HomeMy WebLinkAboutAgenda Report - September 2, 1994f' )
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CITY OF LODI COUNCIL COMMUNICATION
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AGENDA TITLE: Resolution in Opposition to Proposition No. 186
(Health Care Initiative)
MEETING DATE: October S. 1995
PREPARED BY: Assistant City Manager
RECOMMENDED ACTION: The City Council consider for action Resolution 94.115
(attached).
BACKGROUND INFORMATION: Proposition 186 is an initiative Constitutional
Amendment and Statute which establishes a new health
services system for California residents to replace
existing health insurance premiums and programs.
Costs are funded by employer, individual and tobacco
taxes. An elected Health Commissioner will administer the system. Potentially
over $75 billion of government funds will be expended to provide health
insurance; $40 -$50 billion in new taxes.
Under this proposition the State of California will administer a system of
health care coverage for all California residents, financed by new taxes and
potentially, a transfer of existing government funds for health care programs.
The system would replace most privately financed health insurance.
:'he proponents of the act contend that the new system will protect California
consumers, taxpayers and employers from the skyrocketing cost of health care.
Savings will be achieved by limiting health care costs, eliminating waste, and
emphasizing disease prevention. Under the single payer system which will be
administered by an elected Health Commissioner, the practice of medicine will
remain private. All Californians will have free choice of health care
provider, regardless of employment and will have access to comprehensive health
care including long-term care. They further contend that all of these services
will be provided for the same or less money than is spent on health care in
California today.
One of the outcomes of this Act will be to eliminate health insurance companies
which the proponents contend have large administrative, advertising and profit
margins. Every Californian will be provided with "cradle to the grave" health
care services including dental, vision, and long-term care.
00
APPROVED -.. --- -- — - - ---- W
THOMAS A PETERSON recycled Pape,
City Manager
CC -1
J
Resolution in opposition to Proposition No. 186 (Health Care Initiative)
October 5, 1995
Page Two
The funding for all of this will come from an 8.9W employer tax on businesses
with over 50 employees and lesser percentages for businesses with fewer
employees, a 2.5% state income tax, and a $1.00 per package tax on cigarettes.
In addition, all of the present funding of the Departments of Health Services
and Mental Health to the System as well as payments from Medicare and workers
compensation payments for medical coverage will be transferred into the fund.
The opponents to the Act cite a number of concerns with the proposal:
1. Erases the cost-saving reforms regarding the managed care
component of worker's compensation,
2. The $40 billion in new taxes will be insufficient to meet
the health care services outlined in the measure. They
cite a study from the Graduate School of Public Policy and
Health and Medical Sciences at the University of
California, which predicts shortages of $14.5 to $27.5
billion per year.
3. The elected Health Commissioner is empuwered to cut or
ration services and procedures in the event of a
shortfall. The Commissioner will have the sole power to
establish and raise deductibles and co -payments with no
legislative oversight. The Health Commissioner will be
responsible for negotiating rates and deciding what is
covered for all Californians.
4. The only alternative to rationing and cutbacks would be for
the Legislature to raise additional taxes - by a two-thirds
majority. while the debate goes on urgently needed health
care could be unavailable.
5. The massive payroll tax increases in the initiative may
have disastrous effects on California business and raise
unemployment in the state.
As a matter of interest to the City Council, the Employee Relations Committee
of the League of California Cities has forwarded a resolution to the General
Assemnly in opposition to this initiative.
