Palo Alto Weekly

Spectrum - October 15, 2010

Editorial: A mixed bag of state propositions

Array of proposal confront voters with good choices and special-interest scams, some undoing important programs for California's future

Following is the Weekly's analysis of major state propositions, with recommendations.

Proposition 19: Yes

Legalizes marijuana under California but not federal law.

Proposition 19 would legalize the possession and transport of an ounce of marijuana, as well as the cultivation of cannabis on up to 25 square feet per private residence. Local governments would have the option to regulate any related commercial sales and, as with any business, those activities would be subject to applicable sales and other taxes and fees. According to the FBI, 60 percent of drug cartel revenue comes from illegal marijuana sales in the United States. And in 2008, more than 61,000 Californians were arrested for possession of less than an ounce of pot. Combine the law-enforcement time-and-money savings with the Board of Equalization's estimated $1.4 billion in tax revenue for the state, and it's clear from a crime-and-money standpoint that Proposition 19 makes sense, economically and morally. Criticism that the measure is not well-crafted are valid, but it allows for amendment by the Legislature to address any issues that arise. And while recent passage of a law making marijuana possession a mere infraction (like a traffic ticket) in California accomplishes the decriminalization part of Proposition 19, it doesn't achieve the full effects of legalization, including tax-revenue generation.

Proposition 20: Yes

Removes elected representatives from establishment of congressional districts and gives that authority to a bipartisan 14-member redistricting commission.

Proposition 27: No

Eliminates 14-member state redistricting commission and returns redistricting authority to elected representatives.

Propositions 20 and 27 are about how state and federal legislative districts in California should be drawn up — by a bipartisan independent panel or by incumbent politicians. Voting districts are redrawn after every 10-year census. In 2008, California voters passed Proposition 11, which took the redistricting of the state Assembly, Senate and Board of Equalization out of the hands of the Legislature and gave the authority to a 14-member Citizens Redistricting Commission to be established once every 10 years with five Democrats, five Republicans and four others to redraw the districts based on the latest census — while keeping the integrity of geographic boundaries and respecting city, county and neighborhood limits.

But Proposition 11 didn't affect the lines of congressional districts — and Proposition 20 seeks to bring those under the purview of the Citizens Redistricting Commission, as well.

Proposition 27, meanwhile, is a proposal to throw out the Citizens Redistricting Commission altogether and stick with the old ways for both the state Legislature and U.S. congressional districting.

It's no brilliant political insight to suggest that it's probably not the best idea to have legislators influencing their own district's boundaries — or those of their fellow party members.

Proposition 21: Yes

Establishes $18 annual vehicle-license fee to help fund state parks and wildlife programs.

California's state parks are the frequent target of funding cuts — and last year park-goers felt it in a big way: as 150 of our 246 state-operated parks suffered deep reductions in services and hours of operation. This $18 vehicle-registration "surcharge" would create about $500 million in revenue for the parks. Of that amount, 85 percent would go to park operations and most of the rest toward wildlife protection programs. In return, all registered vehicles would receive free daytime parking at all state parks.

Proposition 22: Yes

Prohibits the state from diverting funds intended for transportation, redevelopment or local government projects.

In its farcical triage of annual budget balancing decisions, California often shifts funds away from their intended local targets to help pay for things the state deems more pressing. For instance, cities' transportation and redevelopment-project funds have been unilaterally raided during fiscal crises to help meet other state budget needs. Proposition 22, among other things, would eliminate the state's ability to use fuel-tax revenue for non-transportation purposes, and prohibit the state from borrowing local property-tax funds to pay for schools. While we don't like the trend toward protecting an ever-growing list of services from cuts through ballot initiatives, we also object to the Legislature seizing local funds instead of legitimately balancing the state budget through tax increases or reducing expenses.

Proposition 23: No, No, No!

Suspends air-pollution-control law AB 32 until unemployment drops to 5.5 percent for a full year.

What do the companies Valero Energy, Occidental Petroleum, Tesoro Corp., Tower Energy Group and World Oil Corporation all have in common?

They're all big oil companies based in Texas.

And they've all donated more than $100,000 to put California's Proposition 23 on the ballot.

