Marshall had a state funding option. The paper trail deserves scrutiny.
PLACERVILLE — Before El Dorado County voters decide whether to impose a new countywide sales tax for emergency preparedness, wildfire prevention and hospital improvements, there is a question that deserves an answer from both Marshall Medical Center and state officials:
What happened to the state funding that was already available for Marshall’s seismic compliance?
The question is not whether California has imposed expensive seismic requirements on hospitals.
It has.
The question is not whether Marshall faces significant costs.
It does.
And it is no longer accurate to say Marshall had no state funding avenue because the hospital is too large to qualify for California’s Small and Rural Hospital Relief Program.
State records show otherwise.
The California Department of Health Care Access and Information, or HCAI, administers the Small and Rural Hospital Relief Program, known as SRHRP. The program was created by Senate Bill 395 in 2021 and began accepting applications in 2023 specifically to provide grants for seismic compliance projects at eligible small, rural and critical-access hospitals.
And HCAI’s current eligibility list specifically includes:
10112 — Marshall Medical Center — El Dorado County.
Marshall is identified as qualifying under both the Medical Service Study Area rural designation and the Health and Safety Code’s rural-hospital designation.
It is not classified as eligible because it has fewer than 50 beds.
That distinction matters.
The 50-bed argument does not apply to Marshall
The SRHRP eligibility rules establish three separate categories.
A hospital can qualify because it:
- Has fewer than 50 licensed general acute-care beds;
- Is designated as rural or frontier; or
- Is a federally designated critical-access hospital.
HCAI’s current records show Marshall in the rural category even though it is not listed as a small hospital under the 50-bed test.
That means the earlier argument that Marshall’s approximately 100-plus-bed size automatically excluded it from the program is incorrect.
Marshall was eligible because it is rural.
The state itself says so.
California created the program before Measure S
The timing is important.
SB 395 was approved in October 2021. The legislation created the Small and Rural Hospital Relief Program and directed a portion of California’s electronic-cigarette excise tax revenues to the program.
The state’s Grants Portal subsequently opened the SRHRP opportunity in January 2023.
Its stated purpose was explicit:
Provide grants for seismic compliance projects.
The program was designed for hospitals with limited resources facing the cost of seismic retrofits and related requirements.
In other words, this was not a program created after Measure S.
It was already on the books.
It was already accepting applications.
And Marshall was already on the state’s eligibility list.
State officials described the program as seismic relief
The distinction is not based on campaign rhetoric.
In March 2025 testimony before a California legislative health budget subcommittee, HCAI Director Elizabeth Landsberg described the program as one that provides grants to small, rural and critical-access hospitals to help them meet seismic-safety requirements.
The program, she explained, was created through SB 395 and funded partly through the electronic-cigarette excise tax, with an additional $50 million one-time appropriation from the state’s managed-care organization tax.
That matters because it establishes what the program was actually intended to do.
It was not general hospital operating assistance.
It was not a wildfire program.
It was not a local-government grant.
It was specifically designed to help qualifying hospitals with seismic safety compliance.
So did Marshall apply?
There is evidence that it did.
A presentation prepared for the California Society for Healthcare Engineering’s 2025 annual institute listed a Marshall Medical Center application of approximately $650,000 as “in process.” The presentation listed several other hospitals with applications in process and separately identified hospitals whose grants had already been awarded.
That is an important piece of the puzzle.
It suggests Marshall was not merely eligible for the program in theory.
Marshall appears to have pursued state seismic assistance.
But there is a second question.
Was the $650,000 ever awarded?
That answer is less clear.
HCAI’s current SRHRP webpage says 29 grants totaling $17.2 million have been awarded and identifies the recipients publicly. Marshall is not among the recipients named on that page. The same page says another nine applications totaling $6 million are under review and that approximately $46 million is currently available.
The public information therefore establishes three things:
Marshall was eligible.
A roughly $650,000 application was identified as in process in 2025.
Marshall is not identified among the 29 awards currently listed by HCAI.
What the public record does not establish is why.