FUNDING: none required
Respectfully submitted,
. L .--
'Jerry L. Glenn
Assistant City Manager
JG:br
Attachment
CCOM-111/TXTA.07A
RESOLUTION NO. 94.115 -
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A RESOLUTION OF THE LODI CITY COUNCIL
IN OPPOSITION TO PROPOSITION 186
(HEALTH CARE REFORM)
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WHEREAS, Proposition 186 amounts to a state government takeover
of the entire health care system in California, including programs
administered at the local level; and
WHEREAS, the $40 to $50 billion additional tax revenues required
to operate this new system will double the tax revenues of the State of
California; and
WHEREAS, projected deficits of from $14.5 to $27.5 billion in the
new system will require additional taxes or rationing of medical
services to close the deficit, and
WHEREAS, local governments lose control over health programs for
their own employees and retirees; and
WHEREAS, local governments will be required to pay a payroll tax
of 8.9 percent of payroll to the state fund, thus rendering local
government little more than a collector of health care funds with no
control over how the money is spent; and
WHEREAS, the rich package of benefits in Proposition 186 will
likely attract non-residents to California seeking health care, thereby
imposing ancillary costs on local governments; and
WHEREAS, Proposition 186 may undermine the sole remedy concept of
workers, compensation by allowing injured workers to sue collateral
sources, leading to a litigation explosion, and weaken the workers,
compensation reforms enacted in 1993; and
WHEREAS, the vast shift of power to a single elected Health Czar
in Sacramento embodied in Proposition 186 will undermine the health
care delivery system and diminish the ability of cities and counties to
provide for health needs of their constituents at the local level;
NOW THEREFORE BE IT RESOLVED that the City of Lodi opposes
Proposition 186 and urges Californians to vote against this measure on
the November 8, 1994 ballot.
Dated: October 5, 1994
I hereby certify that Resolution No 94-115 was passed and
adopted by the Lodi City Council in a regular meeting held October 5,
1994 by the following vote:
Ayes: Council Members - Mann, Pennino, Snider and
Sieglock (Mayor)
Noes: Council Members - Davenport
Absent: Council Members - None
Je fer M. Perrin ,
C Clerk
94-115
...
Taxpayers Against the `�*
Government Takeover
Stop Govmtmrnt-Run Health Care !(M e,-094
No on Proposition 186
DATE: September 2, 1994
TO: California Mayors and Council Members
FROM: Robert Bartlett, Mayor, City of Monrovia
RE: Proposition 186
Of all the decisions voters will face this November, none
is more important than the defeat of Proposition 186, the
so-called single payer healthcare ballot measure.
Under this initiative, the state would takeover one
seventh of California's economy, our private and public health
care system. The state system would be administered by a newly
elected State Health Commissioner, and would be paid for by a
2.5 to five percent income tax surcharge and a 4.4 to 8.9
percent payroll tax on public and private employers. These tax
increases are estimated by the Legislative Analyst to raise
between $40 and $50 billion per year.
This measure abolishes most private health insurance, but
it does not stop there. It seeks to absorb under the
Commissioner all health related functions at the local level,
including current and retired employee health benefits. It
even goes so far as to require that local fire districts
provide all emergency medical services and emergency
transportation. In short, state government could take over
every aspect of health care at the local level.
This broad shift of power to the state has already caused
the Public Employees Retirement System to raise serious
questions about the initiative, since the funding for the PERS
Health Benefits system would be absorbed by the state, and
probably the program as well.
Cities are considered employers under the initiative, and
as such must pay the payroll tax, in most cases at the 8.9
percent level. Cities will pay the state for their employees
health services, but have no control over those services.
Perhaps most disturbing is this initiative's impact on
the state's overall financial condition. An analysis prepared
by Spectrum Economics projects a program deficit, when the
initiative is fully implemented in 1998, of $47 billion. A
similar study by the Graduate School of Public Policy at UC
Berkeley projects a deficit of $12 billion when the system goes
into effect in 1996 growing to at least $34 billion by the time
of full implementation. The Spectrum analysis underscores the
highly detrimental impact of this initiative on local
government:
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The initiative requires California to adopt a new
open-ended entitlement program that would be by far the
largest entitlement program in the state. The revenue
sources required by the new program will not be
sufficient to meet the costs of the services mandated by
the initiative. The impact will be to create a new
structural health deficit that will come on top of the
state's existing structural deficit.
