Your guide to Proposition 44: Federally funded health clinic spending

Proposition 44 asks voters to require federally funded community health centers to spend at least 90% of their total annual revenue on “program services advancing their charitable purpose.”

California

Voter guide to the 2026 California general election

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Oct. 1, 2026

It applies to federally qualified health centers, community clinics that deliver primary care to underserved populations. There are about 2,000 such safety-net clinics in California, run by either private nonprofits (in most cases) or public entities like counties, according to the Legislative Analyst’s Office.

Proposition 44 would require these clinics spend at least 90% of their total annual revenue on patient care. If spending on administrative or non-healthcare functions exceeded 10% of total revenue, a clinic would have to pay a penalty equal to the amount it overspent. Some of this money could be earned back if clinics come into compliance. There would be criminal penalties for knowingly misreporting or misclassifying expenses to get around the limits.

The text of the measure specifies only that 90% of revenue must be used for “program services advancing their charitable purpose” and does not spell out which expenditures would qualify as program-related and which would not. The task of determining which expenses fall on what side of the ledger would belong to the state attorney general.

The state Department of Public Health would be permitted to temporarily waive a clinic’s spending requirements in exceptional circumstances.

Fundraising data will be updated regularly until the election.

The measure is sponsored by the Service Employees International Union-United Healthcare Workers West, which represents workers in the healthcare industry. SEIU-UHW West is the primary backer of Californians for Responsible Healthcare and the Yes on 44 campaign.

Supporters say the measure would prevent excessive spending on executive salaries, fundraisers and other administrative expenses at clinics serving the state’s most vulnerable residents.

Organizations publicly opposing Proposition 44 include the California Medical Assn., the California Hospital Assn., which represents hospitals and health systems, the Assn. of California Healthcare Districts, which represents the state’s 76 public healthcare districts, the California Teachers Assn., the state’s Planned Parenthood affiliate, the state Democratic Party, the state Chamber of Commerce and Reform California, a conservative advocacy group.

Opponents say the proposition’s vague wording could result in vital services being excluded from the list of program expenses permitted in the 90% of revenues, prompting clinics to cut programs to avoid financial penalties. A study commissioned by the California Primary Care Assn. found that clinics could face up to $1.7 billion in collective penalties in the first year of the measure’s implementation alone, an additional expense that could leave up to 88% of clinics operating in the red.

Opponents also say the measure adds an expensive layer of bureaucracy to the state’s budget and grants elected officials — in this case, the attorney general — authority to determine which services clinics can offer.

If the proposition passes, enforcement will cost the state “in the low tens of millions of dollars” annually, according to the Legislative Analyst’s Office. The measure requires clinics to pay annual fees to cover enforcement costs. The proposition also could incur additional costs for state and local governments depending on the attorney general’s interpretation of what constitutes program expenses.

Proposition 44 is one of two measures put forth by SEIU-UHW this election cycle, along with Proposition 40, better known as the billionaire tax.

Supporters say the measures will shore up California’s healthcare funding in the face of federal cuts. Opponents say they ultimately will cost far more than they add to state coffers and are on the ballot as a result of SEIU-UHW’s oft-repeated strategy of using ballot measures as a negotiating tactic.