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Proposition 4 is an unnecessary windfall for hospitals

What you need to know about Proposition 4: Money for children’s hospitals

What is Proposition 4? Here's a deeper look at the initiative on California's November ballot that would authorize bonds for expanding and building children's hospitals.
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What is Proposition 4? Here's a deeper look at the initiative on California's November ballot that would authorize bonds for expanding and building children's hospitals.

I know from personal experience the importance of children’s hospitals. Six decades ago, I had heart surgery at the best one in Illinois. It saved me from an early death.

Yet I’m voting “no” on Proposition 4, the Nov. 6 measure to authorize $1.5 billion in bonds to support construction at the 11 officially designated children’s hospitals ion California – eight non-profit private hospitals and five University of California medical centers.

Opinion

This measure is intended to primarily to benefit the same hospitals that are funding the “yes” campaign. It bypasses the legislative process, which is a better way of determining how taxpayer dollars should be spent.

Proposition 4 is the third bond measure sponsored by the California Children’s Hospital Association, which represents the eight private hospitals that will receive 72 percent of the money. If the association could have persuaded the Legislature to put this measure on the ballot, it would undoubtedly have done so. Lobbying is less expensive than mounting an initiative campaign.

But the governor and Legislature have more complete information about whether these hospitals need the money and whether they can raise it in other ways. In 2015 Lucile Packard Children’s Hospital spent $263 million less than it received in revenue -- nearly double the amount that it would receive from the bond measure. Of the six hospitals whose tax filings could be located, four had profits in both 2014 and 2015. These hospitals can fund capital projects either through revenues or fundraising campaigns.

Elizabeth Wall Ralston.JPG
Elizabeth Wall Ralston

None of these hospitals are skimping on executive compensation, either. The CEO at every one of these hospitals received more than $1 million in 2015.

Each of the association’s member hospitals has contributed $681,500 to fund this measure, and will receive $135 million each if it passes. That’s $198 for every dollar contributed, a remarkable return on investment.

But taxpayers will have to pay an average of $80 million a year over the next 35 years – money that that will not be available to deal with other important needs such as affordable housing and aging infrastructure.

Vote against “ballot box budgeting.” Vote “no” on Proposition 4.

Elizabeth Wall Ralston is a past president of the League of Women Voters of Los Angeles and analyzes state finance measures for the League of Women Voters of California. She can be contacted at ewralston@ewralston.com.

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