California hospitals, unions withdraw competing ballot measures

from Kristen HuangCalMatters

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California hospitals and the state’s largest health care workers’ union reached an agreement Thursday to withdraw two competing initiatives from the November ballot hours before the state’s deadline. But a separate measure to impose a one-time tax on billionaires remains headed for voters, potentially changing how California finances health care.

That measure would impose a one-time 5 percent tax on California billionaires if approved by voters. Supporters estimate the tax would bring in $100 billion to replace recent state and federal health care cuts. The union accused Gov. Gavin Newsom of trying to strike a last minute deal to kill the ballot measurethat there is “no plan” to prevent layoffs that are expected to cut jobs and leave millions of Californians uninsured, according to recent forecasts.

“We felt it was important to do everything we could to try to resolve this issue,” said Dave Regan, president of the Service Employees International Union – United Health Workers of the West.

In addition to the wealth tax, SEIU-United Healthcare Workers West qualified an initiative to limit pay for hospital executives; while the California Hospital Association hit back with a proposal to limit the union’s political spending without member approval. Those two measures will no longer appear on the ballot under a deal brokered by the California Federation of Labor Unions, AFL-CIO.

Union members have argued that money has been siphoned away from patient care through federal and state budget cuts and business decisions that support expensive executive salaries. In turn, hospitals and some experts argued that capping executive salaries would drain talent from expensive California and lead to worse patient care.

Both sides were initially adamant they were not interested in negotiations, but Thursday’s agreement is the latest reminder that little has been fixed in Sacramento politics. Both sides had raised tens of millions of dollars to support their proposals.

Carmela Coyle, president and CEO of the hospital association, said in a statement that the agreement will “ensure high-quality health care services are available throughout California.”

Lorena Gonzalez, president of the labor federation, said the deal would support “quality health care and good union jobs for Californians.”

SEIU-United Healthcare Workers West declined to comment on the settlement.

Transaction history

It was the sixth time the union has tried to cap health care executive salaries at $450,000 through state or local ballot measures.

For decades, the Reagan-led union has used ballot initiatives to gain influence over the health care industry, strike deals with lawmakers and advance its political agenda.

Voters may remember dialysis center initiatives appeared on three consecutive ballots in 2018, 2020 and 2022. All three failed, and the dialysis industry spent hundreds of millions of dollars to defeat them.

That strategy is what SEIU-United Healthcare Workers West does — and what it’s doing this year.

Since 2012, the union has sponsored 48 state and local ballot initiatives, spending $120 million. Most of the measures have been withdrawn or rejected. Despite these specific setbacks, the strategy has led to major successes, including a $25-an-hour minimum wage for health care workers. On that issue, the union previously asked voters in multiple cities to raise wages striking a deal with lawmakers and hospitals this included a 10-year moratorium on local minimum wage ballot measures.

That strategy is shaping the debate over this year’s most contentious measure, which will put a major question before voters: whether California should impose a new tax on its wealthiest residents to help fund health care.

The proposal drew opposition from an unusual combination of business interests, Newsom, billionaires and progressive groups such as Planned Parenthood and the California Association of Teachers.

“We have to use all the tools in our toolbox,” union spokesman Rene Saldaña said before the settlement. “We see the ballot initiative as one way to take it directly to California voters.”

Good politics or ballot blackmail?

It’s a cat-and-mouse game dating back to the early 1900s. Special interests in California spend millions to put a ballot initiative before voters; use it for political influence; and eventually cut a deal with lawmakers or political rivals to withdraw the measures in exchange for some other benefit.

Dan Schnur, a longtime Republican analyst and political communications professor at USC, said special interests have always taken advantage of ballot initiatives to try to push their agendas. What makes SEIU-United Healthcare Workers West unusual is how often it repeats initiatives that fail, but the willingness to do so may be what gives the union so much political leverage.

“The ballot initiative is the ultimate blunt instrument,” Schnur said. “The threat of a vote could help shape negotiations in the legislature on the same topic.”

John Matsusaka, USC law professor and executive director of the Institute for Initiative and Referendumsaid ballot initiatives are intended to allow voters to decide directly whether a proposal should become law. This helps circumvent a legislature that voters may feel does not actually reflect their interests.

California groups have tried to push more initiatives than any other state, Matsusaka said, but using them as leverage is an unhealthy way to look at the law.

“In my view, laws should not be used as a bargaining chip in your negotiations,” he said.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a cost they can afford. Visit www.chcf.org to learn more.

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