California’s 2012 ballot lineup contains the most far-reaching proposals for public-education finance in 25 years. But equally significant to California’s political landscape is the acceleration of a trend in which a small number of wealthy individuals pour in tens of millions of dollars to push their political beliefs.
In terms of impact on public education, this year’s election — in Propositions 30 and 38 — offers the most crucial choices since voters approved Proposition 98 in 1988, the public school-funding guarantee.
But unlike Proposition 98, which sought to protect schools from annual budget cuts in the Legislature, the Nov. 6 election allows voters to decide whether to provide money for schools by making an end-run around the Legislature entirely and going directly to the voters’ pocketbook.
The ballot propositions represent the clash of California’s most powerful political forces. The most dramatic example: Proposition 32, backed by the Chamber of Commerce and the Republican Party and any number of business interests from inside and outside the state, which would cut into the ability of unions to collect money for political purposes.
That’s not all.
Closing corporate tax loopholes, tightening the laws against sex trafficking, forcing labels on genetically engineered food, blocking the death penalty, repealing the “three-strikes” law, creating a two-year state budget – all of these, and more, will be decided by the electorate.
Here’s our rundown.
Proposition 30 was spawned by legislative inaction.
With the Democrat-controlled Legislature unable to reach a bipartisan agreement on spending, cuts and taxes, Gov. Brown, a Democrat, pushed a ballot initiative that would raise at least $6 billion annually. It would temporarily boost the statewide sales tax by a quarter-cent per dollar for four years and raise income taxes on the wealthiest taxpayers – those with taxable incomes of $250,000 or more — for seven years.
For the wealthy, there is a graduated scale.
At the $250,000 level, the increase for single filers would be 1 percent above the current level of 9.3 percent. For those at the $300,000 level it would be 2 percent, and for $500,000 and over it would be 3 percent higher, or a total of 12.3 percent, which reflects the current 9.3 percent plus the additional 3 percent contained in Proposition 30.
For joint filers, the dollar amounts are doubled, to $500,000, $600,000 and $1 million, respectively. For those filing as heads of household, the additional 1 percent would kick in at $340,000, 2 percent at $480,000 and 3 percent at $680,000 and over. For filers with $1 million or more in taxable income, the total tax hit would be 13.3 percent – 9.3 percent under existing rules, 3 percent in Proposition 30 and 1 percent approved earlier by voters for mental health programs.
The money would provide an estimated $3 billion annually for schools alone, plus provide money for local governments to absorb the requirements of what is called “realignment,” in which the state shifts correctional and others services to the counties and covers their costs.
Supporters include Gov. Brown, the California Democratic Party, the California Teachers Association, the California Federation of Teachers, the League of Women Voters, and SEIU Local 1000.They argue that Proposition 30 must be approved to provide a stable source of revenue for education and public safety, as well as to protect the 2012-13 budget, which included the money sought in Proposition 30. If the measure is defeated, they say, state services will take a huge hit, led by education. K-12 schools and community colleges together would face $5.35 billion in cuts, according to the Legislative Analyst.
Opponents include the Howard Jarvis Taxpayers Association, the Small Business Action Committee, Stanford physicist Charles Munger Jr. They contend that Proposition 30 will not protect school funding, reflects the inability of a profligate Legislature to curtail spending and does nothing to attack the bloat of government waste. They also say it will unfairly punish small businesses and contains no requirement for public pension and spending reforms.
The idea of a two-year budget instead of the current one-year spending plan has been batted around Sacramento for years, but it has never taken hold. The expectation is that a two-year budget would provide greater stability, allow more nuanced fiscal projections and at least limit the annual partisan budget drama that grips the Capitol, irritates the public and exacerbates the view that the state is dysfunctional.
Proposition 31 would create a two-year budget cycle. It broadens the governor’s existing authority to act – i.e., cut spending — in fiscal emergencies and orders the Legislature to set aside money to oversee public programs for their efficiency. Lawmakers would be required to find cuts or new revenue before approving any program that costs more than $25 million.
The proposition contains a number of good-government proposals, such as requiring bills to be in print 72 hours before a vote – a provision meant to address the 11th-hour frenzy at the end of a legislative session when complex bills are rushed through hearings and voted upon, even though the lawmakers themselves aren’t aware of their contents.
