Proposition 44, a ballot initiative primarily supported by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), aims to reshape how community health clinics manage their finances. The measure seeks to require these federally qualified health centers to allocate 90% of their revenue to "program services" directly advancing their mission to provide charitable care for low-income and uninsured patients. It would restrict spending on other areas, such as administrative expenses, to no more than 10% of their revenue.
SEIU-UHW, which also backs a billionaire wealth tax, claims the initiative is necessary because some clinics misuse funds on high executive salaries and other non-patient care items. Union spokesperson Renee Saldana argues that dramatic federal healthcare cuts targeting programs for low-income patients make it crucial for clinics to prioritize patient services over administrative or other costs. Saldana states that the union has observed clinics with "extravagant fundraisers or art collections or CEOs that are paid in the millions while their patients are struggling to get appointments." The union asserts the initiative is designed to secure spending for patients and workers, not to reduce clinic funds, and includes provisions allowing clinics to earn back penalties if they achieve compliance.
Clinics that fail to meet the proposed 90% spending threshold would face penalties. The attorney general would have the authority to fine non-compliant clinics, with the collected funds directed into a special account designated for health workforce spending.
However, the measure faces widespread opposition from groups representing clinics, doctors, and hospitals, alongside the California Democratic, Republican, and Working Families parties. These opposing groups have collectively raised approximately $37.6 million against the initiative, significantly more than the $17 million raised by SEIU-UHW in support, primarily from union coffers.
Francisco Silva, chief executive of the California Primary Care Association (CPCA), which represents clinics, characterizes the initiative as an "existential threat." Silva warns that the measure could compel clinics to reduce services, cut staff, or even close their doors. According to a study commissioned by the CPCA, most clinics could incur a collective $1.7 billion in penalties during the first year, potentially leading to the closure of nearly half of all clinics statewide. Silva emphasizes the critical role these centers play, stating that in many communities, the community health center is the sole source of care, and their loss would dismantle the "basic safety net."
Opponents also argue that the initiative would hinder clinics from spending on essential support services such as patient navigators, translators, and food pantries, as well as capital improvements like renovations and new buildings. The union, however, disputes these claims, stating that the attorney general would have the discretion to determine which types of spending qualify as patient services.
Community health clinics are already structured as nonprofits, legally required to reinvest 100% of their revenue back into their operations regardless of the outcome of Proposition 44. The nonpartisan Legislative Analyst’s Office reports that most clinics currently dedicate about 80% of their revenue to providing health services, though some spend less. Public support for the initiative appears limited, with a September poll from the Public Policy Institute of California indicating that only one in three likely voters back the measure.
This ballot initiative follows a previous attempt by SEIU-UHW to pass similar legislation, which failed in committee last year. The CPCA has also filed a complaint in the U.S. District Court for the Eastern District of California, alleging that SEIU-UHW has engaged in unlawful anti-racketeering practices. The complaint, filed in September, claims the union offered to withdraw Proposition 44 in exchange for increased union membership at clinics or for the CPCA to drop its opposition to the union-supported billionaire wealth tax. CPCA General Counsel Joey Cachuela asserts that the union's president, Dave Regan, and SEIU-UHW are "extorting health centers" by leveraging the ballot measure process for demands unrelated to Prop. 44 itself. Union spokesperson Renee Saldana dismisses these allegations as "categorically false," stating that the CPCA has previously used legal filings to pressure healthcare workers of SEIU-UHW from pursuing accountability for clinics and CEOs. A prior lawsuit filed by the primary care association to remove the initiative from the ballot was dismissed by a judge.