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Healthy San Francisco Allowed to Continue and Update on AB X1 1

January 10, 2008
On January 9, 2008, the Ninth Circuit Court of Appeals ruled that Healthy San Francisco would be allowed to take affect, overriding the December 26th, 2007 challenge of San Francisco Superior Court judge, Judge Jeffrey White. Judge White challenged the program after a lawsuit was filed by the San Francisco restaurant industry; Healthy San Francisco includes a payroll tax of $1.17 to $1.75 per hour on businesses that do not offer health benefits to employees, which would affect a lot of the restaurant industry. White stated that Healthy San Francisco conflicted with the 1974 Employee Retirement Income Security Act (ERISA) that prohibits state and local governments from regulating employees' benefits with the intention to assure that multi-state businesses do not have to contend with a hodgepodge of rules about benefits for each city, county, and state in which they operated. The city of San Francisco appealed White’s decision to the Ninth Circuit Court of Appeals, which yesterday ruled that Healthy San Francisco will take effect; additionally, the court said there was a strong likelihood the city would ultimately prevail in its defense of the ordinance.

Healthy San Francisco is an amazing program and a useful prototype for the rest of the state, especially considering the current statewide health care reform. In addition, the program's expansions are very helpful to artists without health care; as first presented in an earlier Artists United for Healthcare posting, the program will provide health care to San Francisco residents for a nominal monthly payment and per visit fee. In this manner, San Francisco's artists and other residents will have accessible and affordable health care through Healthy San Francisco. Importantly, the court's January 9 decision also strengthens the legal standing of the proposed AB X1 1 as it also depends, in part, on funding from employers.

The last Artists United for Healthcare update reported that Governor Schwarzenegger and Assembly Speaker Fabian Nunez were in a celebratory press conference on December 17th right after AB X1 1 passed the Assembly. On Friday, December 28, Governor Schwarzenegger and Assembly Speaker Nunez filed with the Attorney General the initiative that accompanies AB X1 1; the initiative contains some of the financing for AB X1 1 including a $1.75 tobacco tax and a minimum employer contribution from 1% to 6.5 % of payroll based upon the entire monetary value of the payroll. In addition, the California Department of Finance has testified that the plan would have no impact on the state budget as it uses its own sources of revenue to pay for itself and will shut down if there are no sufficient funds.  AB X1 1 is now scheduled to go in front of the Senate Health Committee on January 16th and, if passed, would represent the largest public program expansion in more than 40 years.

On January 8, Governor Schwarzenegger gave his State of the State address; while much of his speech addressed the budget deficit, the governor reiterated the need to reform the health care system.