But Proposition 31, which has flown largely under the radar this year, also contains some surprising provisions, including the shift of $200 million annually to local governments, who would use the money to develop strategic action plans to improve public safety, the jobs climate and health. It also requires local governments to evaluate the programs and demonstrate that they, in fact, have met their goals.
Supporters, led by the bipartisan reform group California Forward, believe Proposition 31 will bring stability and transparency to the budget process, and require accountability of local governments.
Opponents, including the California Democratic Party, the League of Conservation Voters and the California Tax Reform Association, say Proposition 31 is too costly and allows local governments to alter regulations that are more properly in the purview of the state.
Proposition 32 is the 800-pound gorilla of the Nov. 6 election, the latest in a series of corporate- and Republican-led attempts to curtail the political power of organized labor.
The proposition, which by the beginning of the month had generated a total of more than $50 million in campaign spending, bars unions and some corporations from giving directly to ballot measure campaigns and candidates.
But well-financed independent expenditure committees, the so-called IEs, are exempted from Proposition 32. The IEs, their financial disclosure far less rigorous than candidate-controlled campaigns, are pouring millions of dollars into California campaigns from across the political spectrum, much to the displeasure of the state’s political watchdog, the Fair Political Practices Commission.
The IEs’ influence has grown exponentially over the last few elections – some $8 million in IE money already has been spent, but that is surely a partial figure. Moreover, outside money from entities that can spend money on California campaigns and not disclose their donors are not covered under Proposition 32. Thus, the Arizona-based, Republican-led committee that recently dumped $11 million into efforts to support Proposition 32 would not be covered.
Charles Munger Jr., a Stanford physicist, has donated some $10 million the pro-32 effort.
The crux of Propositio
n 32 is its prohibition on the use of payroll deductions for political activities, a common practice of unions – dues also are typically deducted automatically – but which would have little impact on corporations, which as a rule do not engage in the practice. In effect, the measure would stifle labor’s campaign cash while leaving corporate money unscathed. Proposition 32 would cost about $1 million a year to enforce, according to the Legislature’s nonpartisan fiscal adviser.
California’s ballot propositions, whatever their partisan origins, often reflect clever, deft and ambiguous language – one need look no further than an array of campaign finance reform measures, for example. And Proposition 32 falls into that category, ostensibly offering a balanced approach but in fact targeting labor unions, which are leading and financing the anti-32 campaign.
Since the 2000 election cycle, of some $1 billion in total spending, business interests have outspent labor interests in Sacramento by nearly 3-to-1.
Supporters of Proposition 32, which include Silicon Valley’s Thomas Siebel and Charles Munger Jr. – the latter has provided some $23 million for the effort — say their measure is needed to curtail special-interest political money both corporate and labor sources, and to break the stranglehold on Sacramento enjoyed by well-heeled pressure groups and their lobbyists. The California Republican Party and the Howard Jarvis Taxpayers Association also support Proposition 32.
Opponents of Proposition 32, led by public employee unions and the California Democratic Party, say the proposition was deliberately written to deliberately exclude powerful corporate interests and to attack labor. The League of Women Voters also opposes Proposition 32.
If there is any measure on the November ballot that reflects the interests of a single person, it’s Proposition 33, the brainchild of billionaire executive George Joseph, the politically savvy leader of Mercury Insurance, which he founded 53 years ago.
He has put some $16.2 million – almost the entire pro-Proposition 33 budget — into the effort to pass the measure, which would allow auto insurance companies to charge higher premiums to customers who have gaps in their past coverage, while those who have uninterrupted coverage – known in the industry as the “persistency factor” — for five years or more would get discounts.
The opponents are led by Consumer Watchdog, a Santa Monica-based group that targets the insurance industry and wrote Proposition 103, the landmark 1988 initiative that created the position of elected insurance commissioner and forced new rules in insurers’ practices. On Proposition 33, Consumer Watchdog has been outspent about 30-to-1.
The discounts under Proposition 33 would be available regardless of the customer’s company, thus allowing drivers to shop around while maintaining their price breaks. Those with a history of interrupted coverage could be penalized, however, regardless of their driving records.
Joseph has sought similar provisions to Proposition 33 in the past, including legislation that made it through the Legislature but was ultimately vetoed, and an attempt two years ago as Proposition 17 that voters rejected.
Proposition 33 appears relatively simple, but in fact it reflects the economics and intricacies of the automobile insurance industry, which is a powerful player in California politics. Interestingly, the industry as a whole is neutral on Joseph’s effort.
