes.