Voters to Consider Prop. 3 to Rebuild Children's Hospitals

State voters will be asked on Nov. 4 to consider Proposition 3, which, if approved, would help children’s hospitals expand and renovate to treat more children, acquire essential medical equipment, and make seismic repairs for safety. Passage of Proposition 3 would allow the state to sell general obligation bonds to finance facility improvements at California's children's hospitals. Bond financing is a type of long-term borrowing that the state uses to raise money for capital improvements. The state obtains this money by selling bonds to investors. In exchange, the state agrees to repay this money, with interest, according to a specified schedule -- usually over a long period of time. Once sold, general obligation bonds are backed by the "full faith and credit" of the state, which means California is obligated to repay the bonds from taxpayers' contributions to the state's general fund. The UC Regents are among those endorsing the passage of Proposition 3, the Children’s Hospital Bond Act of 2008, which allocates 20 percent of the proceeds, or $196 million, to the University’s five medical centers. UCSF, like the other UC medical centers, would receive $39.2 million over 10 years for its children’s hospital. Opponents of Proposition 3 maintain that California is already deeply in debt, and the state's ability to pay off further debt created by issuing bonds is questionable. These opponents include Lewis K. Uhler, president of the National Tax Limitation Committee, Ted Costa, president of People's Advocate and Jon Fleischman, publisher of Flashreport.org. Opponents question the wisdom of providing more services for children through long-term debt financing and point out that children and grandchildren are the future taxpayers who will ultimately be responsible for paying off the state's debt. The opponents of Proposition 3 state: "If you really want to help them, don’t saddle them with more debt of this kind." They conclude their argument against the measure in the official California voter guide by saying, "...adding bonded indebtedness for anything but the most essential infrastructure is unwise to the point of absurdity." Mark Laret, chief executive officer of UCSF Medical Center, is among those in the UCSF community who are supporting the measure, along with a long list of other children’s advocates, medical associations and citizens groups. “In California, the financial burdens on children’s hospitals are mounting,” Laret says. “Population growth points to a need for five new children’s hospitals; construction costs have nearly doubled over the last seven years; and experts predict a rise in the acuity level of pediatric inpatients that requires more expensive intensive care units and specialized equipment. The $39 million that we would receive from approval of Proposition 3 is an integral part of our financing needed to construct a new UCSF Children’s Hospital at Mission Bay.” Passage of Proposition 3 would fund working plans and drawings to construct a new, 183-bed UCSF Children’s Hospital at Mission Bay, part of an integrated medical center complex that will include women’s and cancer hospitals. The children’s hospital at Mission Bay will offer pediatric emergency and urgent care, pediatric primary care and pediatric outpatient specialty services. UCSF is looking to multiple funding sources to pay for construction of the $1.686 billion, integrated medical center for children, women and cancer patients at Mission Bay. The University is currently in the midst of conducting a capital campaign for the project. So far, this fundraising effort has been successful in garnering more than $200 million in donor pledges for the project. Funds from Proposition 3 would be combined with UCSF’s share of about $30 million from a similar bond measure, which was approved by voters in 2004.