The state’s largest landlord organization, the California Apartment Association has it’s own measure on the November 5th ballot- Proposition 34. It’s being dubbed the “Revenge Initiative” by opponents – who have sponsored Proposition 33 to remove barriers to rent control laws in the state. Prop 34 would limit how money is spent by certain health care groups — critics point out the criteria is so specific; it targets one organization. The AIDS Healthcare Foundation. KPFA’s Kennedy Cuello reports.
Proposition 34 would require specific health care organizations spend 98% of profits from a federal drug discount program on direct patient care. The NAACP State California/Hawaii State Conference is supporting the measure. Conference President, Rick Callender, says at face value, it would prevent abuse.
“What Prop 34 does is when you look what it really does is three major things. What it does is it makes the medical prescription program permanent in the state tax, it prevents the abuse of federal drug discount programs, and it also prohibits violators of the act from providing healthcare in California for at least 10 years. So Prop 34 is definitely needed to prevent abuses.”
Prop 34 would apply to organizations that spend at least $100 million on expenses other than direct patient care, that also own and operate apartment buildings and that have racked up at least 500 severe health and safety violations in the last decade.
“The only people in the world who it applies to is the AIDS Healthcare Foundation. It doesn’t apply to Kaiser Permanente, it doesn’t apply to Sutter Healthcare, it doesn’t apply to any other healthcare corporation in America it applies to one healthcare corporation.”
Jamie court is president of the public interest group, Consumer Watchdog. He says as Prop 34 is written, it narrowly targets one organization. And that’s because of its political advocacy for rent control.
“This healthcare corporation is a not-for-profit organization, it is ruled by charitable laws. It cannot use its money if it’s not keeping with its charitable mission. Everything that this company does is within its charitable mission, including pursuing rent control.”
The AIDS Healthcare Foundation (A.H.F) is sponsor of another ballot measure, Proposition 33, which would remove barriers to rent control in the state. Susie Sharon, manager of the No on 34 campaign says housing is a part of health care.
“If we’re not advocating for housing, and we’re just leaving people to die on the street, that’s not very helpful for patients of non-profit clinics. 19% of the new HIV AIDS transmissions for those patients, those patients are homeless now… and you can’t help people if they don’t have housing.
Proposition 33 is the A.H.F’s third attempt to remove barriers to rent control, under the Costa Hawkins Act. They first tried in 2018 with Proposition 10, then in 2020 with Prop 21. She says a well-funded campaign backed by corporate landlords defeated their efforts. And now, the state’s largest landlord organization, the California Apartment Association is going after them. According to Sharon, this is not the first time a bill has been proposed against an organization that receives funding through the federal 340B program. Enacted in 1992 340B extends a Medicaid rebate law to all safety net hospitals and clinics. Organizations that participate serve at-risk and low income patients and in return they receive front-end discounts on drugs.
“The last time at the state level that the 340B program was attacked, was by Republican Governor Scott Walker, who also said that this was an abuse of a drug discount program, and what he was doing was going after Planned Parenthood in Wisconsin, was able to take millions of dollars away from them from this bill that he signed and I think that they were able to go to court and have that reversed. What they’re really doing is they’re going after reproductive rights advocacy.”
Although it is not clear how much of their revenue is from 340B, the foundation did make $2 Billion in revenue in 2022. Of the organizations endorsing Prop 34 that KPFA reached out to for comment including the ALS Association and the United Nurses Association of California/Union of Health Care Professionals, only 2 agreed: The NAACP State California/Hawaii State Conference and Howard Jarvis Taxpayer Association. Susan Shelley, the Vice President of Communication at the Association, actually agrees that it does target them for the rent control initiatives.
“Prop 34 is seeking to stop certain nonprofit organizations from earning profits on a federal drug discount program and plowing those profits into something other than direct patient care. So there’s one particular organization that meets the criteria describing who this applies to and that’s the AIDS Healthcare Foundation, which has three times now tried to enact a uh, tried to put an initiative on the ballot, has put an initiative on the ballot and spent a lot of money campaigning to pass it.”
When asked to respond to the claims this proposition is a hit piece, Callender with NAACP said he couldn’t answer that question, and emphasized that their endorsement is with People of Color in mind.
“Oh I can’t respond to that, I can talk about what the NAACP’s position is, and why we took the position, but I see commercials on both sides and I can’t respond to what’s there but I can tell you why the NAACP stands for it is that we got plenty of African Americans, we’ve got plenty of People of Color that rely on medicare that rely on medicaid, and have to basically be able to make sure that we are providing support to them and we’re not driving up healthcare expenses.
According to Cal Matters, $36.4 Million has been raised for Prop 34, with the vast majority of that- $36.1 million coming from the California Apartment Association. Conversely, $15.7 Million has been raised against, with $15.6 coming from the AIDS Healthcare Foundation.