The November 2016 Ballot Measures – Part 1 – Statewide Measures

October 18, 2016

This is the first of several posts I’m going to do on the November general election.  There’s too much on the ballot to put it all in one, or even two posts.  Just in terms of statewide ballot measures, there are seventeen of them.  That may not be a record, (The most in recent history was 20 in November of 2000) but it’s still a lot to get your arms around.

My starting point in commenting on them will be the recommendation of the Courage Campaign, a generally “Progressive left”membership group in California.  (Membership is defined loosely – no dues or anything, just a willingness to call yourself a member and participate in occasional lobbying efforts and membership poll.)  They polled their members and came up with a set of recommendations on the measures.  I don’t always agree with them, but it’s as good a place to start as any (and probably better than either the official Republican or Democratic Party positions).  In case you’re wondering what other groups’ opinions are, the Courage Campaign has put together a compilation of recommendations.  Here‘s the link to it.

Here goes:

Proposition 51 – $9 billion bond to fix and upgrade CA school facilities — Courage’s position: Neutral.  My position, Oppose.  I have become more and more skeptical of bond measure as I’ve seen more and more of them get twisted out of shape from what the voters are promised.  The state constitution requires that bonds be spent on what the voters approved, but the courts have been notably lax in enforcing those requirements, so I have become much less trusting.  In this case, however, there are other problems as well.  The $9 billion dollars is to be given out on a “first come-first served” basis, which will tend to favor the well-financed and well-organized (i.e., wealthy) districts who can get their applications in quickly.  The measure doesn’t prioritize poorer districts or those with more pressing capital needs (e.g., districts with older, earthquake vulnerable building or with overcrowded facilities).  The measure also take pressure off developers to pay for the schools needed to service big residential projects they build.  They are making the profits; they ought to pay for the public improvements those projects require.
Proposition 52 – Make Hospital Fee Permanent to Pay for Healthcare Services — Courage’s position: Neutral.  My position, Support.  While ideally we ought to have a single-payer system where everyone gets the healthcare they need and we all pay for it collectively through taxes.  (Clinton and Trump both reject single-payer, but what do you expect of candidates raking in donations from the healthcare, pharmaceutical, and private insurance industries.)  Given that we aren’t going to single-payer any time soon, at least this will make sure the neediest people in our society get at least some healthcare.  Yes, hospitals will pass on the fee to their users, but until we go to single payer, it’s probably the best we can do.
Proposition 53 – “Stop Right-Wing Millionaire from Blocking Infrastructure Projects” [Courage Campaign’s description, not mine]. Courage’s position –  Oppose.  My position –  Support. Big public project can bring with them big problems.  Nationally, there was Boston’s “big dig.”  Here in California, we’ve had the new Bay Bridge project and the BART to airport projects (Oakland & SF), all of which have had large cost overruns and questionable results.  (Both BART project have turned out to be big money losers.)  The main thing motivating this measure is Jerry Brown’s twin tunnel “peripheral tunnel” proposal for shipping more water south.  Because Southern California agencies would pick up most of the tab, this wouldn’t require a general obligation bond [which would already have to go on the ballot], but a revenue bond, which currently doesn’t require voter approval.  This measure would require voter approval for such measures if the involve over $2 billion.  Given the Legislature’s (and local agencies’) untrustworthiness,  this  seems to me to be a good idea.  Also, what happens if the revenue doesn’t cover the costs, or if one of the agencies promising to pay goes belly up.  Who do you think will end up picking up the tab?  Us, the California taxpayers.
Proposition 54 – 72-Hour Publication of Bills Prior to Vote — Courage’s position – Neutral.  My position – Support.  Particularly near the end of the legislative session, the Legislature now often resorts to so-called “gut and amend” measures, which take a bill that has already passed one house, removes all of its substance, and quickly replaces it with something entirely different.  Such “end of session” bills are notorious for being approved, with the connivance of the legislative (Democratic) leadership and the Governor, with little opportunity for public scrutiny or comment.  IMHO, this is really bad public policy, and in the past has resulted in some really bad bills.  Yes, this would slow down the legislative process, and might keep some measures from getting enacted, but that, to me, is not necessarily a bad thing.
Proposition 55 – Extend the Tax on the Wealthy to Fund Education and Healthcare — Courage’s position – Support. My position – Support.  This again is a stop-gap measure.  As Bernie Sanders said repeatedly in his campaign, we all benefit from making quality education available to all, and healthcare ought to be a right, not a privilege.  In almost all other developed countries, it is.  Why not here, because moneyed special interests control the legislative process, both in Congress and the Legislature.  This measure isn’t really what we need, but it’s better than the alternative of not having funding at all.

