With a new state-run healthcare system under debate in the California Legislature, concerns continue about how the proposed funding mechanism would increase exponentially tax burdens on California residents and businesses.
While the state has considered a single-payer system before and Gov. Gavin Newsom campaigned on a pledge to establish it, paying for it remains a controversial proposition, especially in an election year, John Kabateck, California state director with the National Federation of Independent Business (NFIB), told the Northern California Record.
“This proposal is probably one of the most ill-conceived to come out of Sacramento in recent years,” Kabateck said. “Right now, it's estimated to impose upwards of $200 million a year in new taxes on small businesses and the middle class all at a time when our state coffers are flush.”
Earlier this month, Gov. Gavin Newsom estimated the state’s budget surplus at more than $45 billion, ABC 7 reported.
NFIB signed a coalition letter to Assembly members with detailed concerns about the single-payer plan.
“Our NFIB surveys have shown that small business optimism in California is at record lows,” Kabateck said. “They’re not only facing the worst crisis to hit Main Street in decades, they're also confronting record inflation, supply chain disruption, and retail theft.”
The structure of the bill, AB 1400, was put forth by Assemblymember Ash Kalra, D-San Jose, and passed by two committees earlier this month. The Assembly Floor vote is expected Monday, but late last week the California Democratic Party was threatening to hold back funding from those who don’t vote for the measure, KFBK Radio reported.
Assembly Republicans have called for an independent fiscal assessment from the Office of the Legislative Analyst, the Sacramento Bee reported.
Should it pass the Legislature, the funding mechanism, which would include payroll and gross receipts in a slate of taxes, would have to go before the voters as a constitutional amendment, ACA 11, according to the Tax Foundation.
“Taxes and healthcare in the hands of a broken bureaucracy are just not popular,” Kabateck said.
As of 2021, 94 percent of Californians had health insurance, according to a report from the UCLA Center for Health Policy Research.