Was the application denied?
Was it withdrawn?
Was it still pending?
Was the project modified?
Did Marshall receive another state allocation that is not reflected in the publicly summarized award list?
Those are questions that should be answered directly by Marshall Medical Center and HCAI.
The state program is not a $40 million solution
There is an important counterargument.
Even if Marshall was eligible for state seismic assistance, the SRHRP was never designed to finance a hospital’s entire capital program.
HCAI says current funding is driven by electronic-cigarette excise-tax collections, with current projections of approximately $2 million to $3 million annually available for distribution. The agency says grants may cover initial seismic evaluations, design planning and construction necessary for seismic compliance.
The program also received a one-time $50 million MCO-tax appropriation in addition to its ongoing funding stream.
That is significant money.
But it is nowhere near enough to solve California’s entire hospital seismic problem.
And it is nowhere near the capital investment contemplated by Measure S.
That distinction is critical.
The existence of state funding does not mean the state has funded Marshall’s entire seismic obligation.
But neither does the existence of an unfunded balance mean that no state funding was available.
Marshall says it has already spent more than $70 million
The Measure S campaign itself acknowledges that Marshall has already spent substantial sums addressing the state’s seismic requirements.
Its campaign FAQ says Marshall has spent more than $70 million meeting the state mandate and achieved the 2020 “safe and standing” requirement.
The campaign says the remaining work involves additional structural requirements associated with the 2030 deadline, including the ability to maintain operations for at least three days following a major seismic event.
That is an important part of the story.
It means the debate should not be framed as:
Marshall did nothing until Measure S came along.
The available evidence does not support that.
Nor should it be framed as:
California offered Marshall enough money to solve the problem.
The available evidence does not support that, either.
The more accurate picture is somewhere in between.
Then came Measure S
Measure S — formally the El Dorado County Emergency Preparedness, Healthcare Access and Wildfire Prevention Initiative — would impose a 3/8% transactions-and-use tax for 30 years.
The county’s official election materials say it would generate approximately $13 million annually.
The initiative’s own language divides the revenue among three broad purposes.
In the first full fiscal year:
- 50% would go to eligible local hospitals.
- 45% would go to fire departments and agencies.
- 5% would go to qualifying nonprofit wildfire-prevention organizations.
The initiative defines an eligible local hospital as a general acute-care hospital in El Dorado County that, as of Jan. 1, 2025, was licensed for at least 100 general acute-care beds.
That definition is significant.
It is not a broad grant program open to every medical provider in the county.
It establishes a specific eligibility threshold.
Measure S would create a much larger local funding stream
The initiative goes beyond a simple annual appropriation.
After the first full fiscal year, hospital funds would be used to support debt service on bonds or other debt obligations incurred for qualifying capital projects.
The measure permits an eligible hospital to pledge its Measure S allocation to a bond trustee.
The initiative limits the aggregate hospital capital projects financed through that mechanism to $125 million over the 30-year life of the measure.
The campaign describes this as supporting a $125 million bond issuance for Marshall capital improvements.
That is a substantially different financial mechanism from a state grant.
A state grant is competitive and limited by the state’s available appropriation.
Measure S would create a dedicated local revenue stream for the hospital.
There is another state option voters should know about
The state has also changed the seismic compliance landscape since Measure S was first discussed.
Assembly Bill 869, signed in 2024, created a pathway for certain qualifying hospitals — including small and rural hospitals — to seek delays beyond the Jan. 1, 2030, seismic deadline.
Under the law, qualifying hospitals can seek a delay of up to three years, with HCAI able to authorize an additional two years under specified circumstances.
HCAI’s current seismic guidance confirms that eligible hospitals may apply for an AB 869 delay and that hospitals seeking compliance dates beyond Jan. 1, 2030, must obtain the appropriate extension.
That is another important distinction.
California has offered both financial assistance and, under specified circumstances, additional regulatory time.
Neither necessarily eliminates Marshall’s capital requirements.
But both belong in the public discussion before voters are asked to approve a new countywide tax.
