A November poll initiative to boost property taxes on big-business house owners in California is drawing unconventional political assist from healthcare energy gamers and public well being leaders.
They see Proposition 15 as a possible savior for chronically underfunded native well being departments struggling to reply to the worst public well being disaster in additional than a century. The initiative would change California’s property tax system to tax some industrial properties larger than residential properties, which backers say may generate billions to assist native governments pay for important public well being infrastructure and staffing.
With out such further state or federal funding, native governments might be pressured to make deeper funds cuts in well being and different departments subsequent yr because the COVID-19 pandemic continues to pressure metropolis and county funds.
“Whenever you’re speaking about well being care, you’re speaking about cash,” mentioned Anthony Wright, government director of Well being Entry California, a Sacramento-based client advocacy group. “That is the foremost income measure on the poll this yr, and it’s a possibility to fund public well being on the place the place the principle duty for public well being lies — on the county stage.”
A minimum of that’s how well being care advocates are casting the tax hike. However there’s no assure that if the measure passes counties would use new income to deal with COVID-19 or different healthcare wants. And a few rural counties concern they’d lose cash if the poll measure passes, which may undercut public well being efforts.
Assist throughout the well being care and native authorities worlds shouldn’t be unanimous. The highly effective California Hospital Affiliation opposes the measure as a result of it might lead to larger taxes on non-public and investor-owned hospitals, mentioned spokesperson Jan Emerson-Shea. Nonprofit hospitals, together with these run by Sutter Well being, Kaiser Permanente and Dignity Well being, are exempt from paying property taxes regardless of their common excessive income. They might stay exempt below the initiative. (KHN, which produces California Healthline, shouldn’t be affiliated with Kaiser Permanente.)
“This new tax will imply thousands and thousands of dollars can be taken away from affected person care, in perpetuity,” Emerson-Shea mentioned.
Proposition 15 would amend California’s landmark 1978 property tax initiative, Proposition 13, which capped industrial and residential property tax charges at 1% of assessed worth on the time of buy, and restricted annual will increase thereafter to 2%. The drop in property taxes because of the initiative decimated a significant income supply for public colleges and social welfare packages, leaving many underfunded.
Voters are actually being requested to permit larger taxes for enterprise house owners with industrial holdings valued at greater than $three million. If handed, the measure may generate as much as $11.5 billion a yr, in accordance with the nonpartisan state Legislative Analyst’s Workplace. It will not apply to residential properties.
Forty % of annual income can be distributed to Okay-12 colleges and group faculties, with 60% despatched to cities and counties. Nothing within the measure would require new native income to be spent on well being care, however supporters say it’s their finest hope after dropping $134 million in state public well being cash this yr as one-time funding for particular packages expired. On the similar time, slammed by a projected $54 billion deficit, Gov. Gavin Newsom and state lawmakers declined this yr to extend funding for native well being departments to fight COVID-19 and rebuild public well being infrastructure.
Sponsors of Proposition 15, together with the California Lecturers Affiliation and the Service Staff Worldwide Union California, argue it’s an overdue change that might tax wealthier enterprises in trade for funding very important college and healthcare packages. They level out that the initiative, supported by Newsom and Democratic presidential nominee Joe Biden, would require colleges and native governments to reveal all new income they obtain and the way cash is spent.
If handed, cash from the measure would start flowing to colleges and counties in 2022 on the earliest.
Opponents of the measure, together with the California Chamber of Commerce, the California Republican Occasion and the Howard Jarvis Taxpayers Affiliation, say climbing taxes on industrial property house owners would hurt struggling companies hit exhausting by COVID-related closures.
“That is being pushed as a panacea cure-all, however on the finish of the day, there isn’t a accountability for the place these funds go,” mentioned Michael Bustamante, a spokesperson for the “No on Prop 15” marketing campaign. “There are, with out query, an infinite variety of wants, however there isn’t a specificity with what it may well or can’t be spent on.”
Kat DeBurgh, government director of the Well being Officers Affiliation of California, which represents the state’s 61 native well being officers and has not taken a place on the initiative, mentioned ongoing, unrestricted income may really profit counties by permitting them to spearhead public well being packages that handle native wants.
At current, counties are restricted in what they will do with their public well being dollars, she mentioned. Most further funding lately has largely been earmarked for particular packages or illnesses, reminiscent of hepatitis C and HIV, and counties should not allowed to spend it on their COVID-19 response or different public well being actions.
“Perhaps your group’s highest precedence shouldn’t be one thing simply funded by certainly one of these grants. Many rural areas in our state don’t have entry to wash ingesting water, for instance,” DeBurgh mentioned. “And our best demand — extra public well being employees — can’t be funded with grants or one-time cash.”
Healthcare leaders additionally argue the initiative may assist assist group clinics and public hospitals that present look after uninsured individuals, who’ve additionally suffered financially in the course of the pandemic.
“What we’re actually making an attempt to keep away from is having to steadiness the funds on the backs of people that want providers,” mentioned Jodi Hicks, president and CEO of Deliberate Parenthood Associates of California. “Our public well being system has clear inequities that we have to handle, and extra funding will help fill within the gaps on the county stage.”
Hicks mentioned Deliberate Parenthood, which gives intercourse schooling in California public colleges, is supporting the initiative not solely to enhance public well being, but additionally as a result of she worries packages like intercourse schooling can be on the chopping block because the state experiences unprecedented job and financial losses.
“These forms of packages are the primary to get reduce when there’s not sufficient funding,” she mentioned.
Small, rural counties may additionally lose funding, county assessors mentioned.
Whereas the initiative would probably increase taxes on massive industrial property house owners who’ve seen their land and property recognize in worth through the years, it might get rid of property taxes for different enterprise belongings, reminiscent of equipment and gear, for the primary $500,000 in worth.
Counties that haven’t seen land values climb as excessive as these in coastal areas just like the Bay Space might not accumulate extra property taxes whereas additionally dropping income from the tax reduce on different enterprise belongings.
Chuck Leonhardt, the elected assessor for rural Plumas County, tasks that his county might be one of many losers.
“This is able to take $90 million in assessed worth from our tax roll initially, after which I’d should reassess 2,000 industrial properties,” he mentioned. “Many people rural counties don’t really feel we’ll profit from doing these reappraisals and my expectation is we may lose some cash.”
Even amongst supporters in public well being, some concern that any potential windfall for counties can be allotted based mostly on the whims of native politics.
“Regardless that I assist it, I’m skeptical that this cash will go to the general public well being packages and primary infrastructure we so desperately want as a result of public well being has no constituency,” mentioned Bruce Pomer, a public well being knowledgeable and chief lobbyist for the California Affiliation of Public Well being Laboratory Administrators.
He pointed to Sacramento County, the place the sheriff’s division obtained a bigger share of the $181 million in federal COVID-19 aid cash than the county public well being division.
“I’m apprehensive we’ll see the identical factor we noticed with Sacramento County,” Pomer mentioned.
Kaiser Well being Information (KHN) is a nationwide well being coverage information service. It’s an editorially unbiased program of the Henry J. Kaiser Household Basis which isn’t affiliated with Kaiser Permanente.