Proposition 56 – $2 per pack tobacco tax.  Courage’s position – Support.  My position – Support.  Opponents of this measure label it a “nanny tax” – government using its tax powers to force us to do “what’s best for us.”  If it’s approved by the voters, this won’t be government telling us what to do; it’ll be us deciding what WE want to do.  I sympathize with people who’ve been sucked into tobacco addiction; and there’s absolutely no question it’s an addiction, just as much as heroin or cocaine; and far more than marijuana.  Problem is, it’s a really harmful addiction, and we, as a society, end up picking up much of the tab for dealing with its harmful results – heart disease, emphysema, cancers of all sort – you name it and whatever harmful medical condition you think of is probably either caused by or worsened by tobacco use.  At least the proceeds of this tax will help somewhat pay for all those costs, as well as help pay for programs to get people to kick the habit.  Big tobacco, of course, opposes this.  I can’t think of a better reason to support it.

Proposition 57 – Reform California’s Broken Parole and Juvenile Trial System [Courage Campaign’s label].  Courage’s position – Support.  My position – Support.  You should read up on the details of this measure.  How things are run now is the sad legacy of twenty years of “tough on crime” ballot measures that have left our prisons overflowing  with inmates, destroyed many thousands of people’s lives, and haven’t really worked in terms of reducing crime.  Californians have had a schizophrenic attitude towards crime – on the one hand wanting to “correct” bad behavior and on the other wanting to punish it.  Even with pets, it’s become clear that punishment isn’t a good way to teach behavior.  People are much more intelligent than pets (at least mostly) and all punishment does is build resentment.  Prisons ought to be a last-resort place to put people that we can’t prevent from harming others any other way.  This measure was really forced on us by the federal courts’ acknowledging that  California’s current way of running its prisons – overcrowding them and focusing on punishment – violated the 8th Amendment’s prohibition on cruel and unusual punishments.  We’ve had to be dragged kicking and screaming to this measure, but at least we’re there.  Much more needs to be done before our criminal justice system begins to bear any relation to justice and recognize the realities of what we’ve learned about correction in the past hundred years.

Proposition 58 – Repeal the ban on bilingual education.  Courage’s position – Support.  My position – Support.  We’re finally undoing some of the mischief done by the over-simplistic and ideologically motivated ballot measures of the ’80s and ’90s.  Remember “English Only”?  Supposedly, bilingual education let non-english speakers go through school without learning english, and “immersion” in english would be “tough love.”  It didn’t work.  All it did was further reduce non-english speakers’ motivation for staying in school.  Without bilingual education, many non-english speakers will get no education.  How does that help us as a society?

Proposition 59 – Overturn Citizens United.  Courage’s position – Support.  My position – Support.  For any of you who may have been asleep for the past few years, “Citizens United” was the name of a U.S. Supreme Court case where the court, by a 5-4 majority, decided that 1) corporations had a right of free speech, and 2) donating money to political campaigns was equivalent to free speech and therefore could not be regulated.  Since then, corporate control of our government has mushroomed even beyond where it was before, with “dark money” political committees able to raise unlimited funds from corporate sources while those contributions were hidden from public disclosure.  Is it any wonder that our two major presidential candidates are both almost totally beholden to Wall Street and other big-money interests?  Unfortunately, this measure does little more than register whether California’s voters are unhappy with the current situation.  It remains to be seen how much California’s congressional delegation will pay to the results.