The oil companies are calling it the "California jobs initiative," but Proposition 23 should more accurately be called the "Kill AB 32 initiative" — suspension of that 2006 legislation until state unemployment drops to a very low 5.5 percent would likely keep the global-warming bill in limbo for years, if not decades, or forever. AB 32, the "California Global Warming Solutions Act of 2006," was enacted four years ago and established the target of reducing the state's greenhouse-gas emissions to 1990 levels by 2020, through stiffer rules and regulations for the energy industry. California is one of the largest emitters of greenhouse gases in the world, and AB 32 is estimated to reduce our GHG in the next decade by 30 percent.

That Valero Energy, the initiative's biggest funder, has one of the worst environmental records in the state should come as no surprise. Cleaning up its act by 2020 will not be easy on the bottom line. Proponents of Proposition 23 argue that such regulations as those called for by AB 32 would drive industry out of the state — resulting in lost jobs. Opponents counter that the evidence suggests the opposite: that not only is the job loss exaggerated but the gain in green jobs would more than make up the difference.

To us, such a negligible short-term move could have disastrous long-term consequences to California's environment and the health of its citizens — as well as its economic future in green technology, a particular interest of Silicon Valley.

Proposition 24: Yes

Repeals recent legislation that would allow businesses to lower their tax liability.

The Tax Fairness Act, as it's called by its supporters, is a response to a deal cut during the 2008-09 budget impasse in order to win enough Republican votes to pass a state budget. The deal did three things: It increased the flexibility with which companies can use net-operating losses to reduce taxes; it allowed for multi-state businesses to determine their California taxes based solely on sales in the state (previously, sales, payroll and property value were all factors); and it allowed unitary groups to transfer tax credits amongst the separate businesses within the group. Essentially, all three provisions result in lower taxes for large companies operating in the state — all to the tune, according to the Legislative Analyst, of $1.3 billion a year when the new rules are fully implemented in 2012. Proposition 24 proponents argue that the deal should never have taken place to begin with and that by repealing the legislation $1.3 billion would go back into the state's general fund (and under Proposition 98 guidelines, a significant part of that would go toward education).

Opponents of a repeal of the tax breaks say there would be significant job losses if multi-state businesses went back to being taxed according to payroll (meaning there would be an incentive not to have a lot of employees in California).

Proposition 24 will meaningfully affect, according to supporters, less than 2 percent of the wealthiest multi-state corporations operating in California. It doesn't call for new or higher taxes on these companies; it calls for a repeal of so-called "loopholes" that haven't even fully gone into effect.

Proposition 25: Yes

Changes legislative vote requirement to pass budget and budget-related legislation from two-thirds to a simple majority.

Only Arkansas, Rhode Island and California ask for a two-thirds vote by state legislatures to pass budgets. All other 47 states require simple majorities.

Currently a two-thirds vote is needed to pass the state budget, and to raise taxes. Proposition 25 would change the budget-approval requirement to 50 percent plus one; it would not change the two-thirds needed to raise taxes. A two-thirds vote is an arbitrary number to weigh so heavily on the workings of any state. Why not 57 percent? Why not 61 percent? It tends to be high enough to make sure small minorities can keep practically anything from getting done. There's an argument that a simple majority gives too much power to the political party in the majority — perhaps 55 percent is a better number that would require an inkling of bipartisan support. Maybe. What we do know is that anything lower than two-thirds would be an improvement at this point.

Proposition 26: No

Requires certain state and local regulatory fees be approved by two-thirds vote.

Proposition 26 looks to further the two-thirds-approval concept by requiring 66.6 percent of the Legislature or local voters give a thumbs up before the certain regulatory fees can be exacted to make up for the social costs of their businesses. Currently, these types of fees are not considered revenue-generating taxes (and therefore are not subject to two-thirds voter approval) because they're seen as an offset to the societal cost of a company — think of hazardous-materials fees being levied on a power company, with that money being used by the state to clean up toxic-waste sites and promote pollution prevention.

Chevron, Exxon Mobil and Phillip Morris are all big donors to Proposition 26. They and other heavy polluters would save a lot of money if it passes. The Legislative Analyst estimates that over years it would result in the loss of billions of dollars to California taxpayers who would then be footing the bill to clean up the polluters' messes.

Proposition 27: No

(See write-up above under Proposition 20.)

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