The RCJ votes Yes. We recognize that funding requirements will likely include unplanned infrastructure requirements, but overall we like the mission focus.
Proposition 44 would require certain nonprofit community health clinics to spend at least 90% of their annual revenue on “program services” advancing their charitable mission, including healthcare services. Clinics falling below the 90% threshold could face a penalty equal to the amount needed to reach the requirement, although they could recover the penalty if they subsequently comply.
What would Proposition 44 do?
The measure applies to private nonprofit Federally Qualified Health Centers and other safety-net community clinics serving medically underserved populations. California has roughly 2,000 safety-net clinics. According to the Legislative Analyst, these clinics currently spend an average of about 80% of their revenue on healthcare services, although the percentage varies considerably among clinics.
Under Prop. 44:
- At least 90% of annual revenue would have to go toward qualifying program services.
- The Attorney General would determine which expenditures qualify.
- Clinics falling below 90% would face a financial penalty.
- Penalties could be refunded if a clinic subsequently meets the requirement within five years.
- The Department of Public Health could grant temporary waivers in exceptional circumstances.
- Knowingly falsifying financial information could result in criminal penalties.
The argument for Proposition 44
Supporters say the measure is fundamentally about putting patients ahead of excessive administrative and executive spending.
Their argument is that community clinics receive substantial public funding to serve low-income and medically underserved Californians, and that too much money can be diverted toward administrative expenses and executive compensation. Requiring 90% of revenue to support the clinics’ charitable mission, they argue, would increase transparency and ensure that more money reaches patients.
The principal supporter is:
- SEIU–United Healthcare Workers West (SEIU-UHW), the healthcare workers’ union that sponsored the initiative.
The campaign is Yes on Prop. 44, and SEIU-UHW is essentially its principal financial backer. The Secretary of State reported approximately $16.9 million in contributions to the supporting committee through August 2, 2026.
The argument against Proposition 44
Opponents argue that the 90% formula is too rigid and could actually harm the patients the measure is intended to protect.
They point out that clinics need to spend money on things such as information technology, appointment scheduling, translation, referral coordination, facilities, administration, compliance and other infrastructure that makes healthcare possible. They argue that the measure’s definition of qualifying expenses is insufficiently clear and that the Attorney General would have considerable discretion in deciding what counts.
Opponents also cite a study commissioned by the California Primary Care Association estimating that clinics could face as much as $1.7 billion in penalties during the first year. That figure is a campaign-sponsored estimate rather than the state’s official fiscal projection.
The Legislative Analyst takes a more cautious position, saying the measure could produce additional costs and could cause some clinics unable to meet the requirement to close, but that the magnitude is uncertain.
Who opposes Proposition 44?
The opposition coalition is considerably broader than the support coalition. It includes:
- California Primary Care Association
- California Medical Association
- American Academy of Pediatrics–California
- California Academy of Family Physicians
- Planned Parenthood Affiliates of California
- California Hospital Association
- California School Nurses Organization
- American College of Emergency Physicians, California
- National Association of Social Workers, California Chapter
- California Democratic Party
The principal opposition campaign is No on Prop. 44 — Stop the Attack on Patients and Community Health Clinics, sponsored by the California Primary Care Association. Through August 2, the opposition committee had reported about $34.9 million, more than twice the amount reported by the supporting committee.