November 2, 2004 Ballot Prop. 61

Introduction

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. There are currently 13 regional children's hospitals in California, including the five University of California children's hospitals. Proposition 61, or the Children's Hospital Bond Act of 2004, would raise money for improvement projects at specified children's hospitals in California by authorizing the state to sell $750 million in bonds.

Proposition 61

California uses bonds to finance major public works projects such as roads, schools, office buildings, prisons and parks. Proposition 61 authorizes the state to sell $750 million in general obligation bonds for improvement projects at children's hospitals. Their repayment is guaranteed by state tax revenues. Most recently sold general obligation bonds are paid off over a 30 year period. The interest rate for general obligation bonds is currently around 5.25%, and the cost of paying them off is about $2 for each dollar borrowed (An Overview of State Bond Debt, Legislative Analyst's Office).

The measure specifically identifies the five University of California children's hospitals as eligible recipients for the bond-funds. Other children's hospitals are also likely to meet the eligibility criteria specified in the measure.

Children's Hospitals Eligible for Proposition 61 Bond Funds 

Specifically Identified as Eligible
Mattel Children's Hospital at UCLA
University Children's Hospital at University of California, Irvine
Davis Children's Hospital, University of California, Davis
San Diego Hospital Children's Hospital, University of California
San Francisco Children's Hospital 

Likely to be Eligible
Miller's Children's Hospital, Long Beach
Lucile Salter Packard Children's Hospital at Stanford
University Children's Hospital
Children's Hospital of Orange County
Children's Hospital and Research Center at Oakland 
Children's Hospital Los Angeles 
Children's Hospital and Health
San Diego Children's Hospital Central California

The money raised from the bond sales could go to pay for a wide range of projects including new equipment, new housing, expanded and renovated buildings, financing and administrative costs. Eighty percent of the money would be available to nonprofit children's hospitals and the remaining 20 percent would be available exclusively to the University of California children's hospitals. The hospitals would be required to apply in writing for the funds. The CHFFA (the California Health Facilities Financing Authority) would oversee the grant process and decide on the merit of each request. They would award grants within 60 days. According to the Legislative Analyst's office, the state cost would be about $1.5 billion over 30 years to pay off both the principal debt of $750 million and the interest of $800 million. The state would make payments of about $50 million per year. The California Health Facilities Financing Authority would also incure minor administrative costs.

Proponents of the proposition claim that children's hospitals provide vital assistance to children who suffer from life-threatening illnesses and injuries, and that the initiative will provide much needed funds for additional space. They point to children's hospitals role in performing the majority of specialized treatment for children in the state, including heart surgery, organ transplants, and cancer treatment. With the rate of patients rising, they argue that additional funds are needed to expand hospital facilities. The proposition is supported by a number of children's health organizations.

Opponents of the measure cite the state's current financial problems including a $14 billion deficit in 2004 (Governor's Budget Summary). They argue that the debt with interest is simply too costly for the state to manage. The offical ballot pamphlet argument against the proposition, by attorney Gary B. Wesley, states that California-run hospitals as well as nonprofit hospitals charge the uninsured high rates for treatment, making the system unfair. He advocates a restructuring of the entire state health system to guarantee all Californians health care.

Official Voter Information

Via the California Secretary of State. The text, legislative analysis and ballot arguments are from the Official Voter Information Guide. Campaign finance data is from the Cal-Access database of campaign receipts and expenditures.

Voter Information Guide

Campaign Finance:
Individual Campaign Committees
Total Contributions and Expenditures (select "Nov. 2004 election" and "Prop. 61" in dropdown boxes)

Key Websites

Ballotpedia
League of Women Voters  
HealthVote2004.org
HealthVote2004.org provides voters with facts and non-partisan analysis, as well as easy access to information on who supports and opposes the measures, who is paying for the campaigns, how much is being spent, results of statewide polls, and the latest news. HealthVote2004.org is a collaboration between two non-partisan, non-profit organizations-the California HealthCare Foundation and The Center for Governmental Studies.

Public Opinion

"Health-Related Propositions: Support for Prop. 71, Stem Cell Research Bond, continues to grow. Voters moving to the No side on Prop. 72, Health Insurance Requirements," Field Poll, Release #2147, October 31, 2004.

"Health-Related Propositions: Prop. 72 (health coverage) ahead by 16 points. Prop. 61 and 63 also lead, but Prop. 67 trails," Field Poll, Release #2140, October 12, 2004.

"Voters sharply divided on stem cell research bond measure. Favor two other health-related propositions but oppose a fourth," Field Poll, Release #2130, August 15, 2004.