Supporters, besides Joseph, include former Republican Senate Leader Jim Brulte, former Assembly Speaker Willie Brown and the Greenlining Institute, which received some $195,000 from Joseph. They contend that Proposition 33 will benefit loyal customers, allow them freedom to engage in comparative shopping and ultimately lower their insurance rates.
Consumer Watchdog, which through Oct. 10 had spent about $212,000 against Proposition 33, is the leading opponent. The group says Proposition 33 will enable companies to unfairly penalize drivers solely because of their interrupted coverage, and thus charge more even for drivers with excellent driving records.
Proposition 34 is the first of three law enforcement-related measures on the Nov. 6 ballot. It would repeal California’s death penalty and replace it with life in prison without parole. It would apply not only to future cases but retroactively as well, thus eliminating the possibility of execution for some 725 inmates currently on Death Row.
It also would set up a new fund targeting homicide and rape investigations and require the inmates to work behind bars with a portion of their pay going to their victims.
The debate over the death penalty has been a subject of fierce discussion for decades in California, although in recent years it has dropped lower in the ranking of public concerns. Tough-on-crime politicians – Republican Gov. George Deukmejian comes immediately to mind – built their careers on their support of the death penalty, and while both Browns – Pat and Jerry – suffered political damage for their death-penalty views.
After Aaron Mitchell’s 1967 execution for killing a Sacramento policeman, the debate was intensified and ultimately the death penalty was barred, then reinstated. Twenty-five years later, in 1992, the first execution since Mitchell’s was carried out at San Quentin.
Capital punishment, under California law, can be applied to those convicted of killings with “special circumstances,” which include murder-for-hire, the killing of a police officer, murder from ambush and murder of a kidnap victim, among others.
Voters are closely divided on the death penalty and there are sharp partisan differences. The closer divide, however, reflects an increase in support for abolishing capital punishment. Last year, a Field Poll showed some two-thirds of the electorate in favor of the death penalty.
Republicans favor keeping the death penalty by nearly 3-to-1, while Democrats support abolishing executions by about 50 percent to 37 percent, according to a Field Poll at the end of September. But fully 13 percent of the electorate remained undecided on the issue five weeks before the election.
Supporters say abolishing the death penalty will save millions of dollars annually and point to an assessment from the Legislative Analyst’s office Proposition 34 ultimately will save some $130 million annually. Supporters include Jeanne Woodford, the former warden of San Quentin and chief of the state’s prison system, and former L.A. District Attorney Gil Garcetti.
Opponents include a number of law enforcement groups and the California District Attorneys Association, as well as the California Republican Party.
Proposition 35 deals with human trafficking, an unusual issue for state ballot since such trafficking comes largely under federal jurisdiction. It also drew little opposition until late in the election cycle.
The measure, with hefty financing from former Facebook security guru Chris Kelly, would expand the definition of a sex trafficking crime and allow cases involving minors and child pornographers to be pursued as human traffickers, even when they do not involve the victim’s coercion. The change would be added to the existing list of criminal violations associated with human trafficking. It would also require human sex traffickers to register as sex offenders.
The initiative would bring state penalties closer to the federal statutes, lengthening prison sentences by up to 12 year
s or 20 years to life, depending on the crime, with the longest minimum sentence – 20 years – for forcibly sex trafficking a minor. Fines of up to $500,000 would be imposed on the offender, with courts raising the penalty up to $1,000,000 at the courts discretion depending on the severity of the crime.
Proposition 35 evolved from two bills that last year failed to make it through the Legislature, SB 57 by former Sen. George Runner and AB 755 by Assemblymember Cathleen Galgiani. One feature of AB 57 contained in the initiative is the requirement that all sex offenders to register their online aliases with the state.
The major supporters are Daphne Phung, the executive director of Fremont-based Californians Against Slavery, and Kelly, who founded the Safer California Foundation.
Opponents include the American Civil Liberties Union of Northern California and the Erotic Providers Legal, Education and Research Project are opponents, contending that Proposition 35 may limits free speech and requires lengthier prison sentences that could be viewed as constitutionally cruel and unusual.
Eighteen years ago California voters, reflecting a tough-on-crime sentiment, approved Proposition 184, the “Three Strikes” law, which allowed for life in prison for people who were convicted of a felony and who earlier had two serious or violent felony convictions. Under the Three Strikes law, the third “strike” need not be “serious or violent.”
