CHAMBER OF COMMERCE WANTS TO REPEAL MANDATE

San Jose Mercury News

Making good on its earlier threats, the California Chamber of Commerce took the first steps toward putting a referendum on next year’s ballot to overturn sweeping health care legislation signed Sunday by Gov. Gray Davis.

The influential business group filed paperwork with the state attorney general this week to overturn the new legislation, SB 2, which would require employers of more than 50 workers to offer health insurance to workers and pay most of its costs. The law would begin to take effect in 2006.

If the chamber of commerce can gather about 373,000 signatures within 90 days, it could place the referendum on the November 2004 election ballot. California voters could decide whether to overturn the legislation, approved this year.

The state chamber has not definitely decided to pursue the referendum and may instead push legal challenges to the law, said Richard Costigan, vice-president of government relations. The new law is likely to face such challenges on a number of fronts, insurance experts say.

Supporters of the new law — sponsored by Sen. John Burton, D-San Francisco, and passed Sept. 12 — contend it will provide much-needed health insurance for more than 1 million working Californians. But the chamber and other business groups have bitterly opposed it, with the chamber estimating its cost to state’s businesses at $5.7 billion.

“We think it’s the wrong medicine for California’s economy right now,” said Jim Cunneen, CEO of the Silicon Valley Chamber of Commerce. “In terms of attracting investment and jobs, we’re differentiating ourselves in all the wrong ways. We must put a stop to these costly mandates.”

Gov.-elect Arnold Schwarzenegger has said he is “absolutely” opposed to the new law. “We have to bring the economy back,” he said Friday. “The only way we can do that is by not loading up on businesses, more regulations, more rules.”

But he has not revealed how active a role he will play in trying to overturn the law, saying only that answers would come after he takes office.

Jerry Flanagan, a consumer advocate with the Foundation for Taxpayer and Consumer Rights, called on the chamber “to stop fighting a bill” that Californians want and need.

“We empathize with businesses who are paying for overpriced health care,” Flanagan said Friday. “The solution is not to kill the law, but to retain it and work to make health care affordable through cost controls.”