California voters overwhelmingly rejected a contentious ballot initiative that would have required community health clinics to direct at least 90% of their revenue toward patient care. The measure failed after opponents warned it could force hundreds of clinics to close.
Proposition 44 was decisively defeated Tuesday, with nearly 82% of voters casting ballots against it as counting continued.
The result marked another setback for SEIU-United Healthcare Workers West, the influential labor union that sponsored the initiative. Supporters accused taxpayer-funded clinics of spending too much on executive pay and administrative costs rather than direct services for patients.
Under the proposal, nonprofit Federally Qualified Health Centers would have been required to spend a minimum of 90% of their annual revenue on healthcare services or face substantial state penalties.
Only 10% of a clinic’s revenue could have gone toward administration and other expenses. That would have represented a sharp change from the current breakdown, in which clinics spend about 80% on services, according to the nonpartisan Legislative Analyst’s Office.
Backers said Proposition 44 would curb unnecessary spending and force clinic leaders to take greater responsibility for the use of public funds.
“Money should not be directed towards excessive executive compensation or other non-essentials that we have seen within … our clinic system,” union spokesperson Renée Saldaña told CalMatters.
Opponents, however, warned that the measure could undermine California’s healthcare safety net, which provides care to an estimated 7 million low-income residents.
An analysis funded by opponents projected that clinics could have incurred $1.7 billion in penalties during the first year, raising fears of widespread closures and reduced services.
“By shutting down clinics, Prop. 44 will force millions of patients into already overcrowded emergency rooms — increasing wait times for everyone,” Dr. Susanne J. Spano, president of the California chapter of the American College of Emergency Physicians, wrote in the California Voter Guide.
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Critics also questioned the initiative’s broad and unclear definition of healthcare spending. They argued that clinics might have been penalized for purchasing medical equipment, hiring essential support workers, expanding facilities or preserving emergency funds.
The measure would have given California’s attorney general the authority to decide which expenses counted as patient care.
State officials said enforcing the initiative could cost tens of millions of dollars each year, with the affected clinics responsible for covering those expenses through fees.
The costly campaign intensified as Election Day approached.
Opponents, including the California Primary Care Association, raised about $39 million to defeat Proposition 44—more than twice the roughly $17 million collected by supporters.
“Today’s resounding defeat shows that health centers will not be bullied and that protecting the whole-patient, whole-community care we are known for will always be a priority,” association president Francisco Silva said in a statement to CalMatters.
The vote also extended the union’s streak of defeats at the ballot box. California voters previously rejected three union-backed measures aimed at regulating dialysis clinics in 2018, 2020 and 2022.
At the same time, the heated dispute has moved into the courts.
In September, the California Primary Care Association sued the union and its president, Dave Regan, alleging that the ballot initiative was intended to pressure clinics into agreeing to the union’s bargaining demands.
The union has rejected the accusations as “categorically false.” The lawsuit is still pending.
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