CRA Responds to Governor Arnold Schwarzenegger’s Health Care Plan

Sacramento, Calif. –The California Restaurant Association made the following statements regarding the Governor’s health care plan announced today:
 
“The Governor’s proposal disproportionately impacts small businesses. Our industry is labor-intensive, has high costs and low profit margins. Placing a payroll tax on small employers who cannot afford to offer health care will result in restaurateurs making difficult choices, like cutting jobs, in order to remain competitive or keep their doors open,” said Jot Condie, President and CEO of the California Restaurant Association. “The Governor needs to more clearly address how he’s going to drive down costs before introducing proposals that throw money at our “broken” health care system, especially on top of his recently signed 18.5 percent minimum wage increase. This is one last straw that may break the backs of employers.”
 
“It’s not about good employers and bad employers,” said Ted Burke, owner of Shadowbrook Restaurant in Capitola. “It’s about employers that can afford to provide health care and those who can’t afford it.” Burke participated in the Governor’s health care roundtable on December 20.
 
“A payroll tax cuts into my already very narrow profit margin,” said Michael Osborn, owner of Pie ‘N Burger International in Pasadena and also a participant in the Governor’s Dec. 20 roundtable. “You can only raise prices so much, and with minimum wage going up $1.25 over the next two years and gas prices rising, providing health care for my employees is just something I cannot afford to do until costs come down significantly.”
 
The CRA defeated the employer health care mandate, Proposition 72, in the November 2004 election. Since then, the CRA has been committed to be a part of the right solution to the growing problem of uninsured Californians and has met with a number of stakeholders that are critical players in solving this problem.