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Assemblymember Portantino’s Bill to Limit Executive Compensation for Drug Treatment Facilities Passes Senate

Sacramento – The state Senate has overwhelmingly approved legislation to provide oversight of taxpayer dollars used to fund drug treatment programs throughout California. AB 564, authored by Assemblymember Anthony Portantino (D-La Canada Flintridge) clarifies that drug treatment executives cannot receive excessive salaries from public funds and will be limited to federal guidelines for compensation in similar fields.

"In this era of budget squeezes this is an opportunity to protect precious public resources and bring a standard and oversight to an area that has been plagued by concerns and questions," stated Portantino. "Clients need these important services and we have to make sure they get them while also ensuring our limited dollars are spent efficiently."

Assemblymember Portantino introduced AB 564 after concerns about executive compensation were highlighted in a Los Angeles Times article detailing how some executives were making $400,000 to run non-profits funded by public dollars, while simultaneously owning an interest in the company and collecting rent.

Current state law provides no limit to the amount of public funds that can be spent on executive compensation for those who operate drug and alcohol treatment facilities. AB 564 will cap all forms of executive compensation at $196,700, similar to the cap used by the National Institutes of Health (NIH).

The bill now moves to the Assembly for final approval before moving to the governor for signature.

 

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