California voters are weighing a statewide ballot measure that would mandate how community health clinics spend their revenue, as CalMatters reported.
Proposition 44 would require community health clinics across the state to direct at least 90% of their annual revenue toward patient care. Facilities that fail to meet this threshold would face financial penalties paid to the state. Nonpartisan estimates from the Legislative Analyst’s Office show that clinics currently spend an average of about 80% of their revenue on direct care, though individual spending varies by provider.
Sponsored by the Service Employees International Union-United Healthcare Workers West, the proposal aims to increase oversight over public funding. Clinics serve as a safety net for roughly 7 million low-income residents in California, relying primarily on federal grants and public insurance reimbursements to maintain operations.
Union representatives argue that strict limits are necessary to stop clinics from overspending on non-essential costs. Renée Saldaña, a spokesperson for the union, told CalMatters that public funds should not be channeled toward high administrative salaries or other non-essential expenses that have appeared within the clinic system. Union organizers point to high executive pay, including instances that recently prompted an Internal Revenue Service complaint, as evidence that stronger spending rules are needed.
Opponents of the measure, led by community clinics, have mounted a major campaign to defeat it. Campaign finance reports show opponent groups have raised $39 million, compared to $17 million reported by supporters. Opponents warn that the financial penalties under the measure could cause severe disruptions to local healthcare access.
An analysis commissioned by measure opponents projects that penalties could reach $1.7 billion in the first year alone. Opponents contend these financial hits could force some clinics to close entirely or scale back services. Dr. Jerry Abraham of Kedren Health, a community clinic operating in South Los Angeles, told CalMatters during a rally that the measure risks putting patients in danger by reducing access to primary care, which would force patients needing medical attention to seek help in emergency departments instead.
Clinic operators also point out that their facilities already comply with regulations enforced by state and federal healthcare authorities. Additionally, opponents express concern over how the measure defines appropriate healthcare spending.
Under the text of Proposition 44, the California Attorney General’s office is tasked with issuing specific guidelines to define what qualifies as direct patient care spending. Clinic leaders caution that depending on how the attorney general defines those categories, clinics could be fined for necessary operational costs, including upgrades to medical equipment, support staff salaries, facility construction, or maintaining financial budget reserves.
This measure marks the second time the healthcare union has attempted to enact spending restrictions on clinics, following a similar legislative effort that failed last year. The political dispute has also resulted in legal battles between the union and clinic organizations.
The California Primary Care Association, representing approximately 2,000 community clinics, filed two lawsuits against the union. The first lawsuit sought to block the initiative from reaching the ballot, but a federal judge dismissed the case earlier this year. A second lawsuit filed in September accuses the union and its president, Dave Regan, of using the initiative process to pressure clinics during labor negotiations. The union called those claims untrue, and the lawsuit remains open.
The union has previously used ballot measures to challenge healthcare operations, having sponsored three separate initiatives to regulate dialysis clinics in recent election cycles, all of which failed. Alongside Proposition 44, the union is also supporting Proposition 40, a separate ballot initiative that would place a one-time 5% tax on California residents with a net worth of $1 billion or more.