Proposition 60 – Mandatory Condom Use in Adult Films. Courage’s position – Neutral.  My position – Support.  This has been one of the more controversial measures on the ballot, because it deals with California’s huge porn movie industry.  There are two issues here: 1) should California outlaw unsafe sex in porn movies as a public health measure, and 2) should California stop porn movies from showing, and thereby glamorizing, unsafe sex?  My answer to both questions is yes.  We’ve known for more that 20 years that sex without condoms can spread sexually transmitted disease.  Maybe if people were all totally monogamous, and only had sex with one person – ever – condoms would only be needed for birth control (but isn’t that a good enough reason in itself?), but porn movies more often than not portray casual sex which is exactly where condoms are most needed.  Yes, it’s true we show lots of stupid human behavior in movies.  How about we eliminate one of the stupider ones?

Proposition 61 – drug price ceiling in California.  Courage’s position – Support.  My position – Support.  This measure would cap the price California pays for state-supported drug purchases (e.g., MediCal) to the price paid by the Federal VA, which negotiates prices with drug companies and does a very good job of it.  Short of going to single-payer [strange how that keeps popping up] this is another way to at least get some handle on reining in the explosive increases in prescription drug prices.  Not surprisingly, many mainstream organizations, like the Democratic Party, that get lots of money from the pharmaceutical industry, don’t support this measure.  Also not surprisingly, the Sanders campaign’s successor group, Our Revolution, does.  So do I, for the same reasons.

Proposition 62 – Repeal the Death Penalty.  Courage’s position – Support.  My Position – Support.  Here we go again.For some reason, Californians still seem to believe that the death penalty somehow makes sense.  Nevermind that study after study shows that it has virtually no deterrent effect, and that states and countries that have abolished the death penalties have no higher rate of what California calls capital crimes than states and countries that still execute people.To me, though, the most convincing argument is that juries are not 100% accurate.  We’ve seen over and over cases where someone was convicted and sentenced to death, only to discover years later that they didn’t do the crime they were accused of.  It’s bad enough when they’ve spent years in prison.  What do you do when they’ve already been executed.  Saying, “Oops, we’re sorry,” is so inadequate as to be criminal in itself.  If California wants to call itself a civilized state, it must eliminate the death penalty.  NOW.

Proposition 63 – Increased state controls on guns and ammunition.  Courage’s position – Support.  My position – Support.  I don’t care what the NRA says.  While guns, by themselves, don’t kill people (at least not usually), people with guns and ammunition do.  As has been pointed out innumerable times, when private citizens have more guns, the amount of gun violence goes up, not down.  In my humble opinion, the U.S. Supreme Court made one of its stupider decisions (other than Citizens United) when it decided the right to bear arms applied to individual private citizens.  Well, since we’re stuck with that (and Citizens United) for the time being, at least this makes private gun ownership a little bit safer for those of us who aren’t NRA fanatics.

Proposition 64 – Legalized Marijuana use.  Courage’s position – Support.  My position – Support.  OK, so marijuana isn’t a totally harmless drug.  If you’ve been smoking wed, your probably shouldn’t be driving a car, or operating machinery; but it’s no more dangerous than drinking alcohol, and a lot less dangerous (and addictive) than smoking cigarettes.  The prohibition on marijuana use is a hold-over from the days when the state was considered responsible for regulating private morality – along with prohibiting alcohol consumption on the Sabbath and prohibiting public displays of affection.  Folks, this is not Iran, and we don’t need to have the government regulating private morality and creating victimless crimes that get people thrown in prison.

