Requires Community Health Clinics Spend 90% Of Revenue on Program Services. Initiative Statute.

“Clinics that meet the standard keep every dollar, and even clinics that fall short can recover any penalties by coming into compliance.”

Seen in: Official Voter Information Guide, argument in favor of Proposition 44

The Analyst says clinics that fall short pay a penalty equal to the spending needed to reach the 90 percent minimum, and that clinics get their money back only if they comply within five years; otherwise the state keeps it for clinic workforce programs. The Analyst also says the state would cover its enforcement costs, in the low tens of millions of dollars a year, by charging fees on the affected clinics, so clinics that meet the standard would still pay fees.

“Cut $1.7 billion from health clinics in the first year alone.”

Seen in: Official Voter Information Guide, argument against Proposition 44

A Berkeley Research Group report (November 2025), using data supplied by the California Primary Care Association, estimates about $1.7 billion in penalties by the clinic organizations studied in the first year. The Analyst says the affected clinics currently report spending an average of about 80 percent of revenue on health care services, that the penalty equals the spending needed to reach the 90 percent minimum, and that clinics get the money back if they comply within five years. So the $1.7 billion is a payment to the state that can be recovered, not a loss of funding.

“It requires community health clinics to spend at least 90% of their revenue on their non-profit mission”

Seen in: Official Voter Information Guide, argument in favor of Proposition 44

The Analyst says Proposition 44 requires private nonprofit safety net clinics to spend at least 90 percent of their total revenue each year on providing health care services, and the Attorney General's summary refers to spending on "program services" advancing the clinic's charitable purpose. It applies to private nonprofit safety net clinics (Federally Qualified Health Centers), not every community clinic.

“Cause 88% of all clinics in the state to operate at a loss.”

Seen in: Official Voter Information Guide, argument against Proposition 44

The Berkeley Research Group report says 88 percent, or 161 of 183, of the clinic organizations that would fall below the 90 percent ratio would operate at a loss after paying the penalties. Of the 202 organizations studied, 161 is about 80 percent, and the organizations studied are not all clinics in the state. The report assumes the penalties are paid; the Analyst says the penalty equals the spending shortfall and can be recovered within five years.