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Stakes are high as voters gird for November showdown

Nothing is certain except death and taxes — and the crowded Nov. 6 ballot has both.

And a lot more.

In addition to rival tax initiatives pushed by Gov. Jerry Brown and civil rights attorney Molly Munger, Californians will vote on attempts to throttle the clout of organized labor, change state law in criminal sentencing, close a $1 billion corporate tax loophole, force labeling of genetically engineered food and tighten the penalties for human sex trafficking 

Two other measures, a good-government initiative that calls for a two-year state budget and a referendum to veto the legislative map drawn by the voter-approved California Citizens Redistricting Commission, bring the total count to eleven.

Aside from its unusual variety, one feature of November’s ballot is the sweeping importance of the propositions.

“These are not specialty issues, these are big issues,” says Bob Stern, former President of the Center for Governmental Studies and longtime observer of Sacramento politics. “The voters have an opportunity to deeply affect California laws.”

   
2012 also is the year of the super-rich crusader. Some propositions on the November ballot are being driven by a single sponsor paying the lion’s share of the signature collection campaign. In this way, wealthy private citizens can circumvent the Legislature, affecting policy by making their cases directly to the voters.

An example of this practice is Munger’s tax-increase proposal to raise money for public schools, Proposition 38. Munger has donated some $28 million to the campaign.

But she is by no means alone: Powerful, individual sponsorship lies behind measures dealing with automobile insurance rates, genetically engineered foods, the closure of corporate tax loopholes –  one donor alone contributed $20 million on behalf of this initiative — and an attack on the political financing of labor unions.

With such high stakes and so much money, the coming months should bring a blizzard of television advertising. It will be a challenge for Californians to keep ahead of the campaigns’ hype.

Following is a rundown of the measures on the ballot.

Proposition 30
Gov. Brown’s effort to raise revenue – from $6.8 billion to $9 billion, depending on the estimate — for the strapped state would boost sales taxes and raise income taxes on the wealthiest Californians, and use the money to help schools and public safety and ease the state’s debt load.

The initiative is the direct result of the state’s dire budget condition.

Proposition 30 would raise the statewide sales tax to 7.5% and create three new high-income tax brackets over seven years for those with taxable incomes exceeding, $250,000, $300,000 and $500,000, respectively. The highest bracket would be 12.3 percent.

The Democratic governor is pushing hard for the initiative and has put together a coalition backed by some of the state’s most powerful interests. In effect, the governor’s plan reflects a two-part message: If it is approved, there may be marginal improvements in the status quo as the state moves gingerly into an economic recovery. If it is rejected, there will be new, deep cuts in education and other critical programs.

Heavily supported by labor, the backers include the California Teachers Association.

Most voters appear to support the plan, but their backing is dwindling and they now are closely divide six weeks before the election. 

Proposition 31
This measure would set up a two-year budget – California now does it annually – and allow the governor to unilaterally cut programs during times of declared fiscal emergency, a declaration that the governor could make. That authority, by the way, was sought by former Republican Govs. Pete Wilson and Arnold Schwarzenegger, but rejected by suspicious voters.

But the measure addresses a litany of problems in the legislative process.

It requires bills to be in print for three days before they can be acted upon by the Legislature, an attempt to quash the 11th-hour hijacking of bills known as “gut and amend” – a time-honored activity in the Legislature — that wind up getting approved without legislative review.

It would also require that legislative attempts to spend more than $25 million be accompanied by a description of revenue sources or cuts to accommodate the new spending, and it orders performance reviews of all state programs.

Proposition 31 is backed by the reform group California Forward, among others, and billionaire Nicolas Berggruen, financial backer of the Thing Long Committee reform group.

Proposition 32
In terms of hardball politics, Proposition 32 is the hottest measure facing voters in November.

Officially, it’s called the “Stop Special Interest Money Now (SSIM) Act,” but in reality Capitol observers in both parties say it is an attempt to curtail the political fund-raising of labor unions.

In some respects, Proposition 32 is similar to the “paycheck protection” ballot initiatives in 1998 and 2005, which like the current incarnation sought to curb union influence by reducing their fundraising capacity.