Proposition 65 and 67 – plastic bag fee versus repeal of plastic bag prohibition.  Courage’s position – Oppose 65; Support 67.  My position – Oppose 65; Support 67.  Both these ballot measures are the result of the financial power of the plastic bag industry.  It circulated and qualified a referendum [Prop. 67] of the Legislature’s prohibition on disposable plastic bag use (like in supermarkets) and then qualified its own initiative measure that would allow them but put a fee on them to go into a state fund.  All you need think about is the huge island of plastic, much of it plastic bags, floating in the middle of the Pacific Ocean.  You can also think about the thousands of birds and sea creatures who die each year when they mistake plastic bags for sea creatures like jellyfish and choke on them.  also think about how much cleaner beaches and parks have gotten where disposable plastic bags have been eliminated.  We need to greatly reduce our use of plastic. Period.  It’s bad for the environment.  Yes, it’s regulating behavior, but so are many hundreds of laws that nobody complains about.  Regulating objectionable behavior is one thing government does.  Using plastic bags, unlike marijuana, isn’t victimless.  Ask a sea turtle that’s died from one.

Proposition 66 – Make the Death Penalty more “Efficient.”  Courage’s position – Oppose.  My position – Oppose.  As should be evident from my position of Proposition 62, I consider this proposition an embarrassing holdover from the years when Californian’s approach to crime was “lock ’em up” or “kill ’em.”  That approach didn’t work.  Making the death penalty more “efficient” – i.e., quicker to decide and carry out – will only increase the likelihood of mistakes.  I consider this measure little short of barbaric.  Hell, if we want to make the system more “efficient,” how about when someone’s accused of a crime, they’re immediately brought before a judge, who flips a coin.  Heads you’re innocent, tails you’re guilty.  That’s efficient, but it’s sure not justice.

 

Next post will deal with local ballot measures.  Third post will deal with candidate.

 


IRV and the Oakland Mayor’s Race

November 5, 2010

Instant Run-off Voting (IRV for short) has made a big difference in this year’s Oakland mayoral election, and it’s not over yet.  Under Oakland’s traditional primary -> run-off system, there would have been a primary election in June, with lots of money spent.  The two top candidates (in this case, Don Perata and Jean Quan) would then have faced off in a November run-off, with a lot more money being spent in that election.  Essentially, the election could well have boiled down to who was better at raising the huge amounts of money needed to fight two back-to-back electoral battles.  In the past, that’s usually meant that the candidate with better connections to big-money special interests wins.

(Parenthetically, in very old-style elections, there was no run-off.  The candidate with the plurality of votes cast won outright.  This led to people putting up phony candidates whose main purpose was to draw votes away from the prime opponent.  Having a run-off at least allowed a clean match-up of the top candidates.)

With IRV, only one election is held, but the voters get to pick more than one candidate.  (IRV is also called ranked choice voting.)  If there first choice gets knocked out of the running, their vote  transfers to their second choice, etc.  Thus, unless all the voter’s choices are eliminated, the voter’s voice still makes a difference.   Here’s how it played out in the Oakland mayoral election this year (the first time IRV was used in Oakland).

There were ten – yes, ten, count them – candidates in the elections.  Some of them were pretty minor and ran only token campaigns; others tried to run low-budget grassroots campaign — a very hard thing to do in a city of over 400,000 people.  Most observers acknowledged there were four “major” candidates with sufficient funds and supporters to run credible citywide campaigns — former state legislator Don Perata, city council members Jean Quan and Rebecca Kaplan, and professor and media pundit Joe Tuman.  Shown below are the preliminary results of the IRV calculus.  (The results are preliminary because several thousand absentee and provisional ballots remain to be tallied.)

IRV mayoral election results

How IRV chose Oakland's mayor

As you can see, the IRV procedure shifted votes from lower ranking to higher ranked candidates.  Significantly, however, the shift was nonrandom.  About two-thirds of Rebecca Kaplan’s votes shifted to Jean Quan when Kaplan was eliminated, while only about one-third went to Perata.  Even more striking (although smaller) was the shift from Green Party candidate Macleay.  Quan got almost half of his 1500 or so votes, while Perata only got a little more than fifty.  The unequal distribution of second and third choice votes allowed Quan to close the gap against Perata and eventually surpass his total.  One potentially important factor in the election was candidates’ recommendations about whom to vote for other than themselves.  Several candidates, notably Quan and Kaplan, urged their supporters to choose any other candidate except Perata as a second or third choice.  It appears many voters followed that advice.

