Things to know about California's tobacco tax dispute

Months after approving a $2 cigarette tax hike, prices are officially going up April 1 in California, and some local stores are noticing an effect already. (March 30, 2017)

SACRAMENTO, Calif. (AP) — California lawmakers have reached a deal on most elements of the state budget, but they remain at odds with Gov. Jerry Brown on a few key pieces.

The biggest dispute is over how to spend $1.2 billion in tobacco tax revenue.

The money comes from a $2-per-pack increase in cigarette taxes approved by voters last year. It's earmarked for expanding access to Medi-Cal, the publicly funded health plan for people with low incomes.

Doctors and dentists who helped fund the campaign in favor of the cigarette tax expected to see a boost in the notoriously low payments they get for seeing low-income patients on Medi-Cal and Denti-Cal.

But Brown proposed using the money to cover normal Medi-Cal growth, freeing up general fund dollars for other programs.

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