The SVO Tells Assemblymember Ash Kalra Why SB 562 is Bad for Business

Re: SB 562 (Lara/Atkins): The Healthy California Act

Dear Assemblymember Kalra:

On behalf of The silicon valley organization (The SVO), I am writing to express our opposition of SB 562. This measure creates a new single-payer government-run, multibillion-dollar health care system financed by an unspecified and undeveloped “revenue plan” which will penalize responsible employers and individuals and result in significant new taxes on all Californians and California businesses.

SB 562 would create a new single-payer government bureaucracy which would control and finance the state’s health care system and ultimately result in significant job loss to the state. “The Healthy California Act” would establish a government run health care system, the cost of which the non-partisan Legislative Analyst’s Office previously estimated would exceed 210 billion dollars in its initial year and 250 billion dollars thereafter.

A payroll tax increase, such as the one needed to finance this measure, not only detrimentally impacts businesses already in California but it discourages companies from locating and establishing business here. A large payroll tax would penalize responsible California employers and be a deterrent and disincentive to new employers. Additionally, payroll tax increases would likely lead to job layoffs as existing business and employers would be forced to cut costs to sustain the added new tax burden.

Past focus groups and numerous opinion polls on health care reform have reinforced that California residents do not want a single-payer government run system. California has made significant progress in providing coverage to its residents and while we share concerns in further increasing access to and affordability of healthcare, we do not believe that a government run single-payer health care system will achieve these goals.

For these reasons and others we oppose SB 562.