Calif. Rest. Assn. backs penny sales tax hike for insurance

Nation's Restaurant News,  Sept 3, 2007  

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SACRAMENTO, CALIF. -- As an alternative to the state Legislature's push for a steep health care tax on employers, the board of the California Restaurant Association has voted to back a l-cent increase in sales taxes to fund universal health insurance in the state.

CRA chief executive Jot Condie said the resulting increase in tax revenue of more than $5 billion annually would provide a "sustainable program" and avoid a legislative "deal" that would cut coverage levels, increase medical costs and harm businesses and workers.

Support by the industry's largest state restaurant association for a 2008 ballot measure to authorize such funding marks a strategic shift for the CRA, which in 2003 led opposition to a proposal in the Democratic-dominated Legislature to require all employers to provide medical insurance for employees.

"Because of what is being proposed ]in Sacramento], this action seemed to the board to be a proactive position and a viable solution," CRA spokeswoman Kearsten Shepherd said.

Shepherd could not immediately confirm a report that the association may also be willing to support a small payroll tax to help pay for the extension of coverage to millions of uninsured Californians.

Condie was quoted by Sacramento Bee columnist Daniel Weintraub as saying the CRA may back a minimal payroll tax for that purpose. According to Weintraub, CRA officials "fear what might happen if a Democratic governor succeeds [Arnold] Schwarzenegger in 2010."

Democrats in the statehouse here have been eyeing a proposed 7.5-percent payroll tax on employers that do not provide health insurance. Gov. Schwarzenegger has called for extending coverage through a smaller payroll tax and certain new fees on health services.

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