The law was inspired by Mike Reynolds of Fresno, whose 18-year-old daughter, Kimber, was murdered in 1992.
The Three Strikes law, in effect, was a toughening of earlier California policy, in which those convicted repeatedly of crimes were defined as habitual criminals and thus subject to longer prison terms. Currently about 9,000 inmates are incarcerated under Three Strikes.
Proposition 36, with some exceptions, would allow a life term under the third strike only if the latter was serious or violent, including rape, child molestation and murder. It would also allow life terms in cases where the third strike is not serious or violent, but the previous two strikes were.
Those currently in custody for a third-strike offense that is not serious or violent could apply for a reduced sentence – which by one estimate may apply to about 3,000 prisoners. The state’s budget analyst believes the measure would some $70 million annually on reduced incarceration costs.
Supporters, who include George Soros, a wealthy patron of Democratic causes; Stanford Law School Professor David Mills and prosecutors in Santa Clara County and San Francisco, say Proposition 36 would ease prison overcrowding, more properly decide punishment based on the crime and not upon a formula and save the state money.
Opponents, led by the statewide associations for police chiefs and sheriffs and the Peace Officers Research Association of California, include the prosecutors’ main lobbying arm, the California District Attorneys Association. They contend that public safety will be threatened as violent felons released to the streets.
Requiring full disclosure on food labels would seem a no-brainer, but the fight over Proposition 37 has generated more heat than light.
Proposition 37, pushed by the organic food industry, would force food producers — with exceptions — to put labels on their raw or processed product listing foods or ingredients that are genetically engineered. Some 40 other countries, including China and India, have similar labeling requirements.
The organic food industry and its allies have spent $8 million on the campaign, while opponents led by Monsanto and other major chemical companies and food producers, have spent nearly $36 million through last week.
Genetically modified foods are nothing new: For nearly two decades, Californians have been consuming foods that have been genetically engineered, typically because seeds have been modified to make them more resistant to weather and pesticides. The overwhelming majority of soy beans and corn grown in the U.S. are genetically engineered, for example.
Existing law does not require foods that have been genetically modified to reflect that fact. Proposition 37 would require that description, and would prevent any genetically engineered foods from using the term “natural.” The disclosure required by the measure is not seen as health-related as much as a desire for transparency and accuracy.
A critical dispute over Proposition 37 involves not what’s covered, but what’s exempt.
Medicine, alcoholic drinks, restaurant-served food for immediate consumption, pet foods and meat and products from animals — such as cow’s milk and beef — that consume genetically engineered foods all would be exempt. Organic foods, by definition, also would be exempt.
Supporters believe consumers should know exactly what they are getting when they buy food products and should be able to use that information to make informed decisions about their purchases. They argue that much of the anti-37 sentiment has been fomented by a massive communications blitz by the well-heeled opponents.
Opponents contend the measure could open the door to shakedown lawsuits, is propped up by ambiguous scientific studies and places onerous economic burdens on food sellers to ensure that the product labeling is accurate. They also note that numerous California newspapers have editorialized against the measure.
When Pasadena civil rights attorney Molly Munger launched Proposition 38, she put herself head-to-head with Gov. Brown, who spearheaded a rival tax initiative and who demanded that the wealthy Munger back off. She didn’t, and here we are — after court fights and rhetorical warfare.
Unlike Brown’s initiative, which temporarily raises income taxes on the wealthiest taxpayers, Proposition 38 would raise income taxes across the board on most Californians except those earning the least. It would raise about $10 billion annually for 12 years — and would continue in place if voters reauthorized it.
There would be a sliding scale of increases on those earning above $7,316 annually in taxable income of .4 percent at the lowest levels to 2.2 percent at the highest. Thus, a taxpayer who currently pays 8 percent state income tax on $48,029 of taxable income would pay 9.4 percent if Munger’s proposal were approved. A taxpayer who currently pays 9.3 percent on $2.5 million in taxable income would pay 11.4 percent.
During the first four years, about $6 billion annually would go to schools, $1 billion would go to early education and $3 billion would go to pay off bonded indebtedness. After 2018, some $1.5 billion would go to early education and $8.5 billion annually would go to schools.
Munger, who has donated some $33 million to her own campaign, notes that Proposition 38 is education-driven and the revenues from the measure are intended for schools, unlike Proposition 30 which provides money to local entities to cover realignment costs, as well as to schools.
