Unions Square Off With Governor Over Revised Health Reform Plan

On Wednesday, the California Teachers Association criticized a proposal by Gov. Arnold Schwarzenegger (R) to partially fund his health care plan by leasing the state lottery, a move that the union warns could jeopardize funding for schools, the San Diego Union-Tribune reports (Mendel, San Diego Union-Tribune, 10/18).

Under the governor's proposal, a private management company would pay $37 billion for a 40-year lease of the state lottery. The state would use the money to create an annuity of $2 billion annually to help fund the governor's plan to overhaul the state health care system.

Education, which currently receives about $1.1 billion annually from the lottery, would be unaffected, according to the governor's proposal. The state would replace that funding with money from the state general fund (California Healthline, 10/15).

At a hearing of the Senate Governmental Organization Committee, Fred Klass of the Department of Finance testified that nine Wall Street firms have projected that the state could generate $15 billion to $65 billion through a lottery lease, if per capita lottery revenue is increased and some modifications are permitted (San Diego Union-Tribune, 10/18).

If the lottery lease generates only $15 billion, KQED's "Capital Notes" reports that health care reform could receive considerably less money than the governor projected (Myers, "Capital Notes," KQED, 10/17).

The Senate committee said that leasing the lottery would require voter approval.

At the hearing, representatives for the teachers union warned that using money from the general fund for education could strain other expenditures, including health care, welfare and higher education initiatives. The union argued in favor of continuing to use lottery revenue to fund education.

The Schwarzenegger administration contends that the general fund could provide more money to schools over the long term than the lottery system (San Diego Union-Tribune, 10/18).

Video of the committee hearing is available on The California Channel's Web site (The California Channel Web site, 10/18).

The California Teachers Association was not the only union mounting opposition to the governor's health care reform plan on Wednesday, as a coalition of other labor groups kicked off 48 hours of protest vigils outside the Capitol in Sacramento and the governor's district offices, the Sacramento Bee reports. The vigils were announced earlier this week in reaction to Schwarzenegger's release of a revised health care plan.

The revised plan would require all residents to obtain health insurance coverage, while offering subsidies to certain income brackets.

Union leaders argue that many low- and middle-income families still would not be able to afford coverage.

According to a report by the California Labor Federation, the plan would cost the average middle-class family between $8,100 and $13,000 annually.

Sabrina Lockhart, spokesperson for Schwarzenegger, contested the report, arguing that the findings were based on "fuzzy math" and provisions from the original reform plan released in January.

The labor unions supported AB 8, a health care reform bill by Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland) that would have been largely funded by employer contributions.

Schwarzenegger vetoed the bill last week (Rojas, Sacramento Bee, 10/18).

Capital Public Radio's "KXJZ News" on Thursday reported on the labor union's efforts. The segment includes comments from:

• Bill Camp of the Sacramento Central Labor Council; and
  
• Schwarzenegger press secretary Aaron McLear (Russ, "KXJZ News," Capital Public Radio," 10/18).