Back when ranked choice voting was being debated, Perata, and several city council members who supported him, came out in opposition to IRV.  At this point, it’s pretty clear it was in his self-interest to do so.  If not for IRV elections, it’d almost certainly now be Mayor Perata, rather than Mayor Quan.


Ballot Measure Brain Teasers

November 3, 2010

Here’s a brain teaser for you — try to find a consistent frame of reference that makes sense of all the California ballot measure results from yesterday’s election.  It’s not easy.

Some parts fit together pretty well.  Propositions 22 and 26 are part of a consistent pattern of California voters asking government to keep its hands out of our wallets unless they ask nicely and we say yes.  Prop. 22 keeps state government (meaning the legislature) from taking money away from local jurisdictions to help balance the state budget.  It was sold as protecting local government resources.  As I noted in a previous post, the unmentioned major beneficiary will be redevelopment agencies.  I wonder why the no on 22 campaign didn’t play that up more.  I find it hard to believe, in between their taking money away from other local agencies and being able to exercise eminent domain to take property away from citizens, that voters have a warm spot in their heart for redevelopment agencies. [That’s not to say that they never do anything worthwhile.  To give them their due, for example, Emeryville’s redevelopment agency has had a big hand in transforming that city from truckyards and factories into a retail powerhouse.]  Prop. 26 also makes it harder for the state (or local agencies, for that matter) to collect money in the form of fees.  The complaint was that there were fees being created that were really taxes, and it was a subterfuge to get around Prop. 13 and Prop. 218’s voter approval requirements.  So now most fees will ALSO require a 2/3 popular vote.  The defeat of Prop. 21 also fits with the “keep your hand out of my friggin’ wallet” attitude of California voters.  Interestingly, for both this and Prop. 26, the Bay Area’s attitudes differed from the rest of the state’s.  Here’s a link to the voting map for prop 21 on the Secretary of State’s website:  http://vote.sos.ca.gov/maps/ballot-measures/21/  .  We in the Bay Area are apparently a bit more willing to pay the fare when it comes to government services.

This might all seem consistent, but at the same time voters also adopted Prop. 25, which eliminates the 2/3 majority requirement to pass the state budget.  Thus it’ll now be easier for the legislature to pass a budget, but harder for them to have it survive the laugh test of, “So where are you going to find the revenue to make this budget balance?”  Look for many more applications of smoke and mirrors to produce a “balanced” budget in the future.  Also look for the state budget deficit to continue to grow, since Californians seem to think they can have all the services they want without having to pay for them.

Props 20 and 27, like props 21,22, and 26, but unlike prop 25, also showed voters’ distrust of the legislature.  In 2008, the voters narrowly passed prop 11, taking legislative redistricting out of the (self-interested) hands  of the legislature and putting it into the hands of an independent “citizens’ commission”.  This year, the legislature tried to convince voters that they should reverse the decision.  No such luck.  In fact, the voters turned around and took congressional redistricting out of the legislature’s hands as well.  Perhaps, with the exception of prop 25, the theme might be that the legislature is not to be trusted with doing much of anything right.  Arguably, even prop 25 could be said to reflect that attitude.  i.e., “OK, you don’t seem to be able to handle passing a budget with a 2/3 majority.  We’ll make it easy for you — just get something out with a simple majority; and if you can’t handle that, we’ll take away your pay because you clearly aren’t earning it!”

Then we’ve got two “lifestyle” initiatives.  Prop 19, that would’ve legalized recreational marijuana use, and prop 23, which would have suspended the state’s global warming law. 

On the former, early polls seemed to show voter approval, but two things appeared to turn the tide.  First were a bunch of articles pointing to flaws in the initiative’s language that would result in litigation and unintended consequences.  Second was the U.S. Attorney General’s public announcement that he didn’t care what California did; he was still going to have MJ users, growers, sellers, etc. arrested and thrown in prison under federal narcotics laws.  This could, perhaps, have stirred up a states’ rights oriented state like Alaska or Mississippi to say, “Oh yeah?  We’ll see about that!  See you in court!”  But …  California is not a big states’ rights bastion, and with law enforcement groups up and down the state saying it was a bad idea, the voters apparently had second thoughts.

