Introduction
The Children's Hospital Bond Act would raise additional money for children's hospitals in California. It would accomplish this through the sale of $980 million in bonds which would be repaid through the state's general fund. It would build upon the money already spent on children's hospitals by Proposition 61, which was approved four years ago. As with Prop. 61, Proposition 3 contains specific criteria for California children's hospitals to receive the funds. University of California children's hospitals are identified as eligible for the funds while other, non-profit children's hospitals would apply for access.
The money would be used for improvement projects including new construction, remodeling and renovation of hospital facilities.
Proposition 3
Children's hospitals provide specialized services to meet the unique needs of infants, children, and adolescents. Although they represent only a small percentage of the nation's hospitals, they provide a high level of medical care to their target population. A large number of children receiving treatment are from low-income families who do not have private health insurance. Proposition 61, approved by voters in November 2004, authorized the sale of $750 million in general obligation bond's to fund improvement projects at California's children's hospitals. Approximately 70% of the funds from Prop. 61 have been distributed to hospitals so far. Supporters of children's health care projects say that new funds will be needed over the coming years to pay for maintenance and improvement of the state's children's hospitals.
Proposition 3 would authorize the sale of $980 million in bonds to pay for capital improvement projects at children's hospitals throughout the state. Bond funds could be used for new construction, expansion, remodeling, and renovation of the hospitals as well as equipment and furnishings. Proposition 3 identifies the five University of California children's hospitals specifically as eligible recipients of the funds. They are designated 20 percent of bond proceeds. 80 percent of bond proceeds go to hospitals that focus on children with specific illnesses such as cancer, heart defects, diabetes, leukemia, and sickle cell anemia. Eight hospitals meet these eligibility requirements to receive Proposition 3 funds.
UC Children's Hospitals Eligible for Proposition 3 Funds
University of California, Davis Children's Hospital
University California, Irvine University Children's Hospital
University of California, Los Angeles Mattel Children's Hospital
University of California, San Diego Children's Hospital
University of California, San Francisco Children's Hospital
Other Hospitals
Children's Hospital Central California
Children's Hospital Los Angeles
Children's Hospital Oakland
Children's Hospital Orange County
Loma Linda University Children's Hospital
Lucile Salter Packard Children's Hospital at Stanford
Miller's Children's Hospital, Long Beach
Rady Children's Hospital, San Diego
Other Provisions
The California Health Facilities Financing Authority is mandated to create the grant application within within 90 days of the adoption of the proposition. Children's hospitals would apply in writing to the CHFFA, which would grant awards based on factors outlined in the official text of the initiative:
(1) The grant wiII contribute toward expansion or improvement of health care access by children eligible for governmental health insurance programs and indigent, underserved, and uninsured children.
(2) The grant will contribute toward thc improvement of child health care or pediatric patient outcomes.
(3) The children's hospital provides uncompensated or under compensated care to indigent or public pediatric patients.
(4) Thc children's hospital provides services to vulnerable pediatric populations.
(5) The children's hospital promotes pediatric teaching or research programs.
(6) Demonstration of project readiness and project feasibility.
The proceeds of the bond would be deposited into the newly created Children's Hospital Bond Act Fund.The $980,000,000 in bonds would be repaid from state's General Fund.The Legislative Analyst estimates that Proposition 3 will cost the state about $2 billion over 30 years to pay off both the principal ($980 million) and the interest ($1 billion) costs of the bond. The payments would come to about $67 million per year.
Reports and Studies
Drowning in Debt: Bond Measures Threaten California’s Already Precarious Debt Situation
By Adam B. Summers and Anthony Randazzo, Reason Institute, October 2008
Propositions 1A and 3: Should California authorize high-speed rail and children's bonds? California Budget Project. October 2008
.A Primer: The State's Infrastructure and the Use of Bonds. Sacramento: Legislative Analyst's Office, January 2006.