(September 29, 2004) The Employment Policies Institute (EPI), a non-profit research organization dedicated to studying public policy issues surrounding employment growth, earlier this week released a study finding that California will lose as 150,000 lost jobs if Proposition 72, the multi-billion dollar health care scheme, passes in November.

“Just as California’s economy begins to rebound, we cannot afford this multi-billion dollar tax on employers and workers,” said Zaremberg. “Prop 72 does absolutely do nothing to solve the real problem with health care, which are skyrocketing healthcare costs. In fact, Prop 72 will only make the problem worse.”

The EPI study found that Prop 72’s costs and risks far exceed its potential benefits because:

• Proposition 72 will cost businesses up to $12.9 billion a year;
• California could lose up to 150,000 jobs.  Most of these are displaced employees who tend to be younger, poorer, less educated, and disproportionately minorities.  Further, the study found that while Hispanics make up only 30 percent of the workforce, they will bear 53 percent of the job losses;
• Only 31 percent of uninsured Californians would receive new coverage because of Prop 72’s high costs.  Of every dollar, only 30 to 35 cents spent under the initiative goes toward covering the uninsured.

For a full copy of the study, please visit www.epionline.org/study.

If Proposition 72 is not rejected in November, beginning in 2006, businesses with 200 workers or more would have to pay a tax to a government agency to fund a new government run healthcare scheme or provide at least 80 percent of healthcare coverage for employees and their dependents.

Employers with 50 to 199 workers would pay the tax or provide coverage for employees beginning in 2007, while businesses with 20-49 workers would pay the tax for employee coverage when a partial tax credit is enacted. The tax credit proposed in SB 2 would cover only a small amount of the real costs and burdens this scheme would place on small employers. And employees themselves, whether they want or need coverage, would be required to pay 20 percent of their health care costs.  The mandate to provide coverage also extends to employees working less than 35 hours a week but more than 100 hours a month.

By placing a new multibillion-dollar mandate on employers, SB 2 will drive jobs and employers out of California or force them to cut other benefits or simply close their doors. In addition to these consequences, SB 2 will do absolutely nothing to address the true problem of the health care system -- skyrocketing costs.

The Chamber is urging a “no” vote on Proposition 72 in November because it will have a detrimental effect on California’s recovering economy while providing no real solution to the state’s health care problems.

For more information on Proposition 72 or to join the coalition, please visit the Californians Against Government Run Healthcare website at www.noprop72.org.

Information about Proposition 72 is also available on the Chamber’s website at www.calchamber.com.