Under current law, public union members can opt out of having their union paycheck deductions go toward political uses. Under Proposition 31, union members would have to annually opt in before their fees could go towards political uses.

Because corporate political donations are restricted by federal law, corporations already rely on voluntary individual donations in order to raise political capital. As such, paycheck protection would be a disproportionate blow to the unions.

Unlike previous paycheck protection efforts, Proposition 31 also blocks direct contributions from “corporations, labor unions, and government contractors” to political candidates.

Proponents say this provision is the essence of the initiative, and that it applies equally to corporate donors as well. Critics allege that the nature of campaign fundraising makes it a smokescreen, as donations can still be funneled to candidates through unaffiliated political action committees.

Supporters include the California Republican Party, Charles Munger Jr. and former Sen. Gloria Romero of Los Angeles, a Democrat. Other big sponsors include the billionaire Koch brothers, who last week donated $4 million to the pro-32 campaign.

Proposition 33
The Automobile Insurance Discount Act, pushed by Mercury Insurance czar George Joseph, allows car-insurance companies to consider a driver’s history of coverage with other companies in setting rates. This would allow companies to offer “persistency discounts,” or lower rates to customers who have been continuously covered, even if that coverage was by a rival company. It would also, however, allow them to hit those who have not had continuous coverage with higher rates.

And there’s the rub: Critics say Proposition 33 is an attempt to block consumers from shopping around. Ironically, the measure reflects the persistency of insurers – or at least, Joseph – who unsuccessfully have sought this change of law for years, both at the ballot box and in the Legislature.

This practice was specifically outlawed in 1988 by another voter initiative, Proposition 103. While insurance companies claimed that using coverage history to calculate rates would allow them to reward safe drivers, proponents of 103 argued that the additional surcharges for disrupted coverage were discouraging uninsured drivers from becoming insured.

In 2010 the auto-insurance giant Mercury Insurance Group financed an initiative to allow using coverage history, but it was defea
ted by a narrow margin. The campaign for the 2012 proposal early  on received $8.1 million from Mercury founder and chairman Joseph.

The biggest supporter of this initiative is Joseph; consumer groups oppose it.

Proposition 34
The legality of California’s death penalty has been replete with twists and turns and the subject of intense political debate for decades. After Aaron Mitchell’s 1967 execution for killing a Sacramento policeman, the debate was intensified and ultimately the death penalty was barred, then reinstated.

After 25 years, in 1992, the executions began again.

Now, 725 people – including 19 women – reside on California’s Death Row.

Proposition 34 would outlaw California’s death penalty and replace it with life imprisonment without the possibility of parole.

The most visible proponents are Jeanne Woodford, the former warden of San Quentin and a former head of California’s correctional system; former L.A. District Attorney Gil Garcetti and Don Heller, a well-known former prosecutor in Sacramento and a prominent defense attorney.

However, they face an uphill fight: According to statewide polls, most voters support the death penalty. Last year, a Field Poll showed that more than two-third of California voters favored retaining the death penalty.

Proposition 35

Officially, it’s called the “Californians Against Sexual Exploitation (CASE) Act,” and it appears to be prompted by noble aims.

The CASE Act contains a constellation of provisions aimed at clarifying the legal definitions of human trafficking and tightening the penalties. The law also prevent evidence of personal sexual conduct from being used against a human trafficking victim in court.

Californians Against Slavery, the non-profit which organized the campaign to put CASE on the 2012 ballot, claims current laws do not go far enough in prosecuting traffickers and protecting victims.

“I was outraged,” says Daphne Phung, Californians Against Slavery’s executive director, who was inspired to found the organization by the MSNBC documentary Sex Slaves in America. “In many cases,” she says, “the legal system criminalizes victims.”

Critics suggest that the initiative infringes on federal law, which has premier jurisdiction over human trafficking, but Phung says Proposition 35 is needed at the state level to protect those who are victimized by sex traffickers and to ensure that wrong-doers are punished. The Legislative Analyst, the Legislature’s nonpartisan fiscal adviser, said it was uncertain whether Proposition 35 would lead to increased prosecutions.

The biggest backer is Chris Kelly, the former chief privacy officer of Facebook, who has donated some $1.8 million to the effort.

