Governor’s No-Tax Pledge Could Affect Health Care Reform

A campaign pledge by Gov. Arnold Schwarzenegger (R) not to raise taxes could hinder his promise to address health care reform in 2007, the Sacramento Bee reports.

Although a portion of the revenue from Proposition 86, the proposed tobacco tax measure, would have provided insurance coverage for every child in California, Schwarzenegger opposed the measure because he refuses to add new taxes.

An estimated $2.1 billion in revenue from Proposition 86 would have provided about $300 million annually to help fund universal child's health insurance. State voters rejected the measure in Tuesday's election.

A poll this year by the United Ways of California, found that 83% of likely voters support universal health insurance for children, but Schwarzenegger said that current budget restraints prohibit such a plan.

Health care advocates are optimistic that the governor will include children's health insurance coverage in a health care reform plan he is expected to announce in January 2007 (Benson, Sacramento Bee, 11/13).

Schwarzenegger's dependence on the economy in determining state funding for programs such as universal health insurance for children has analysts concerned, the Contra Costa Times reports.

The governor says that refusing to raise taxes will boost the economy and generate more revenue. However, he also has said the state's tax structure can cause revenue to fluctuate.

Brad Williams, director of fiscal forecasting for the Legislative Analyst's Office, said, "If you can't raise taxes and have a budget shortfall, it's going to be awfully hard to make progress in any of those areas," such as health insurance.

The Times reports that because of Schwarzenegger's opposition to tax increases, he either must cut spending to fund expanded health insurance programs or let the program's fate depend on the economy (Zapler, Contra Costa Times, 11/12).

The greatest risk to the current U.S. health care system is that "poor government policies will destroy it," according to a San Diego Union-Tribune editorial.

Although the governor recently signed a law to create a drug discount program, "all is not lost" because Schwarzenegger and a panel of health care experts are planning new policies set to be unveiled in January 2007. In working to address health care reform, the governor likely will invoke his model "that rescued California's dying workers' compensation system," according to the Union-Tribune (San Diego Union-Tribune, 11/12).