Top Newsom adviser steps away from health care initiative amid standoff with allies

SACRAMENTO, California — California Gov. Gavin Newsom’s growing discomfort with a proposed ballot initiative sponsored by leading health care groups is spilling out into the public amid tense discussions over the November ballot and state budget.

Jim DeBoo, a top consultant in Sacramento and a former chief of staff to Newsom, confirmed to POLITICO on Thursday that he’s stepped away from his leadership role on the campaign to use a tax on some health insurance to fund improvements in Medi-Cal.

The MCO tax measure, as it’s known, is a major priority for doctors, hospitals, Planned Parenthood and health insurers. Newsom has proposed using money from the tax to cover the state’s gaping budget deficit. At the same time, the related ballot measure would require the state to instead use the money to increase doctor pay in Medi-Cal, the state’s Medicaid health care program.

The ballot measure coalition is upset with Newsom for reneging on last year’s budget deal, which would have protected the money. And those harsh feelings have bled into the ballot fight — where some supporters of the measure are anxious about Newsom’s private problems with the initiative ballooning into outright opposition.

DeBoo stressed that he didn’t want to be associated with a proposal that Newsom has expressed concerns over — and that’s driving a wedge between close political allies and even severing ties between personal friends.

DeBoo said he took the step out of loyalty to the governor and his staff, noting that he’d been in the negotiating position himself as the chief of staff and remains very close to Newsom and his top advisers.

“My agreement with the coalition from last March was always [that] if the Administration and coalition couldn’t reach an accord, I wouldn’t continue working on the measure,” DeBoo said in a text message.

DeBoo and others in Newsom’s inner circle were irked by rumors — including a post on social media late Wednesday, that the governor pressured DeBoo to step away. DeBoo said his reasons were entirely his choice, and he pushed back on the allegation made by Jarrod McNaughton, the CEO of Inland Empire Health Plan, that Newsom forced him to resign.

“The accusation from someone I’ve never met that the Governor forced me to do anything is offensive to me as a professional,” DeBoo said.

A spokesperson for the Inland Empire Health Plan declined to comment.

Taking over the campaign is Brandon Castillo, another top ballot measure expert in Sacramento, whom coalition members said had been working alongside DeBoo.

Dustin Corcoran, CEO of the California Medical Association and leader of the ballot initiative coalition, downplayed the significance of DeBoo leaving, chalking it up to a staffing issue.

“We’re moving into the last phase of this which is a distinct and particular part of the campaign and it makes sense for there to be one clear general consultant,” Corcoran said. “We can’t have two people doing media buys.”

Corcoran said there’s “no daylight” between the coalition’s goals of improving Medi-Cal and Newsom’s, they just differ on how to get there. Regardless, he said Newsom is not pressuring anyone to leave.

“He never made any commitment to support the ballot measure so he’s not broken any commitments or promises at all,” Corcoran added.

The standoff between the governor and some of his closest allies in Sacramento has surprised many in the close-knit Capitol political community and could put others in a difficult position. Anthony York, a former senior adviser to Newsom’s office, also is working for the MCO ballot measure, as a spokesperson.

York did not immediately return a call for comment. Representatives for the governor declined to comment.