Prop 52 is the poster child proposition for the reason why California has an Initiative, Referendum & Recall system of law-making: No one trusts the government to do the right thing.
Prop 52 just codifies the shell game that California plays with tax revenues earned from private hospitals. In 2009, the state began taxing these hospitals to help fund Medi-Cal. Totaling around $4.6 billion, this triggers matching grants from the federal government to the tune of $4.4 billion. The state, in turn, gives back the money to the hospitals which triggered the matching funds. Quite a scheme, huh? For some reason, the federal government has no problem with it. So, California gladly accepts their money.
The California Hospitals Association doesn’t trust that our legislators will keep their hands off of the money that has been returned to them, so they funded the signature gathering necessary to put this one on the ballot. A “yes” vote makes this money game into law and continues the tax on hospitals. A “no” vote ends the tax on January 1, 2018, also ending the matching funds from the federal government. There are literally zero organizations who publicly advocate a “no” vote.
Here’s more info from the state’s Legislative Analyst’s Office:
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