No on 52

I have to admit, I’m really puzzled by Proposition 52, and I am seriously tempted to vote against it on those grounds – if I, a licensed-in-California lawyer who has followed ballot initiatives closely for 26 years, am confused, then it’s probably not something the voters should be voting on in its current form.
According to the ballot label, Proposition 52 “Extends indefinitely an existing statute that imposes fees on hospitals to fund Medi-Cal health care services, care for uninsured patients, and children’s health coverage”. That’s clear enough. But in order to do this it seems to require both an amendment to the state constitution AND a change in statute, and it’s not clear why; worse yet, it’s not clear to me *how* the change to the law does what the Legislative Analyst says it does.
Looking first to the law (, it appears that Proposition 52 does the following things:
(1) it amends the California Constitution to say that, if the legislature wants to change a particular law (Welfare and Institutions Code Article 5.230, the  Medi-Cal Hospital Reimbursement Improvement Act of 2013), those changes must be approved by the voters, unless the legislature either (a) the changes are passed by a 2/3 vote AND (b) either (1) the changes further the purposes of the original law or (2) the changes repeal the law in its entirety (without replacing it with a similar law that imposes a new tax, fee, or assessment).
(2) it amends the California Constitution to require that the fee raised by the original law is not considered revenue for the purpose of things like the overall spending limit or for the rule that says that roughly 50% of revenue must be spent on schools.
(3) it amends the Welfare and Institutions Code to automatically terminate Article 5.230 (the Medi-Cal Hospital Reimbursement Improvement Act) if the legislature fails to appropriate money in the Hospital Quality Assurance Revnue Fund in either the budget act or in a seperate bill enacted within thirty days of the budget act.
(4) it clarifies a rule so that Article 5.230 will automatically terminate given “a net general fund cost incurred due to the act” rather than “a cost to the general fund that is equal to or greater than one quarter of one percent of the general fund expenditures authorized in the most recent annual budget act.”
(5) it repeals the expiration date of the law.
Without even getting into my confusion about how this does what the LAO says it does, this is *bizarre*. It says the legislautre can’t change the underlying program without voter approval unless it does certain things by a 2/3 vote, but it makes it possible for the legislature to effectively repeal the underlying program by majority vote simply by failing to appropriate money from a certain fund. And it makes it *easier* for the underlying program to be automatically cancelled due to financial concerns, in the name of ensuring that the money raised is used for its intended purpose.
The Legislative Analyst has a decent explanation of the background. ( Apparently the state has been collecting a fee, levied against hospitals, since 2009, with the proceeds going (in part) to help fund the state’s share of Medical expenses and (in part) to underwrite the general fund; the part going to medical is currently matched by federal money. The fee will expire in 2018, but it’s been set to expire in the past, and the legislature keeps extending it; however, extension must be approved by the feds.
The LAO claims that the law does the following things:
* makes the program permanent.
* makes it harder for the legislature to end the fee
* makes it harder for the legislature to change the fee
* excludes the fee from the calculation of school funding
I can see how the law makes the program permanent; see (5) above. I can see how it makes it harder to change the fee; see (1) above. I can see how it excludes the fee from school funding; see (2) above.
But it does NOT make it harder for the legislature to end the fee. It *pretends to*, by requiring that a bill to do that pass by 2/3 or be approved by the voters, but because it *explicitly abolishes the program if the money isn’t appropriated*, it doesn’t *in fact* make it any harder – it just requires that the legislature play convoluted games to do so rather than doing so straightforwardly.
It’s pretty clear that the intended result of this initiative is to ensure that, if the federal government allows the fee to be extended, the program will continue in perpetuity, thereby securing a huge financial base for Medical, and that it will make it harder for the legislature to decide to divert the money or abolish it.
It’s also pretty clear to me that the initiative doesn’t actually have that result, probably because it’s a voter initiative and was likely drafted by a sloppy lawyer.
But *even if it did what it said it would do*, I would vote against, because this violates one of my strongest policy preferences for initiatives: it writes a *particular allocation of dollars into the state constitution*. By doing so, it decreases the ability of the legislature to respond to developments, and ossifies and hardens the budget structure. The more we mandate, at a constitutional level, that things be spent a certain way, the less flexibility the state has to deal with economic or environmental catastrophes.
The official argument against, in typical useless fashion, wants to decry hospital ceos who make too much money, but that’s not the problem with this initiative. The problem with this initiative is that it’s an extremely well-intentioned plan to implement bad policy which, due to flawed drafting, doesn’t even accomplish it’s intended goal.
Vote no on Prop 52.

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