Prop 23 was a different story.  For one thing, Californians have long liked to think of themselves as being an environmentally conscious group.  After all, we have Yosemite, the redwoods, the sequoias, Lake Tahoe, etc.  We were also one of the first states to block offshore oil drilling after the big Santa Barbara oil spill, and Californians have bought more hybrid vehicles, not only in toto but on a per capita basis, than any other state.  So it only stands to reason that, having passed landmark legislation to try to curb global warming, Californians would not readily turn around and say, “Oops, we made a mistake.  Let’s put that law in the deep freeze for twenty years or so until it gets REALLY hot.”  It also didn’t help that it came out very early (thanks to California’s campaign finance disclosure laws) that almost all the money financing prop 23 was coming from out-of-state oil companies.  Hey, what the heck, they were in Oklahoma or inland areas of Texas.  It wasn’t their coastline that was going to disappear under water as sea levels rose.  Bottom line, Californians decided they didn’t believe the oil companies (who have, of course, tremendous credibility already — almost as good as Enron’s).

One thing that still leaves me scratching my head is that in spite of what appears to be a set of almost Tea Party-like attitudes  about government spending, Californians still elected an entire set of Democratic state office holders.  Like I said at the start of this post, sometimes it’s hard to come up with a consistent frame of reference for California voters.


Democratic Self-destruction

November 2, 2010

There will, of course, be pundits by the dozens attempting to dissect today’s election results.  Obviously, a large segment of the American public was not happy with the Democrats’ record over the past two years.  Obviously also, Obama’s mantra that the Republicans drove the economy into the ditch and now they’re complaining about us trying to pull it back out didn’t really wash (or, at least, not on a national level).  What went wrong? and can the Democrats do better over the next two years?

My personal opinion is that the Democrats’ majority in Congress was really a ticking time bomb that finally blew up today.  Ever since the 1992 election, Democrats have attempted to win over “red” states by running candidates who were slightly less conservative than their Republican opponents.  The tactic was at least somewhat successful, so the Democrats had, until today, nominally impressive majorities in both the House and Senate.  However, many of those nominally-Democratic seats were held by profoundly conservative people; people who had little use for the agenda of  more liberal Democrats, and voted at least as often with the Republicans, especially on key legislation.   As a result, given the unified opposition of the Republicans, Obama and the Democratic Congressional leadership were forced to repeatedly water down their legislative initiatives in order to capture enough votes in their own party to get the legislation passed.

It is, to my mind, only poetic justice that some of the victims in today’s rout of the Democratic party were the very conservative Democrats who were most effective in obstructing Obama’s legislative agenda.  Democrats like Blanche Lincoln lost, even though  they fought against Obama at almost every turn, because why would conservative red state voters choose someone who looked like a Republican when they could, instead, vote for someone who was a Republican?

Of course, with the shift in the House majority, we’re going to have, as in 1948 with Harry Truman’s presidential campaign, a “do-nothing” Congress.  While the Republicans will control the House, they will probably not gain control of the Senate.  More importantly, the Democrats will have sufficient reliable votes in the Senate to maintain a filibuster and block Republican legislation.  Even more importantly still, Republicans will have nowhere near enough votes in the House or Senate to override the vetoes that Obama will almost certainly use against any conservative legislation the Republicans might happen to be able to push through.

If the Republicans were inclined to look for bipartisan “deals”, they might still be able to put through a watered-down Republican program, as happened during Clinton’s second term on issues such as welfare and tax reform.  However, the Republicans have themselves been pushed to the right by their Tea Party wing.  As a result, I would expect no compromises and that almost no substantive legislation will make it into law over the next two years.

