Schwarzenegger Support for Repeal of Employer-Sponsored Health Coverage Law Part of Campaign To Improve Business Climate
In its Oct. 4 issue, BusinessWeek examined Gov. Arnold Schwarzenegger's (R) "ambitious plan to make the Golden State more business-friendly," which includes addressing "skyrocketing medical insurance" costs, one of state businesses' "biggest concerns" (Grover, BusinessWeek, 10/4).
Schwarzenegger has said that he will urge state residents to vote "no" on Proposition 72 to repeal SB 2, a state law that will require some employers to provide health insurance to workers or pay into a state fund to provide such coverage. Under Proposition 72, a measure on the Nov. 2 statewide ballot, state residents can vote "yes" to uphold or "no" to repeal the law.
SB 2 will require employers with 200 or more employees to provide health insurance to workers and their dependents by 2006 or pay into the state fund. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007.
Companies with fewer than 20 workers will not have to comply with the law, and the law also will exempt employers with 20 to 49 workers unless the state provides them with tax credits to offset the cost of health coverage (California Healthline, 9/27). Opponents of the measure say it would cost employers in California $7 billion by 2007.
According to BusinessWeek, Schwarzenegger plans to "put down his veto pen and tak[e] to the stump" to campaign for the repeal of SB 2. If the law is repealed, Schwarzenegger's success would allow him to show that the state "is turning the corner" to become more business-friendly, BusinessWeek reports.
However, he "has a long way to go," as several labor unions intend to fight the governor on the issue, according to BusinessWeek.
Art Pulaski, executive secretary treasurer of the California Labor Foundation, said, "He's kicking the California worker in the gut" (BusinessWeek, 10/4).