Proposition 44 — The Clinic Funding Accountability and Transparency Act

No on Proposition 44

The Clinic Funding Accountability and Transparency Act

What is it?

Prop 44 penalizes certain nonprofit health clinics that spend less than 90% of their revenue on their mission. The penalty equals the shortfall.

It covers nonprofit clinics that are federally qualified health centers, or FQHCs, plus "FQHC Look-Alikes" that meet the federal rules without getting an FQHC award. Tribal and urban Indian organizations are excluded, and so are hospitals and private practices.

Each covered clinic would send the Attorney General two numbers every year: what it spent on its mission, and its total revenue, both starting from figures the clinic already reports to the IRS. The Attorney General divides one by the other to get a "Mission Spend Ratio," then publishes it.

The 90% penalty

If a clinic's ratio comes in below 90%, the Department of Public Health charges a penalty equal to the whole gap: 90% of the clinic's total revenue, minus what it actually spent on its mission. The measure never states the 90% figure as a spending mandate. It enforces it through this penalty.

Penalty money goes into a state escrow account, and a clinic can ask the Department of Public Health for a waiver of the 90% requirement.

The measure's findings talk about clinic executive pay, but the operative sections do not cap or regulate pay. Executive pay counts against the ratio the same way any other non-program expense does.

Read the full annotated legal text →

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Fiscal impacts

In its final analysis for the state voter guide, the Legislative Analyst's Office estimates increased state costs in the low tens of millions of dollars per year to enforce the requirement, covered by fees charged to the affected clinics. The LAO notes clinics currently report spending an average of about 80% of revenue on providing health care services, below the measure's 90% line, so the penalty would apply widely. Other effects are uncertain and depend on how the Attorney General defines health care expenses and how clinics respond: some might spend more on patient services, raising state Medi-Cal costs, while others might close, shifting patients to publicly operated providers.

Why is this on the ballot?

Prop 44 is a signature-gathered statewide initiative, filed with the Attorney General's office as Initiative 25-0008. It originated with SEIU-United Healthcare Workers West, which says it targets clinics that divert revenue away from patient care toward executive pay and overhead.

According to Article II, Section 8 of the California Constitution, citizens may introduce statutes (laws) by collecting signatures (5% of the votes cast in the most recent Governor's race). The statute must then be approved by voters with a simple majority of 50% + 1.

Placed on ballot by: Signature-gathered initiative petition; qualified in May 2026.
Official proponents: Shawna Brown and Sean Fleming, per Ballotpedia.
Sponsor and funder: SEIU-United Healthcare Workers West (SEIU-UHW West), through its committee Californians for Responsible Healthcare.
Official ballot title: "Requires Community Health Clinics Spend 90% of Revenue on Program Services. Initiative Statute." Fiscal impact label: "Increased state costs in the low tens of millions of dollars per year, covered by fees."

Why vote No?

Prop 44 is SEIU-UHW's fourth try at regulating a healthcare industry by ballot measure, after voters rejected all three of its dialysis initiatives. The target this time is nonprofit community clinics, where operators say the union is organizing, and the tool is a rule that every clinic spend at least 90% of its revenue on "mission-related expenses."

A 90% floor sounds reasonable. But everything else a clinic pays for has to fit into the other 10%, and the Legislative Analyst's Office found that clinics today average about 80%, so most community clinics in the state would owe a penalty. That penalty is the entire shortfall. The measure also never defines its central term: the Attorney General writes the definition after the election, so a clinic that pays for patient vans or community outreach could be penalized like a profiteer. An analysis commissioned by the clinics puts first-year penalties at $1.7B, and the clinics are suing in federal court to stop it.

The people who actually run the safety net, the California Primary Care Association, the California Medical Association, and Planned Parenthood, all oppose it, at a moment when federal Medicaid cuts are already squeezing clinics that serve 4.2 million Medi-Cal patients. A labor dispute belongs at the bargaining table. Don't let it be settled by fining the clinics your neighbors depend on. Vote no.