CALIFORNIA SENATE BILL 2: John Fund writes that it’s a doozy:

Liberal lawmakers, fearing that a Republican might win the governor’s mansion, are scrambling to pass as many bills as Gov. Gray Davis can sign before the recall. One bill would give Indian tribes the power to stop development on private land within five miles of a sacred tribal site; the potential for abusive shakedowns of developers should be obvious to anyone. Another bill would water down legislative term limits. A couple of bills awaiting action smell like such blatant attempts to enrich contributors that Gov. Davis may have to shy away from them.

The worst idea before the Legislature is Senate Bill 2, written by John Burton of San Francisco, the liberal president of the state Senate. It would compel businesses with more than 20 workers to pay almost all health insurance costs for employees–even part-time workers–and their dependents. Companies would have to pay at least 95% of health-care costs for low-income workers, and 80% for everyone else.

Jill Stewart, a columnist and former Los Angeles Times reporter, describes the measure as “closer to socialism than anything I’ve seen heading for approval in 20 years.” This bill would create a powerful incentive businesses to stay below the 20-employee limit by stunting their own growth, or drop below the limit by laying off workers. Ms. Stewart reports the bill was ghostwritten by the Service Employees International Union, a major Democratic contributor.

The real beneficiary of the bill may not be the unions, but rather the Indian tribes. The Western Political Report says the bill was rewritten over the weekend and also includes a whopping cigarette-tax increase to $2.37 a pack, up from 87 cents. California’s new tax would be the highest in the country outside New York City, creating a massive incentive to buy tax-free cigarettes from Indian stores or their Internet sites.

Normally a bill that raises taxes would require a two-thirds vote of both houses of the Legislature, giving minority Republicans leverage in slowing down the legislation. But Democrats plan to make SB 2 “revenue neutral” by adding a tax credit for employers who will suffer from the costs of mandated health care for their employees. Under that arrangement, the bill could pass with a simple majority. Some Republicans promise to take the issue to court, but that fight would take years to resolve.


The California economy is just beginning to crawl out of the mess that Davis either created or exacerbated (depending upon who you talk to). If Davis is dumb enough to sign this bill, it will only ensure that California’s economy really goes into the tank.


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