When California faces this size of deficit in its new
entitlement program, political dynamics will probably
force substantial priority for the health program....
Most of the health program's deficit will be'solved, but
primarily through starving other state programs. The
most likely solution will be further reductions in state
aid to education, police services, colleges and
universities, welfare and local government to feed the
ever growing health program deficits.
There is no question that the initiative wreaks havoc on
local governments. Proposition 186 will create state deficits
so monumental that the budget crises of the past several years
will seem mild by comparison. One can well envision the
political problews cities will face in Sacramento when a
legislature that already is starving our programs faces further
deficits in the tens of billions of dollars per year.
To the best of our knowledge, this highly complex and far
reaching initiative was written by people with little
experience with either public employee health insurance
programs or the problems faced by local governments in
providing medical care services at the local level. The
authors of this 80 page -long initiative paid no attention to
the unique needs of local governments.
Enclosed is a fact sheet further explaining Proposition 186, and
a sample resolution.
We respectfully request that you join the many other coalition
members of the campaign in our effort to defeat Proposition 186.
We hope that you will vote to oppose Proposition 186 and that you
will return the resolution to the "No on Proposition 186"
campaign.
Please feel free to contact our campaign at (916) 852-6494, if
you have any questions.
Thank you for your consideration of this request.
Fact Sheet
PROPOSITION 186'S ASSAULT ON LOCAL CONTROL IN CALIFORNIA
Proposition 186 is a disaster for local government in
California.
o Overnight it doubles the size of state government with
$40 to $50 billion in new taxes, and no limits on future
tax increases. But its open-ended benefits package and
lack of cost controls assures massive deficits right from
the start. UC Berkeley Graduate School of Public Policy
predicts deficits of at least $34 billion by 1998.
o This massive deficit when added to the state's existing
structural deficit will require the legislature to
further starve local government and other programs, to
close t]7e deficit.
o Local governments lose control over health programs
for their own employees and retirees, and over current
locally administered health care programs -- but they
still must collect the funds for these programs and
deliver them to state cofers.
o Every local government in California will be required to
pay a payroll tax of up to 8.9 percent for every local
employee to the state health fund.
o Virtually every health decision in California will be
made by an elected Health Commissioner or appointed
regional administrators, including statewide and regional
global budgets. Locally elected officials will have
little if any say oven health funding at the city or
county level.
o A system totally financed and administered from
Sacramento will be driven by budget concerns n,ot health
policy. special health concerns at the local level will
receive no more attention than the Commiss:finer desires.
o This initiative with its rich package of benefits will
act as a magnet to attract non-residents to California
seeking coverage through the government -run system. This
is likely to impose ancillary and unexpected costs on
local governments in areas such as welfare and police
services.
o National!%, recognized and admired programs such as the
Public _mDlovees Medical and Hosoital Care Act will be
abolishe6 and their funds absorbed by the state.
o The initiative may undermine the sole remedy aspects of
workers, Compensation by allowing injured workers to sue
collateral sources. This will lead to a litigation
explosion for both private and public employers. It also
may undercut the important bipartisan workers
compensation reforms enacted in 1993.
o Since beneficiaries will pay no premium regardless of the
type of health care they receive, and providers will be
on pay schedules fixed by the Commissioner, managed care
incentives will disappear. There will be no incentives
to hold down costs, assuring the system itself will drive
higher and higher medical cost inflation.
The vast shift of power to Sacramento accomplished
through Proposition 186 will further feudalize California
government, making city and county officials little more than
vassals of the all powerful State Health Commissioner. In
every way, this initiative is an assault on local control over
scatters of fundamental concern to local constituents and
employees.
