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Schwarzenegger vetoes California benefit mandate


SACRAMENTO, Calif.--California Gov. Arnold Schwarzenegger has vetoed legislation that would have required big employers to spend a certain amount of money on health insurance benefits.

The vetoed bill, S.B. 1414, mandated that employers with 10,000 or more employees in the state spend an amount equal to at least 8% of payroll on health benefits or pay the difference into a state fund providing coverage to the uninsured.

In his Wednesday veto message, Gov. Schwarzenegger said the bill would do nothing to lower costs or expand coverage.

"Singling out large employers and requiring them to spend an arbitrary amount on health care does nothing to lower costs or guarantee that even one more person has health care coverage," he said.

Gov. Schwarzenegger also noted that the measure, if enacted, would have led to expensive legal challenges. A federal judge in July ruled that a Maryland law, very similar to the California measure, ran afoul of the Employee Retirement Income Security Act, which pre-empts state and local rules and laws that relate to employee benefit plans.

Gov. Schwarzenegger's veto came on the same day the Chicago City Council failed to override Mayor Richard M. Daley's veto of legislation that would have required so-called "big box" retailers--those businesses located in the city with annual revenues of at least $1 billion and at least 90,000 square feet of retail space in a single location--to provide a minimum level of wages and benefits.