Proposition 38, unlike the governor’s proposal, is not linked to the state budget, which already has included the Proposition 30 revenue in its calculations for schools, public safety and other programs.
Thus, if Proposition 38 were approved, the state budget could continue to reflect a multibillion-dollar shortfall — a shortage that would only be lessened if Proposition 30 were approved. If both measures were approved, under California law the one with the most votes would take effect where the provisions o
f the measures conflict. Conceivably, both measures could be approved but the budget would remain threatened if Proposition 38 received more votes.
Those approvals will be hard won, according to recent polls, which show the governor’s initiative slightly under 50 percent approval and Proposition 38 lower still at about 42 percent — reflecting Brown’s fears that putting the two measures on the ballot at the same time could doom them both.
Supporters contend Proposition 38 will provide public schools with an assured source of revenue independent of the political machinations of the governor and Legislature. The needs of education score high on voters’ priorities, they note, and Proposition 38 provides them with the opportunity of meeting those needs.
Opponents, led by Brown and his political supporters, include Allan Zaremberg, president of the California Chamber of Commerce, and both major political parties are dubious. They contend that Proposition 38 unfairly raises taxes on lower-income earners and does not provide sufficient accountability over how the money ultimately is spent.
Proposition 39 is intended to resolve a complex tax issue involving multistate corporations that was approved three years ago.
It would raise about $1 billion by closing a tax break for the corporations that allowed the companies to calculate their tax liability based on the number of workers inside California, their in-state property ownership and their in-state sales — factors that allowed them to choose a lower tax liability. Companies with a heavy California business load but no physical presence particularly benefited.
Instead, Proposition 39 would require that these out-of-state companies calculate their California tax based on the proportion of their sales that occur inside the state.
Under Proposition 39, about $1 billion would be raised annually for the state, with more than half — about $550 million — going to develop clean energy and energy conservation.
“For a business that operates both in California and in other states or countries (a multistate business), the state taxes only the part of its income that was associated with California. While only a small portion of corporations are multistate in nature, multistate corporations pay the vast majority of the state’s corporate income taxes. This tax is the state’s third largest General Fund revenue source, raising $9.6 billion in 2010-11,” the Legislature’s nonpartisan fiscal adviser noted.
Corporate taxes currently bring in about $9.6 billion annually.
This ballot initiative is being championed by hedge fund billionaire Tom Steyer, who began bankrolling the signature collection campaign after the Legislature defeated the proposed law and who has put nearly $22 million of his own money into the campaign. “We have a loophole, it’s worth over $1 billion a year, we should close the loophole.” Steyer has said.
Critics of the initiative claim it will increase the cost of doing business in California, driving jobs and companies out-of-state. Led by the California Manufacturers and Technology Association and anti-tax activists, they contend that California already as a climate unfriendly to businesses and that Proposition 39 simply will make that worse.
Proposition 40 is not a ballot initiative, it is a referendum.
That means voters are being asked whether to uphold an existing law. A “yes” vote means the current law, the redrawn state Senate districts — there are 40 of them across California — approved by an independent, voter-approved commission based on the latest population numbers,
will remain in effect. A “no” vote means they will be tossed out.
The Republican-driven referendum on the state Senate redistricting appears to be an afterthought now because the backers have halted their campaign for a “no” vote. The state Supreme Court, ruling in a case brought by foes of the commission’s districts, ruled that the new districts could be used this year.
Even so, California voters are fickle lot and one is often surprised at their choices. Proposition 40, which remains on the ballot, would reject the Senate districts if the “no” vote wins, may be a case in point.
Proposition 11 of 2008 took the power to set state legislative districts out of the hands of the Legislature and gave it to a separate committee called as the California Citizens Redistricting Commission. Although it passed by a close margin in 2008, Proposition 11 was doubly bolstered in 2010 by voters who rejected an attempted repeal and approved a separate proposition that granted the commission the additional power to draw California’s congressional districts.
When the Senate maps came out, a Republican-backed group calling itself Fairness and Accountability in Redistricting, said it hoped to halt its implementation and Proposition 40 was born. They accused Democrats of hoodwinking the commission into drawing up districts that consolidate their own power.
Currently, there is no major opposition to the commission’s districts. According to the legislative analyst, if the Senate districts were tossed out, it would cost about $1 million to draw up new ones.
Ed’s Note: Corrects original by deleting reference to CTA in proponents section under Proposition 38, and deletes reference to George Joseph.