The MCO Tax: A Flat Versus Tiered Structure

Jul 20, 2015 - This is summarized in the following equation: Overall state funding = MCO net liability + federal reimbursement Therefore, to achieve $1.36 billion in total state funding, the Governor ’s proposal would leverage $700 million in federal funds ($1.36 billion minus $660 million in MCO liability) for the state ’s use, while a flat tax would leverage $410 million in federal funds ($1.36 billion minus $950 million in MCO liability).
https://lao.ca.gov/Publications/Report/3292