Opponents of Proposition 61 Question Accountability as Children’s Hospitals Make Plans for New Funding

Children's hospitals across the state are planning expansions and improvements after the passage on Nov. 2 of a ballot measure that expands their funding, as critics continue to contend that the measure is "a clever attempt to get the state to help underwrite their existing expansion plans," the Los Angeles Times reports (Covarrubias, Los Angeles Times, 11/9). State residents last week voted to pass Proposition 61, which will provide $750 million to pay for construction, expansion and equipment for children's hospitals and will cost about $1.5 billion over 30 years (California Healthline, 11/8).

Some opponents are concerned that the measure does not establish regular spending audits and could lead to waste. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said, "There were certainly some well-financed special interests that will do quite well off Prop. 61. Like most bond expenditures, people in five to 10 years will find out the money was not well spent, with 80% going to private institutions, not public institutions."

Supporters of the measure counter that although specific audits are not required, the Bureau of State Audits can perform one at any time. Charity Bracy, vice president of the California Children's Hospital Association, said, "There's a lot of accountability. It's not like they're going to get a big check and they can spend the money how they want. They have to report back within a certain amount of time on how the money was spent" (Los Angeles Times, 11/9).

Thirteen hospitals in the state qualify to apply for part of the funds, and the state will begin to accept applications in January after a statewide finance committee is established. The funds likely will remain available for 10 years, according to experts. The state will divide the $750 million into two funds -- $150 million for five University of California hospitals and $600 million for the eight children's hospitals in California that provide care for the sickest children (California Healthline, 11/8).

Proposition 61 funds only can be used for "capital improvements," such as construction and furnishings. Officials for children's hospitals have said they would use the funds to expand the number of beds, remodel and expand buildings and, in some cases, pay for the required earthquake retrofitting, among other projects. Some long-term expansion projects already are under way. Projects must be completed within a "reasonable" period of time or hospitals might have to return some or all of the funds, the Times reports (Los Angeles Times, 11/9).