Measure S is sponsored by Marshall Medical Center
There is also an issue of transparency that voters should understand.
The Measure S campaign identifies Marshall Medical Center as its top funder and sponsor.
That does not invalidate the hospital’s argument.
Marshall has a legitimate interest in remaining open and meeting California’s safety requirements.
But it does mean voters should examine the hospital funding component of Measure S with the same scrutiny applied to any other tax proposal.
The question is not whether Marshall benefits.
The measure’s own language makes clear that eligible hospitals would receive half of the revenue in the first full fiscal year, followed by hospital debt-service payments under the capital-financing structure.
The question is whether the proposed tax is necessary, proportionate and the best available mechanism for solving the problem.
The unanswered questions
That brings the issue back to the original question:
Marshall had a state funding option. What happened?
Before El Dorado County voters approve another tax, several questions deserve documented answers.
How much did Marshall request from SRHRP?
When was the application submitted?
Was the approximately $650,000 application approved, denied or withdrawn?
If approved, how much was actually paid to Marshall?
What specific seismic work was proposed with that money?
How much has Marshall spent from its own resources on seismic compliance?
How much remains to be spent to achieve full compliance?
How much of the Measure S hospital allocation would be used specifically for seismic compliance, as opposed to broader modernization, equipment and technology?
And perhaps most importantly:
If Measure S passes, would the state grants and other available financing remain available to Marshall in addition to the new local sales-tax revenue?
The Measure S initiative itself says its revenues may not be used to replace or supplant existing funding or other payments available to an eligible hospital.
That provision makes the question even more relevant.
The issue is bigger than Marshall
For El Dorado County residents, this is not simply a dispute over one hospital.
The measure also promises new funding for local fire agencies and wildfire-prevention organizations.
The initiative would allocate 45% of remaining revenue to specified fire agencies and 5% to nonprofit wildfire-prevention organizations. It also prohibits the new money from supplanting existing funding.
Those are separate public-safety questions that deserve their own examination.
But Marshall’s seismic requirements are clearly a major justification for putting Measure S before voters.
That makes the hospital funding trail fair game for public scrutiny.
The bottom line
California did not leave Marshall with no state funding option.
The state created a seismic grant program in 2021. The program opened in 2023. Marshall is explicitly listed as an eligible rural hospital. And a 2025 industry presentation identified a roughly $650,000 Marshall seismic application as being in process.
At the same time, there is no evidence in the current HCAI award list that Marshall received one of the 29 announced SRHRP grants.
That does not prove Marshall was denied.
It does not prove the application was abandoned.
And it does not prove state grants could have covered the hospital’s full remaining seismic obligations.
What it does prove is that state assistance existed before Measure S — and Marshall was eligible for it.
That changes the question voters should be asking.
Measure S is not a choice between paying for Marshall’s seismic work and allowing the hospital to receive nothing from California.
It is a choice about whether El Dorado County should create a new, locally controlled 30-year revenue stream — one projected to generate approximately $13 million annually — while state seismic assistance, other financing mechanisms and regulatory extensions also exist.
Before voters are asked to add another 3/8% to the county’s sales-tax rate, they deserve a complete accounting.
What did Marshall ask California for?
What did California offer?
What did Marshall receive?
What remains unfunded?
And ultimately:
Why is Measure S necessary to close the gap?
Those are not anti-hospital questions.
They are taxpayer questions.
And El Dorado County voters deserve the answers before they mark their ballots.
Sources
- California Department of Health Care Access and Information, Small and Rural Hospital Relief Program.
- California Grants Portal, Small and Rural Hospital Relief Program.
- California Senate Bill 395, 2021.
- California Legislative health budget hearing, March 2025.
- California Society for Healthcare Engineering, 2025 Annual Institute materials.
- El Dorado County Elections Department, Measure S.
- Full text of the El Dorado County Emergency Preparedness, Healthcare Access and Wildfire Prevention Initiative.
- Measure S campaign FAQ.
- HCAI seismic compliance guidance and AB 869 materials.
