California voters overwhelmingly reject union-backed Prop. 44 crackdown on community health clinics

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California voters delivered a crushing blow to a controversial ballot measure that would have forced community health clinics to spend at least 90% of their revenue on patient care, rejecting the proposal amid dire warnings it could shutter hundreds of facilities.

Proposition 44 went down in flames Tuesday, with nearly 82% of voters opposing the measure as votes continued to be counted.

The landslide defeat marks another election setback for SEIU-United Healthcare Workers West, the powerful labor union behind the initiative, which argued that taxpayer-funded clinics were funneling too much money toward bloated executive salaries and other expenses instead of patients.

The proposal would have required nonprofit Federally Qualified Health Centers to devote at least 90% of their annual revenue to healthcare services or face hefty state penalties.

Clinics would have been limited to spending just 10% on administrative and other expenses, which would have been a dramatic shift from the roughly 80% they currently spend on services, according to the nonpartisan Legislative Analyst’s Office.

Supporters insisted the measure would crack down on wasteful spending and hold clinic executives accountable for how public money is used.

“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.

But opponents painted a far more alarming picture, warning the sweeping restrictions could devastate California’s healthcare safety net, which serves an estimated 7 million low-income residents.

An analysis commissioned by opponents estimated clinics could face $1.7 billion in penalties during the first year alone, potentially triggering widespread closures and service cuts.

“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 American College of Emergency Physicians’ California chapter, warned in a California Voter Guide.

Critics also blasted the measure’s murky definition of healthcare spending, arguing that clinics could have been punished for investing in medical equipment, hiring support staff, expanding facilities or maintaining emergency reserves.

The initiative would have left California’s attorney general responsible for determining which expenses qualified as patient care.

State officials estimated enforcement would cost tens of millions of dollars annually, with affected clinics footing the bill through fees.

The bitter campaign also came with a hefty price tag.

Opponents, led by the California Primary Care Association, raised approximately $39 million to defeat the measure, more than double the $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 election also adds another defeat to the union’s ballot-box record after California voters rejected three previous union-backed initiatives targeting dialysis clinics in 2018, 2020 and 2022.

Meanwhile, the bruising fight has spilled into court.

The California Primary Care Association filed a lawsuit in September accusing the union and its president, Dave Regan, of using the ballot initiative to pressure clinics into accepting union bargaining demands.

The union has dismissed the allegations as “categorically false,” and the lawsuit remains pending.

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