Constitutional Amendment Proposed to Enact Tax Increases for CA Single-Payer Health Care System

Lawmakers say ‘comprehensive health care coverage for every resident of California is a right’

On January 5, Assembly Constitutional Amendment 11 was introduced by Assembly Members Ash Kalra and Alex Lee proposing to enact significant tax increases to fund universal single-payer health care coverage and cost controls. Co-authors include Assembly Members Mia Bonta, Wendy Carrillo, Laura Friedman, Adrin Nazarian, and Miguel Santiago, as well as Senators Dave Cortese, Lena Gonzalez, Sydney Kamlager, Mike McGuire, and Scott Wiener.

ACA 11 would propose an amendment to the California Constitution to add Section 16 to Article XIII B and to add Article XIII E. If passed by a 2/3 vote of each house of the Legislature, the measure would be placed on the statewide ballot in November to enact significant tax increases to fund health care coverage and cost controls.

ACA 11 would have to then be adopted by a majority of the statewide electorate in November. If enacted, it would impose an excise tax, payroll taxes, and a personal income tax in order to fund comprehensive, universal single-payer health care coverage, as well as a health care cost control system. In addition, if adopted by the voters, ACA 11 would authorize the Legislature, upon an economic analysis determining insufficient amounts to fund these purposes, to increase any or all of these tax rates by a statute passed by majority vote of both houses of the Legislature.

In addition, ACA 11 would establish the CalCare Trust Fund in the State Treasury and would deposit these tax revenues in that Fund for the purpose of funding this health care coverage, cost control system, and reserves, and would authorize the Legislature to appropriate these funds by a statute passed by a majority vote of the membership of both houses.

ACA 11 contains three findings and declarations, including that “comprehensive health care coverage for every resident of California is a right”; Californians will greatly benefit from having in place a comprehensive universal single-payer health care system; and, it is the intent of the Legislature to adopt a statutory program of comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of every resident of the state before tax revenues are levied pursuant to this measure.”

First, ACA 11 would add Article XIII B to exclude from the State Appropriations Limit the revenues from the CalCare Trust Fund collected to fund comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of every resident of the state, and reserves deemed necessary to ensure payment.

Second, ACA 11 would add Article XIII E, which would be titled, “Taxation to Fund Health Care Coverage and Cost Control.” It would impose the following state taxes for the purpose of funding comprehensive universal single-payer health care coverage:

• An annual excise tax upon a qualified business, as defined by the Legislature, for the privilege of doing business in this state at a rate of 2.3 percent of the gross receipts of that qualified business minus the first two million dollars in annual gross receipts of that business.

• A payroll tax on every employer who pays wages or other compensation to 50 or more resident employees for services performed either within or without this state at a rate of 1.25 percent of the aggregate amount of wages or other compensation paid by the employer to the resident employees.

• A payroll tax on every employer who pays wages or other compensation to resident employees for services performed within or without this state at a rate of 1 percent of the aggregate amount of wages or other compensation paid by the employer to the resident employees in excess of $49,900 per resident employee.

• An additional tax for each taxable year upon the entire taxable income of every resident of this state in the following amounts (and adjusted for inflation annually based on the California Consumer Price Index):

Third, ACA 11 would allow the Legislature in a specified instance to pass a statute by majority vote to increase any or all of the tax rates imposed above.

Fourth, ACA 11 would require all revenues derives from the taxes rates imposed above to be deposited into the CalCare Trust Fund for the sole purpose of funding comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of every resident of the state, and reserves deemed necessary to ensure payment.

Fifth, ACA 11 would authorize the Legislature to appropriate funds from the CalCare Trust Fund by a statute passed by an act approved by a majority vote of the entire membership of each of the two houses of the Legislature.

Sixth, ACA 11 would specify that any revenues derived from the taxes imposed would not be considered General Fund revenues or proceeds for purposes of education funding.

Finally, ACA 11 would not become operative until the Legislature establishes in statute comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of every resident of the state, as well as an act passed by the Legislature that establishes in statute the administration, collection, and enforcement of the taxes imposed by this article.