S.F. officials say lawsuit won’t stop health plan 

A lawsuit threatening to kill key funding of The City’s ambitious plan to provide health coverage for the uninsured will not deter officials from their plans to implement the health ordinance later this year as they weigh other options should they not prevail, including putting the ordinance on the ballot.

The Golden Gate Restaurant Association, a nonprofit group representing the interests of restaurant owners, sued The City in November 2006, alleging that The City’s universal health access plan’s employer spending mandate was pre-empted by federal law.

The health care ordinance, which was approved last year by the Board of Supervisors, requires businesses with 20 employees or more to invest $1.06 to $1.60 for each employee hour worked for health care.

The employers are expected to generate up to $40 million a year to help fund The City’s health care program.

Some city officials have discussed alternatives to the employer mandate in case the lawsuit goes against The City, but the co-author of the ordinance, Supervisor Tom Ammiano, said no alternatives are being seriously explored.

"No. Absolutely not," Ammiano said Friday, when asked if other funding options are being looked at. "We are going to trounce them [GGRA]."

City Attorney spokesman Matt Dorsey said, "The law’s expenditure mandate was carefully tailored to minimize the likelihood of a successful legal challenge."

If the City should lose the case, however, Ammiano suggested The City would put the ordinance on the ballot, saying the GGRA could then sue the electorate.

"If we are successful, the employer mandate, which we believe is illegal, will be removed from the health access plan, but we want to find a funding mechanism to allow the program to move forward in full force," said Kevin Westlye, GGRA executive director.

Other city officials have suggested options to fund the health care program in the event The City does not prevail.

Board of Supervisors President Aaron Peskin said last week that hewas going to explore ways to "resolve the lawsuit" and met Wednesday with Westlye.

Westlye said they talked about two possible funding options: a quarter-cent sales tax, which the group proposed before adoption of the ordinance, and possibly doing away with the business payroll tax and implementing a gross receipts tax, of which a portion could be used to fund the health care program.

Peskin said he wants to do away with the payroll tax anyway because he believes it discourages job growth. Peskin said Friday that serious discussions about alternative funding sources would only come should the GGRA prevail.

Peskin reaffirmed that he was against the sales tax increase.

Mayor Gavin Newsom said Thursday that The City is prepared if it loses the lawsuit.

"In a court of law there’s always vulnerabilities. About a month and a half ago, we started putting contingency plans together in light of those uncertainties so we can move forward, so we’re not waiting for this to be adjudicated. We are proceeding with expectations that it can go either way."

The City is expected to roll out the health care program this July.

jsabatini@examiner.com

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