Health tax called sure loser

Gov. Arnold Schwarzenegger and Assembly Speaker Fabian Núñez would be courting defeat at the ballot box by bypassing Republicans with a measure to increase taxes to provide health care for uninsured Californians, Assembly Republican leader Mike Villines said Tuesday.

The Los Angeles Times reported Saturday the Republican governor and Democratic speaker are fashioning a strategy to raise business and hospital taxes through a ballot measure and circumventing Republican lawmakers who oppose any new taxes.

Under the scenario outlined by the newspaper, the Democrats who control the Legislature would pass a bill that doesn't include funding for health care and ask voters to raise taxes.

But Villines predicted voters would defeat such a measure. The governor, he said, also would be reversing himself by not including Republicans in the process.

"The governor has been very clear about saying he wants Republicans there," Villines said. "That does rule out taxes, we understand that. But I think there's still things we can support."

Sabrina Lockhart, a spokeswoman for the governor, said "the governor is still committed to getting bipartisan votes, but a ballot measure is an option."

In an interview with The Bee, Núñez said, "We're a long way away from any type of agreement." But he added, "I will not go to the voters with a proposal in lieu of a legislative solution."

The speaker said Assembly Bill 8, which he put together with Senate President Pro Tem Don Perata, would provide 75 percent of the money to cover the 6.7 million Californians without health insurance. Núñez said a possible ballot measure could provide the remaining 25 percent.

Schwarzenegger has said he will veto AB 8 because it would place the economic burden on employers. The governor believes costs should be shared by employers, employees, insurers and government.

Leaving all the financing to the ballot is not an option, said Núñez, D-Los Angeles.

"I'm not going to compromise to put all of the funding for AB 8 on the ballot and be left with a shell (bill)," Núñez said.

According to the Times, the plan Schwarzenegger and Núñez are developing would require all Californians to have health insurance -- which the governor has proposed and Núñez opposed -- and provide subsidies to those unable afford coverage.

But Núñez said he's never agreed to "sign on to an individual mandate." "I think the main thing is the question of affordability," he said.

Lockhart said the governor, who met with Perata and Núñez on Tuesday, is focused on reaching a health care compromise before the Legislature adjourns next week and "thinks his financing plan is the best way to go."

Schwarzenegger's plan would require employers to spend 4 percent of their payroll on medical care for their workers or pay a fee to the state. Hospitals would pay 4 percent of revenue and doctors 2 percent to help pay for his plan.

The Democratic plan would not impose fees on hospitals, which are considering whether to agree to the governor's plan, or doctors, who oppose the fees.

The California Hospital Association met throughout the holiday weekend with the governor's staff, and its board of directors held a conference call Tuesday.

"The conversations were productive (and) we're making some progress, but we still have not resolved all of our issues," said Jan Emerson, a spokeswoman for the association.

In an effort to head off a mandate on employers, the California Restaurant Association, California Retailers Association and California Small Business Association have proposed a ballot initiative proposing a 1-cent sales tax to fund health care reform.

Republican legislators oppose any fee increases and favor incremental efforts to make health care more accessible.

There are only five non-weekend days left in the regular legislative session. Lawmakers plan to adjourn Sept. 12 -- two days early -- in observance of the Jewish High Holy Days.

Perata said there's still time to reach "an agreement in concept," but "we may want to have a special session just to air it out, publicly."

Schwarzenegger announced last week he has canceled a trip to England and postponed a trade mission to India in case he needs to call a special legislative session that could deal with health care, water storage and redistricting reform.

About the writer:

• The Bee's Aurelio Rojas can be reached at (916) 326-5545 or arojas@sacbee.com.