Bid to Undo Health-Care Law Blocked

SACRAMENTO — A judge on Friday blocked the secretary of state from putting a measure on the March election ballot that would ask voters to repeal a new state law requiring employers to provide health coverage for about 1 million uninsured workers.

The action by Sacramento County Superior Court Judge Lloyd Connelly is a victory for physicians and organized labor, which supported the law, and a setback for business groups, which denounced it as a new tax on employers.

In barring the referendum from the March ballot, Connelly ruled that the title and summary given to the proposed measure by the attorney general were “inaccurate and misleading.” He also found problems with the petition-gathering documents.

“They tried to deceive the public into thinking the [new law] applied to small business and it did not,” said Steve Thompson, executive officer of the California Medical Assn., a sponsor of the bill that was signed two months ago by former Gov. Gray Davis.

The new law by Sen. John Burton (D-San Francisco) will expand health insurance to roughly 1 million Californians by requiring businesses with 200 or more employees to provide health-care coverage for workers and their families beginning in 2006 or pay into a state insurance fund. In 2007, companies with 50 to 199 employees will be required to cover their workers but not workers’ families.

In each case, the employer will pay at least 80% of the cost and the employee the remaining 20%.

The law exempts businesses with payrolls of 20 to 49 people until the state can afford to offer a tax credit to offset some of the cost. Employers with fewer than 20 workers are exempt entirely.

The California Chamber of Commerce vowed to quickly appeal Connelly’s decision.

“Over 620,000 voters signed petitions to put this on the ballot, and voters deserve the right to decide whether they want a $7-billion health-care tax in California,” said chamber spokeswoman Sara Lee. “We’re disappointed the court put technicalities above the right of the voters.”

The referendum had not yet qualified for the March 2 ballot. Secretary of State Kevin Shelley had been reviewing it and concluded, according to a Dec. 9 letter to Connelly, that its backers had violated election law. The petitions they used to gather signatures failed to include a brief description of the subject matter at the top of most pages, as the law requires, Shelley wrote.

Connelly’s decision came as a result of a temporary restraining order filed by Burton and Sen. Jackie Speier (D-Hillsborough). They argued two points: that the petition-gathering pages violated election law and that the title and summary written for the ballot measure by the attorney general were inaccurate.

“I think it’s good,” Burton said. “The ballot summary was wrong; it was misleading.... Now they have to start all over.”

Shelley said after the ruling: “I am pleased that the court provided a quick decision, and I will proceed accordingly.”

The California Labor Federation, AFL-CIO, which made passage of Burton’s bill a top legislative priority this year, praised the verdict.

“The forces behind the referendum have shown that they will stop at nothing to repeal this sensible law that protects health care for millions of hard-working California families,” said Executive Secretary-Treasurer Art Pulaski. “The court wisely threw this misleading referendum off the ballot.”

Shelley had been preparing to publish a supplemental voter information guide for the March 2 ballot that included the health insurance law referendum. It costs several million dollars to print a secondary guide for measures that qualify late for the ballot.

Supplemental voter guides still will be needed for the two ballot measures pushed by Gov. Arnold Schwarzenegger and approved Friday by the Legislature. Those measures will ask voters to approve a $15-billion bond issue to help balance this year’s budget and to impose a limit on future state spending.