Proposition 44

Requires Community Health Clinics Spend 90% of Revenue on Program Services. Initiative Statute.

Fiscal Impact

Low tens of millions a year in state enforcement costs, covered by fees (LAO estimate)

Short Term

State spends

State raises

State pays low tens of millions of dollars a year to enforce the clinic spending rule.

Long Term

State spends

State raises

Same every year — and the cost is covered by fees charged to the clinics.

Nonprofit Federally Qualified Health Centers — community clinics serving medically underserved areas — must spend at least 90% of revenue on program services, including patient services.
The LAO says clinics currently report spending about 80% of revenue on health care services on average, with state enforcement costs covered by fees charged to clinics.
Supporters say the 90% rule will direct clinic revenue to patient care — medical visits, mental health, dental care, medications, and equipment — instead of executive pay and overhead.
Opponents say the rule will cut $1.7 billion from clinics in the first year and force clinics to reduce services or close.

Community health clinics must spend at least 90% of their revenue each year on program services like patient care, or face penalties.

No argument in favor of this measure was submitted to the official voter guide.

Community health clinics are not held to this 90% spending rule.

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Cost (Legislative Analyst): Increased state costs in the low tens of millions of dollars per year, covered by fees.