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The Honorable Arnold Schwarzenegger Governor of California State Capitol Sacramento, CA 95814 Dear Governor Schwarzenegger: I respectfully request your VETO on SB 1414 (Migden), which would require companies with over 10,000 employees in California to spend the equivalent of eight percent of their total payroll on health insurance or pay the equivalent amount to Medi-Cal. This legislation does nothing to provide access to healthcare while raising the cost of doing business in California. Similar legislation was ruled invalid under federal law (ERISA). I recognize the rising costs of healthcare as well as the challenge of providing health care to all Californians. This bill does nothing to contain costs or improve the quality of care. Employer mandates do not solve problems but rather threaten jobs and slow economic growth, sending a message that our state is unfriendly to business. A recently released study by the Employment Policies Institute showed that, if passed nationwide, employer-paid mandates would trigger job losses for 315,000 Americans. Any proposal that singles out large employers ignores the fact that all California businesses regardless of size are struggling with the soaring cost of health care. This legislation has been introduced and failed in legislatures across the country. Only in Maryland has this legislation been passed and was subsequently overturned by a federal court ruling. State legislators on both sides of the aisle are taking a close look at these bills and realizing they are more about politics than health care. A U.S. District Judge ruled that the Maryland Fair Share Health Care Fund Act, legislation essentially the same as SB 1414, would have hurt Wal-Mart by requiring it to track and allocate benefits for its employees in a different way from how it keeps track of employee benefits in other states, imposing legally cognizable injury upon Wal-Mart. The judge cited ERISA as pre-empting all state laws that impose health or welfare mandates on employers or relate to employee benefit plans. California should heed the message in this ruling – that employer health plans are governed by federal law and not a patchwork of state and local laws. For these and other reasons, I request your VETO on SB 1414 (Migden) when it comes before you for consideration.