November 2012 Propositions
by Barbara Stone, Ph.D., election analyst

This year is the first election under the new primary rules and the first districts created by a commission. In addition, the Democrats in our Legislature changed the law so that ballot propositions now appear only in November. Already, we can see some interesting results.

• The new system calls for the top two finishers in the June primary to run-off in November. That has resulted in a number of races where the final choice is between two members of the same party. That is forcing candidates to look for votes in the other party, the new swing voters. The idea was to elect more moderate officials; it may actually be working that way in some areas.
• There is a methodology to working the new system that some folks seem not to have grasped. For example, there is a new congressional seat in San Bernardino that has nearly equal numbers of Democrats and Republicans. Yet the run-off is between two Republicans. The key appears to be that two viable Republicans ran but four Democrats did. Thus a seat that should be a toss-up is sure to be won by a Republican.
• The redistricting by commission was not “fair” in the sense of being impartial. It was a Latino gerrymander, though not necessarily a Democrat one. In their zeal to create seats that would produce Hispanic or Latino representatives, the commission freed up some districts where Republicans can be competitive. The San Bernardino congressional seat is one of those. There is another that crosses the LA County/Orange County line to give Linda Sanchez a sufficiently ethnic (Latino, not Vietnamese) district. The net result should be some Republican pick-ups, if their political people are any good.
• In many areas, primary elections have relatively higher Republican than Democrat turnout. That is why the legislature has put all the ballot initiatives in November. That should empower Republicans even more in future primaries, which may play into the methodology for working the new systems that I talked about above.

PROPOSITIONS

PROPOSITION 30 is Governor Brown’s four year sales tax increase of 1/4 cent and seven year income tax increase of 1% to 3% on high income tax payers. Since we already have a 1% surtax on anyone making over $1 million, this would make the top rate in California 13.3%. All the money would go into the state general fund. The measure should be considered in conjunction with Proposition 38; even if they both pass, only the one with the highest vote will take effect. The current state budget is built on the assumption this one will pass.

There are major problems with this measure. It affects the top 1 per cent of filers, who already pay 40% of the state’s Personal Income Tax. These people make most of their money from investments and businesses, not wages and salaries. The fact that the state already depends on them so much is what is leading to the wild swings in state income in bad times. Furthermore, these people can and do move out of state; Tiger Wood doesn’t live here anymore. It is short sighted, stupid policy aimed at solving a very short term fiscal problem. Recommendation: NO

PROPOSITION 31 deals with state and local budgets. It requires that any bill in the legislature that increases certain spending by $25 million or more must say where the money is coming from. It also requires all state bills and amendments to be available to the public at least three days before approval. It allows the governor to reduce spending in a state fiscal emergency if the legislature fails to act, and it creates a two year state budget process. It also creates a process whereby local governments may develop procedures to coordinate public services and pool funds , including some state funds, to administer state mandated programs. This is a complicated measure, but it generally seems to be an improvement. Recommendation: YES

PROPOSITION 32 is the most important measure on the ballot. It forbids unions or corporations from using money deducted from an employee’s paycheck for political purposes. Unions and corporations may not make direct contributions to a candidate or candidate committee, and unions, corporations, and government contractors cannot make contributions to elected officials who play a role in awarding their contracts. This latter includes public sector labor unions with collective bargaining rights. If passed, this will change the face of California politics. Recommendation: YES****

PROPOSITION 33 allows auto insurance companies to set prices based on a driver’s history of insurance coverage, regardless of carrier. Under current law, a company may give discounts only for continuous coverage with itself, not other companies. This measure encourages price competition. Recommendation: YES

PROPOSITION 34 abolishes the death penalty. While I am aware of the extraordinary costs that follow a death sentence, I still believe there are crimes for which this is necessary and appropriate. Recommendation: NO

PROPOSITION 35 increases prison terms and fines for those convicted of human trafficking for sex or labor. It expands the definition of human trafficking to include the creation and distribution of obscene material depicting minors, even if there is no contact with the minor. The first provision increases penalties for an almost nonexistent category of convictions; in March, 2012 there were only 18 people in state prison under existing law. The last provision seems to define an already illegal act as part of an unrelated statute. Recommendation: NO

PROPOSITION 36 modifies the Three Strikes law. Under current law, a criminal convicted of two serious or violent felonies (murder, robbery, rape) must receive a 25 year to life sentence if convicted of any third felony. This proposition says the third strike in most cases must be a serious or violent felony. Any other felony would draw twice the usual term for a new offense but not life. If passed, the measure is retroactive for those whose third strike was not a serious or violent felony.

This measure reflects the reality of most prosecutions today. Many District Attorneys do not prosecute under Three Strikes unless the third strike is serious or violent. They can’t get juries to convict and sentence to life for a more minor offense. Recommendation: YES

PROPOSITION 37 requires that food being sold in California that contains genetically engineered components must indicate that on the label. Grocery stores must insure that foods are correctly labeled, the Department of Public Health must regulate labeling, and individuals may sue the manufacturer or, presumably, the grocery store for failures to properly label food. Exempted are alcoholic beverages, organic foods (the source of much of the money for this) , restaurant food, and prepared foods meant to be eaten immediately.

This is a horrible initiative. In 2011, 88% of the corn and 94% of the soybeans produced in the United States were genetically engineered to protect against pests, increase yield, etc. It is estimated that 40-70% of the foods in grocery stores in California contain some GE ingredients. The increased costs to manufacturers and grocers, plus the costs derived from potential litigation, are tremendous and will be reflected in higher food costs. Recommendation: NO

PROPOSITION 38 raises state income taxes for all tax payers except for the bottom 1%. The increase ranges from .4% to 2.2% and lasts for twelve years. The money goes into a trust fund to pay for schools, child care, preschool, and state debt payments. The money to schools is on top of Proposition 98 mandates.

Passage of Proposition 38 may produce the worst of all possible worlds. It would significantly increase spending in K-12, but at the expense of raising the top income tax rate to 12.5%. None of the money would go to the general fund; thus all the draconian cuts the governor talks about would kick in and we would still have the highest state income tax in the nation. And, to be honest, I don’t believe the biggest problem for schools is money. It is control of schools and school boards by teachers’ union bosses who stand in the way of reforms needed to improve our poorest schools. Recommendation: NO

PROPOSITION 39 limits the methodology multistate businesses may choose to figure their California taxes. It is intended to produce more revenue, half of which must go to alternative energy projects and “energy efficiency.” One may argue whether this will limit the amount of activity by these businesses in California. What seems clear is that this is another subsidy for an energy lobby that cannot compete in an open market. Recommendation: NO

PROPOSITION 40 is the Republican Party’s mistake. It is a referendum to overturn the Redistricting Commission’s Senate lines. After everyone calmed down and after a great deal of money was spent, it was clear the effort wasn’t going anywhere because there was no money for it. Furthermore, the districts really aren’t bad (see my commentary at the beginning of this Update). The actual vote is whether to keep the commission’s lines or abolish them and turn it over to a panel of judges. Recommendation: YES