SAMPLE CITY RESOLUTION
IN OPPOSITION TO PROPOSITION 186
WHEREAS, Proposition. 186 amounts to a stare government takeover
of the entire health care system in California, including
programs administered at the local level,
WHEREAS, the $40 to $50 billion required to operate this new
system will double the size of state government,
WHEREAS, projected deficits in the new system will require
additional taxes or cuts in existing programs to close the
deficit, both of which will mean reduced revenues at the local
level,
WHEREAS, Local governments lose control over health programs
for their own employees and retirees,
WHEREAS local governments will be required to pay a payroll tax
on each employee to the state fund, as well as continuing to
provide funds for currently administered programs, thus
rendering local government little more than a collector of
health care funds with no control over how the money is spent,
WHEREAS the Public Employees Medical and Hospital Care Act will
be abolished and its funds absorbed by the state,
WHEREAS, the rich package of benefits in Proposition 186 will
likely attract non-residents to California seeking health care,
thereby imposing ancillary costs on local governments,
WHEREAS, Preposition 186 may undermine the sole remedy concept
of workers' compensation by allowing injured workers to sue
collateral sources, leading to a litigation explosion, and
weaken the workers' compensation reforms enacted in 1993,
WHEREAS, the vast shift of power to Sacramento embodied in
Proposition 186 will further undermine the ability of cities
and counties to provide for health needs of their constituents
at the local level,
BE IT THEREFORE RESOLVED THAT THE CITY OF
OPPOSES PROPOSITION 186 AND URGES CALIFORNIANS TO VOTE AGAINST
THIS MEASURE ON THE NOVEMBER 8, 1994 BALLOT
SAMPLE CITY RESOLUTION
IN OPPOSITION TO PROPOSITION 186
WHEREAS, Proposition 186 amounts to a state government takeover
of the entire health care system in California, including
programs administered at the local level,
WHEREAS, the $40 to $50 billion required to operate this new
system will double the size of state government,
WHEREAS, projected deficits in the new system will require
additional taxes or cuts in existing programs to close the
deficit, both of which will mean reduced revenues at the local
level,
WHEREAS, Local governments lose control over health programs
for their own employees and retirees,
WHEREAS local governments will be required to pay a payroll tax
on each employee to the state fund, as well as continuing to
provide funds for currently administered programs, thus
rendering local government little more than a collector of
health care funds with no control over how the money is spent,
WHEREAS the Public Employees Medical and Hospital Care Act will
be abolished and its funds absorbed by the state,
WHEREAS, the rich package of benefits in Proposition 186 will
likely attract non-residents to California seeking health care,
thereby imposing ancillary costs on local governments,
WHEREAS, Proposition 186 may undermine the sole remedy concept
of workers' compensation by allowing injured workers to sue
collateral sources, leading to a litigation explosion, and
weaken the workers' compensation reforms enacted in 1993,
WHEREAS, the vast shift of power to Sacramento embodied in
Proposition 186 will further undermine the ability of cities
and counties to provide for health needs of their constituents
at the local level,
BE IT THEREFORE RESOLVED THAT THE CITY OF
OPPOSES PROPOSITION 186 AND URGES CALIFORNIANS TO VOTE AGAINST
THIS MEASURE r'N THE NOVEMBER 8, 1994 BALLOT
W Taxpayers Against the "'
Government Takeover
Stop Government -Run Health Care
No on Proposition 186
Yesve,
.1'Il hUKp.!
List me as a supporter of the Coalition.
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fax limber
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❑ You can Get my name/organization pubk III as o member of Taxpayers Against the Government Tokeover.
1 can also help the Coalition In the following waTz:
❑ Display rrroterials in my place of business or home
❑ Write o "letter to the editor"
❑ Cao a radio or TY talk show
❑ Dishibute materials to friends and neighbors
❑ Ch.treocb to other civic and business organizations
I am active in the following groups:
Please mail or FAX this form to:
Taxpayers Against the Government Takeover
915 L Street, Suite C240
Sacramento, CA 95814
(916) 852.6494
FAX (916) 852.7954
For questions or to receive more information on the so-called
"California Health Security Act" call or write the Coalition.
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