A hospital association just pumped $12.5 million into an effort to extend a tax on top earners — a tax that’s provided billions of dollars in education funding since 2012.

In fact, the California Association of Hospitals and Health Systems quadrupled its investment from four years ago when Prop. 30 passed. So why do hospitals care so much about education funding?

Because there’s billions of dollars per year in health care funding at stake.

Health care funding

Since Prop. 30 passed — during an economic downturn when the state was confronted with sharp budget cuts — it has largely funded education with some money bolstering the general fund, which includes some health care programs.

But the 12-year extension vying for a spot on the November ballot — two years prior to the expiration date — would add up to $2 billion in funding per year for Medi-Cal, the state’s Medicaid program. The contributions to Medi-Cal would come once other funding requirements have been met (the Prop. 2 rainy-day fund requirement and the Prop. 98 minimum education funding requirement).

Prop. 30

Prop. 30 imposed a “temporary,” seven-year personal income tax increase on earnings of more than $250,000, and a quarter cent sales tax increase for four years.

Some of the revenue went to help balance the state budget, but most went to education funding — 89 percent to K-12 and 11 percent to community colleges.

The extension

The proposed extension allows the quarter cent sales tax to expire, but extends the income tax increase until 2030, securing funding far enough into the future “to provide long-term stability for our schools,” said Jennifer Wonnacott, spokeswoman for the “Yes” campaign.

“We still need this investment,” said Wonnacott. “This is about asking those who can afford to pay a little bit more to keep doing so for a little while longer.”

Big money

With the heavy early investment from the California Association of Hospitals and Health Systems — which only spent $2 million to help Prop. 30 pass in 2012 — this is shaping up to be one of the costliest battles this cycle.

Prop. 30 was a $135 million issue, one largely supported by the California Teachers Association ($11.4 million), Service Employees International Union ($10.7 million), Democratic State Central Committee of California ($5 million) and the American Federation of Teachers ($4.1 million).

In total, proponents spent $65.6 million to pass the measure. It has generated $13.1 billion in education funding since its passage, according to the state controller’s office.

The extension measure is again supported by the California Teachers Association and Service Employees International Union, which — along with the hospitals — forms a formidable alliance. The California Teachers Association and Service Employees International Union has already given $1.2 million on the effort.

While it won’t take a formal position unless the measure qualifies for the ballot, the Howard Jarvis Taxpayers Association will make this a top target if it does qualify — the measure has reached the 25 percent mark for required signatures as of Sunday.

Many political donors will also fight this measure. In 2012, Charles Munger Jr. contributed $35 million to the “No on 30” campaign in opposition to Prop. 30, according to Ballotpedia.

Timing

Instead of waiting until the next cycle when the Prop. 30 income tax provision expires, proponents are banking on a favorable turnout, as Democrats vote in larger percentages in presidential cycles than they do in midterms.

There had been competing Prop 30 extension proposals, but the efforts consolidated around this measure, said Wonnacott.

The sample accounting projects 589,439 voters would like to see the bag law put to a vote, according to an analysis of the early sample by CalWatchdog.com.

Counties can provide early random samples of signature validations before the due date of Feb. 25. Several counties, including Los Angeles, Contra Costa and Fresno, have not yet competed their samples.

The plastic bag industry submitted petitions with 809,000 signatures in December, more than the required 505,000 needed to force a referendum in Nov. 2016.

The law was signed by Gov. Jerry Brown in Sept. 2014. If it goes into effect, larger stores would no longer be able to use the bags beginning this summer. The ban would begin for smaller volume stores in July 2016. 

If if the repeal initiative officially makes it onto the Nov. 2016 ballot, its qualification would delay the bag ban’s summer 2015 implementation until voters decided whether to keep the ban, or throw it out.

Records show advocates for the proposed referendum to overturn the ban have $3.2 million. A large number, $1.7 million, came from Hilex Poly, a South Carolina-based plastics firm, according to its latest campaign finance filing. The company was recently absorbed by NOVOLEX.

Hilex Poly donated a total of $1.8 million last year in California. The expenditure also included $40,000 to the Democratic State Central Committee of California, which has received Hilex money in the past.

Donors

Financing for the effort to overturn the legislation has come primarily from out-of-state donors like Hilex. Of the $3.2 million raised from nine donors, two are from California: Tustin-based Durabag gave $50,000 and Crown Poly in Huntington Park gave $12,000.

Additionally, the American Progressive Bag Alliance, a lobbying group for the plastics industry, continues to take in cash from large plastics companies. That cash infusion includes $680,000 from three Texas-based manufacturers in December alone.

“It’s expensive to fight, but California is important,” said Jon Berrier, a spokesman for the American Progressive Bag Alliance. “It’s one of those states where a policy is adopted and other states will look to it and see if it is something they want to do.”

Berrier said plastic bag manufacturing represents 2,000 jobs in California and 30,000 jobs nationally.

The major foe of the referendum is a conglomerate of environmental and grocery groups led by Californians Against Waste, which has formed a 501(c)(4) group, Protect the Plastic Ban, which reported $19,000 in donations in its first filing on Monday.

PPB’s largest donation so far is $2,500 from Chicobag, a Chico-based maker of reusable bags.

Groups

Another group launched Monday, California vs. Big Plastic, was funded with $9,000 from Californians Against Waste.

“We fully expect this to go to a vote, based on the signatures that were submitted and the numbers we are hearing,” said Mark Murray, executive director of Californians Against Waste.

Murray expects to need $10 million even to stay competitive with what he projects will be $40 million raised by repeal supporters.

“We will be relying on big environmental donors,” Murray said.

The referendum shapes up as a contest between two titans of respective industries – environmentalism and plastics – and all the formidable money and politicking each is capable of.

The law is the first statewide ban on plastic bags in the U.S., although 150 municipalities in the state have imposed their own prohibitions.

Other towns, cities and counties around the U.S. have passed bans, including Austin, Tex.; Chicago, Ill.; Washington, D.C.; and Montgomery County, Md.

The majority of the bans were put into place by a vote of elected officials, rather than a popular vote. Challenges such as the one in California have had mixed results.

Challenges

Voters in Issaquah, Wash., rejected a challenge to a city-approved bag ban in Feb. 2014, one of the few places the ban has been put on a ballot.

City councils in Homer, Alaska, and Basalt, Colo., enacted plastic bag bans in 2012, which voters turned back in both cities.

Voters in Durango, Colo., also voted down an ordinance approved by the city council that required grocers to charge 10 cents for a plastic bag in 2013.

California, though, has seen relatively clear sailing on municipally imposed bag policies. Most of the bans in place in the state cover grocery stores. But some also extend to drug stores and restaurants. Many require or allow a 10 cent charge for paper bags.

A ban on plastic in Los Angeles County was met with legal action from agents of the plastics industry. Four residents and Hilex Poly sued the county, claiming a bag ban requiring merchants to charge for a paper bag amounted to an illegal special tax because it was not approved by voters as required by state law. They lost the case.

The city of Huntington Beach banned plastic bags in 2012. But a new city council is working to repeal that ban.

The city of Carpinteria was forced to pay attorney’s fees in a case filed by pro-plastic bag activist Stephen Joseph, a Los Angeles lawyer, who sued the city for including restaurants in its plastic ban. He claimed state health and safety codes trump a municipality’s ability to regulate businesses. He was awarded $11,500 in fees and the city rescinded the restaurant requirement.

Joseph, dubbed in a Time magazine headline as “the Patron Saint of Plastic Bags,” has sued several other cities over bag bans.

He declined to speak about the statewide bag ban.