Proposition 36
California’s “Three Strikes” law, while not as sacroscanct as Proposition 13, has stood withstood attempted change for 18 years, including an effort that was turned down by voters in 2004.

The original law, approved in 1994, requires life in prison for certain repeat offenders.

Proposition 36 would change that law to require defendants to be sentenced to life only when their new conviction is “serious and violent,” an attempt to deal with cases in which defendants convicted of minor shoplifting offenses wound up with life in prison.

“For one guy, it was filling a water cup with soda at a restaurant.” says Dan Newman, a political strategist for the initiative.

The measure would retain life sentences for rapists, child molesters, firearm violators and certain other offenses.

Proposition 36 also would allow judges to re-sentence inmates serving life sentences for a third conviction that was not serious or violent and if the judge determines they pose no risk to public safety.

Some 4,000 third-strike prisoners currently doing time for minor crimes would be able to appeal for resentencing under the new law.

Proposition 37

Even for a California ballot, this is an usual fight, pitting natural foodies against the corporate food producers, chemical companies and their allies. Thus far, some $25 million has been into the campaign to defeat Proposition 37, which would require genetically modified foods to be described as such in their labels. The measure includes criminal penalties for those who improperly call their foods “natural.”

The measure has been backed by the Illinois-based alternative health guru Joseph Mercola, known for his health-product website and his anti-establishment views on practices such as vaccination and fluoridation.

The initiative’s campaign manager, Doug Linney, has distanced the statute from this legacy. “Do we embrace everything our supporters believe? No.” he has said. “The campaign is to label genetically modified food. People have a right to know. That is the simple premise of the initiative.”

Supporters have raised some $2.5 million – a tenth of the opponents – much of it from natural food producers and vendors.

Proposition 38

The single most sweeping tax measure on the November ballot is Proposition 38, authored by L.A. attorney and civil rights activist Molly Munger, which would raise some $10 billion per fiscal year, most of it for schools. The taxes, unlike Gov. Brown’s Proposition 30, would not target only the wealthy but would be spread more broadly over a larger spectrum of taxpayers.

Also unlike Brown’s proposal, the money that is raised would go primarily to public schools and early childhood education – together, about 70 percent – and the rest would go to pay down the state’s debt. That proportion, however, would change during the 12-year effective date of the initiative, if approved.

Proposition 38 would affect most California taxpayers, increasing rates on all but the lowest income groups through 2024.

Proposition 38 remains on the ballot, despite heated attempts by Brown to negotiate with Munger and keep her measure away from voters, on the theory that voters, if confronted by several tax increases, will turn them all down. In the end, Munger refused to withdraw after a fight that included court skirmishes.

If both measures receive voter approval, the one that that receives the most votes will go into effect where their provisions conflict.

Unlike Brown’s plan, Proposition 38 does not include a sales tax.

Proposition 39

This measure targets a tax break for corporations that experts say amounts to more than $1 billion annually and allows companies to calculate their method of taxation.

Proposition 39 would repeal a tax loophole for corporations that operate out-of-state, requiring them to calculate what they owe to the state of California based on the percentage of their sales that occur in-state.

The Legislative Analyst’s Office estimates the law would result in roughly $1 billion in new revenues annually, of which $550 million would be earmarked for “funding projects that create jobs in California improving energy efficiency and expanding clean energy generation.”

“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 legislative analyst noted.

This ballot initiative is being championed by hedge fund billionaire Tom Steyer, who began bankrolling the signat
ure collection campaign after the Legislature defeated the proposed law. “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.

Proposition 40

The Republican-driven referendum on the state Senate redistricting plan drawn up by a voter-approved commission appears to be an afterthought now – the backers have halted their campaign.

Even so, California voters are fickle lot and one is often surprised at their choices.

Proposition 40, which would toss out the Senate districts, 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 map 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.

But that was then. They have since halted their effort.

It may be just as well: A referendum can be confusing. A “yes” on Proposition 40 means a vote in favor of keeping the existing districts. A “no” vote is a vote to reject the districts.

Ed’s Note: Max Theiler, a recent UC graduate, is a writer for Capitol Weekly.


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