LA passes Measure ER and Proposition 44 heads to the November ballot

Measure ER passed and LA must now put a $1 billion backfill in place

Los Angeles County's Measure ER — a half-cent sales tax expected to raise roughly $1 billion a year, with a large clinic and safety-net allocation — passed after a very close count. NBC Los Angeles reported on June 10 that the sales-tax increase was approved and takes effect October 1, 2026.

The honest summary for an FQHC board is now different from June 7: stop spending energy on pass/fail and move to implementation. The next work is bridge financing, county allocation rules, reporting, and documentation of uninsured-care exposure before dollars begin flowing.

The stakes have not gone away. Passage gives LA-area FQHCs a local cushion that other counties do not have, but it does not solve federal Medicaid work requirements, the December 2026 federal cliff, or the still-developing California budget implementation around State-Only/UIS clinic payments.

That makes Measure ER a win, not a rescue. The centers that use the summer to document need and build implementation plans will be better positioned when the tax takes effect October 1.

Contra Costa voted no

While LA ultimately passed Measure ER, the Bay Area gave a different answer. Contra Costa County's Measure B — a 0.625-cent general sales tax projected to raise about $150 million a year for five years, placed on the ballot explicitly to offset federal Medicaid cuts — failed. The certified results show about 43% yes to 57% no, a loss of more than 41,000 votes.

The county had warned that about 93,000 residents could lose coverage by 2029 and that Contra Costa Health — a county system that runs the public hospital, its clinics, and a roughly 270,000-member health plan — faces more than $300 million in losses over five years. With Measure B defeated, there is no local backstop in a major Bay Area county as clinics plan for federal cuts and the likely 2027 State-Only/UIS payment horizon. Independent East Bay FQHCs (LifeLong Medical Care, La Clínica de la Raza, Brighter Beginnings) will absorb displaced patients while competing for the same shrinking Medi-Cal dollars.

Step back and the pattern is the real story. California's 'tax ourselves to backfill federal Medicaid cuts' strategy now has two clear wins in large safety-net counties (Santa Clara and Los Angeles) and one major defeat (Contra Costa). Timing, turnout, campaign quality, and local trust all matter.

The lesson the rest of the state is reading: a backfill tax is far easier to pass in a high-turnout November general election than in a low-turnout June primary, and an organized 'no' campaign in an anti-tax climate is hard to beat. Counties weighing their own measures will likely aim for November 2026 or 2028 ballots — which means the local-funding response to the federal cuts is slower than the cliffs.

The governor's race

With Gavin Newsom termed out, former U.S. HHS Secretary and California Attorney General Xavier Becerra finished first in the June 2 top-two primary (around 27%) and advances to the November 3 general election. The second spot was still being decided between Republican Steve Hilton (around 26%) and Democrat Tom Steyer (around 22%) as millions of ballots remained uncounted, with certification due around July 10.

For FQHCs, Becerra is about as Medicaid-literate as a candidate gets: he ran the federal department that oversees CMS and HRSA and litigated California's coverage fights as Attorney General. He has stepped back from single-payer in favor of 'immediate wins,' pledged a day-one executive order to maintain coverage continuity for Californians hit by federal cuts, and emphasized fully implementing Proposition 35 to lock MCO-tax revenue into Medi-Cal.

The fair critique: he has not specified how to fund a roughly $30 billion-a-year federal funding gap. Rob Bonta also advanced for Attorney General (around 55%), signaling continuity in the state's legal defense of Medi-Cal and 340B.

The caveat that matters most for planning: the next governor is not sworn in until January 2027. So the December 31, 2026 'triple cliff' — the Community Health Center Fund, the CalAIM 1115 waiver, and the MCO tax all expiring — and the June 15 budget both land on the current administration's watch, not the winner's.

The primary signals continuity over disruption on health policy. It does not deliver near-term relief. Do not let a friendlier-looking 2027 distract from a 2026 problem.

What is on the November ballot

The most direct election threat to FQHC finances is Proposition 44, the 90% clinic-spending rule on the November 3, 2026 ballot. The California Secretary of State's voter guide titles it "Requires Community Health Clinics Spend 90% of Revenue on Program Services." The June 25 withdrawal deadline changed the rest of the landscape: CalMatters reports hospitals and SEIU-UHW agreed to pull the rival executive-pay cap and union-spending counter-measure.

• The FQHC-direct measure: Proposition 44, sponsored by SEIU-UHW (initiative #25-0008), would penalize nonprofit FQHCs that spend less than 90% of their revenue on program services. The state's fiscal summary estimates added state costs in the low tens of millions of dollars a year, covered by fees. CPCA opposes it and says it would take nearly $2 billion from clinics and force closures. CPCA and Open Door Community Health Centers sued in federal court in April to keep it off the ballot, and it is on the ballot. On September 18, CPCA and five clinics filed a separate racketeering suit against SEIU-UHW and its president, Dave Regan, as the Los Angeles Times reported. This is the one to watch.
• The measures pulled by the June 25 deal: SEIU-UHW's $450,000 health-executive pay cap (#25-0009 / Measure 1985) and the California Hospital Association's union-spending counter-measure (#25-0021) were withdrawn under the hospital/union agreement reported by CalMatters. Neither is on the November ballot.
• The broader health-funding fight: Proposition 40, listed earlier as Measure 2001, is a one-time tax on taxpayers with assets over $1 billion. The voter guide says its revenue is primarily for health care. SEIU-UHW supports it and CPCA opposes it. It is a separate fight from the FQHC 90% spending rule, so track it on its own.

The planning implication is sharper now than it was on June 7. Do not spend board time modeling the withdrawn hospital/union fight as if it still sits beside the clinic measure. Spend it on what Proposition 44 would do to clinic finances, the federal lawsuits, and the separate politics of Proposition 40's health-funding tax.

Also keep checking the Secretary of State list. Ballot status can change through withdrawal, litigation, court orders, and title and numbering updates. Cite the current Secretary of State voter guide in your board packet. Measure 1986 is now Proposition 44, and older campaign trackers still use the old number.

What FQHC leaders can do

• Turn the Measure ER pass plan into an implementation plan. If you are an LA-area FQHC, document uninsured-care exposure, identify the bridge period before dollars flow, and get clear on county allocation/reporting requirements before October 1.
• Track Proposition 44 in the Secretary of State's voter guide and in the CPCA lawsuits. The 90% measure (#25-0008) is the live FQHC-finance threat. The pulled hospital/union measures are background for that fight.
• Don't bank on the next governor. The Dec 31 triple cliff and the June 15 budget fight are this administration's. Plan your FY2026-27 around the cliffs as they are, not around a 2027 that arrives too late.
• Read the county-tax signal honestly. Santa Clara and LA show local backfills can pass; Contra Costa shows they are not automatic. If your county is weighing one, campaign timing and trust matter as much as the policy design.
• Model the stack, not the single item. Layer Measure ER (if you're in LA), the developing California budget implementation, the MCO-tax outcome, and the Jan 2027 work requirements together. The right question is how much revenue is exposed across 2026-27, not what any one event costs.