Dialysis firms spend $111M to beat Prop. 8

Union-backed measure would cap clinic profits

Proposition 8 is making history again: A decade after a landmark battle over same-sex marriage bore that number, a much lower profile Prop. 8 is setting records for campaign spending, with opponents putting an astonishing $111.4 million into the fight.

The dialysis industry has inundated voters with ads this fall against 2018’s Prop. 8, a union-backed measure that would cap dialysis clinic profits. It has raised the most by a campaign supporting or opposing a single California ballot measure, according to data from the California Secretary of State and campaign finance experts.

“My guess is that this shows how much money is involved in providing dialysis that the clinics can afford this level of contribution,” said Shaun Bowler, a political science professor at UC Riverside.

Proposition 8 is hardly the leading measure on the ballot this fall, as voters also will weigh in on a hotly debated gas tax repeal and a rent-control expansion. But Prop. 8’s opponents alone are so far raising more than both sides combined in those campaigns.

And the dialysis industry

is rivaling some of the biggest spenders in California history — even gambling interests.

Alec Saslow, a spokesman for Maplight, a Berkeley nonprofit that tracks political campaign spending, said that California Native American tribes spent a little more — $115 million — promoting a series of 2008 initiatives, propositions 94, 95, 96 and 97, that expanded tribal casino gaming in the state. This year, the No on Prop. 8 campaign can still eclipse that.

But Saslow said spending against Prop. 8 this year “is the most raised by one side for one campaign for a single ballot measure.”

By contrast, the health worker unions supporting Prop. 8 have raised $38.3 million as of 5 p.m. Tuesday.

“We’re being dwarfed by the dialysis corporations,” said Sean Worley, spokesman for the Yes on Prop. 8 campaign. “We expected them to drop a huge amount of money. We didn’t know it would be a record amount. We’re optimistic however that voters will see through the ads and mailers. Their priority isn’t patients, it’s shareholders and the return they get.”

Proposition 8 would limit California’s 588 dialysis clinics, which filter blood for about 80,000 people a month who suffer from kidney disease, to profit of no more than 15 percent above service costs. According to the nonpartisan Legislative Analyst’s Office, dialysis clinics currently earn revenues of $3 billion a year but

“would be less profitable or could even be unprofitable” if Prop. 8 passed.

Critics argue the SEIUUHW West labor organization put the initiative on the ballot as leverage in a longrunning effort to unionize dialysis clinic workers.

“Providers are taking Prop. 8 very seriously because it would lead to clinics closing throughout California and jeopardize their patients’ lives,” said Kathy Fairbanks, spokeswoman for the No on Prop. 8 campaign. “Dialysis providers have an obligation to their patients and their employees to defeat this terrible measure.”

Still, this year’s Prop. 8 hasn’t stirred up nearly as much public debate as the 2008 Proposition 8 that legalized same-sex marriage, where opponents raised $47.8 million and supporters $41 million. Even adjusting for inflation, gay marriage foes raised about half the money being spent fighting the dialysis clinic profit cap.

And this year’s big talkers — repealing a gas tax and expanding rent control — aren’t pulling in the kind of big spending that Prop. 8 is. Both sides of Prop. 8 have raised a combined $149.7 million, compared with $103.4 million

raised on both sides of Prop. 10, the rent control expansion, and $55.2 million on Prop. 6, the gas tax repeal. The next largest raised by any side of an initiative this year is $77.5 million opposing Prop. 10.

Jessica A. Levinson, a professor at Loyola Law School in Los Angeles who studies initiative and campaign finance, said that while hot-button social issues can surely drive spending on ballot measures, often the biggest bucks are spent when businesses feel threatened.

“If you see an industry with deep pockets that’s deeply affected, that’s where you see big spending,” Levinson said.

Bowler said that the unions’ involvement with Prop. 8 likely pushed the dialysis clinic operators to spend more, knowing the unions could put a lot of money behind the campaign.

“There does seem to be a subtext here about unionization — and that helps promote a ratcheting up of spending,” he said.

While Prop. 8 has the most spent by one side on a single measure, Proposition 87 in 2006 still holds the record for the most combined spending on a California initiative since 2001

— the year that the secretary of state started keeping records online — with $153.9 million, Saslow said. Opponents spent $94.2 million fighting the unsuccessful measure to tax oil to support alternative energy, while supporters spent $59.7 million.

The next highest amount raised by one side on an initiative campaign was $109.1 million by opponents to Prop. 61 in 2016, an unsuccessful measure to regulate drug prices. Supporters spent $19.2 million.

Levinson said that California’s permissive laws regarding ballot initiatives, which unlike many states can alter the state constitution and affect budgeting, combined with the size and population of the state, make for a lot of groundbreaking initiatives and expensive campaigns.

But total initiative spending isn’t necessarily rising, Levinson said. This year’s combined initiative spending of $396.6 million is less than the combined $447.7 million spent on statewide ballot measures in November 2016, according to the secretary of state.

“I don’t see a trend line in chronology,” Levinson said, “but in the substance of the initiative.”