At that point, what happens next will depend on what the effects of a stalled legislative agenda are, and who gets blamed for it.  If Obama is lucky, the legislation he pushed through in the last two years will have some positive effects, enough that people will start looking back on the 2008-2010 years as a time when some good things happened.  Meanwhile, if, as most economists seem to predict, the U.S. economy remains in the doldrums until 2012, Obama may be able to blame that stalled economy on the “do-nothing Congress” and run a re-election campaign based on letting Obama be Obama again by giving him the Congress he needs to do something.

If, on the other hand, the economy recovers without any further help, that may bolster the Republicans’ argument that government intervention was unnecessary and support a push to further “unleash” American capitalism by electing an anti-regulation president — dare I say, like Sarah Palin.  While I’m not an economist, I find it hard to believe that a rudderless American economy will do anything but bob around helplessly for the next two years while other countries with more effective legislative programs steam on ahead.  However, only time will tell.


Election Day!!!

November 2, 2010

If you’re looking at this on November 2nd, you’re probably looking for advice on how to deal with your ballot.  I’ve put up several posts with my recommendations and comments.  (However, they won’t help you very much unless you vote in California.)  Please go down through my posts until you find those of interest to you.  They start below continue from there.  Here are links (in chronological order) if you want to get there fast.  The titles are mostly self-explanatory:

https://stuflash.wordpress.com/2010/09/11/first-comments-on-the-november-election-proposition-22/

https://stuflash.wordpress.com/2010/10/01/more-on-the-november-ballot/ — statewide ballot measures

https://stuflash.wordpress.com/2010/10/14/november-election-last-installment/ — candidate recommendations

https://stuflash.wordpress.com/2010/10/15/on-the-oakland-mayoral-race/

https://stuflash.wordpress.com/2010/10/15/thoughts-on-local-ballot-measures/


Thoughts on the Oakland Special Election

June 27, 2009

Yesterday, I got my absentee ballot in the mail.  That might not seem so special, except that here in Oakland, everyone is getting an absentee ballot in the mail.  This is the first time I can recall a mail-ballot-only municipal election.  (There have been, of course, numerous mail-only elections for assessment districts and the like.)  With the high and increasing cost of running elections, it’s probably the wave of the future.  In fact, while there will be no polling places open, the City has called a special election for July 21st.

As to the subject of the election itself, the City Council called this special election as a last-gasp effort to avoid truly draconian cuts in the Oakland city budget.  Even as it is, the City is looking eliminating maintenance for many city parks, cutting back or eliminating a number of city programs, and generally cutting back city services.

Part of this is the City’s own doing (e.g., the failure of the city council to maintain adequate oversight over Mayor Jerry Brown and his city administrator as they spent money the city didn’t really have), but much of it is the result of a “perfect storm” of outside factors.  Those factors include the dismal state of the local, state, and national economy (and associated drop in business tax and sales tax revenue), the precipitous drop in the Oakland real estate market, with consequent drop in property tax  and transfer tax revenue, the cutbacks in state contributions to local programs (hopefully to be partially offset by federal “stimulus” dollars), and, of course, the long-term impacts of Prop. 13.  Added to that is the self-inflicted wound that Oakland voters perpetrated last November by enacting the “Kids First II” measure, Measure OO, which funded non-city kids’ programs at the expense of the city budget.

The four measures on the ballot are the city council’s attempt to reduce the damage from Kids First II and cobble together some additional short-term revenue sources.  If these measures fail, even more drastic budget cuts are lurking in the shadows waiting to pounce.

What are the measures?  Measure C increases the City’s hotel tax from 11% to 14 % to fund cultural and educations institutions (including the Oakland Museum, Oakland Zoo, and Chabot Science Center), as well as the convention & visitors’ bureau, that are currently funded from the general fund.  It requires a 2/3 majority vote to pass.   If it fails, those institutions will probably lose their City funding, and some or all of them may be forced to close down.

Measure D would replace the Kids First II measure (Measure OO).  That measure dedicated a percentage of total city revenue to kids’ programs.  Measure D would change this to a percentage of unrestricted general fund revenues.  This makes far more sense, since restricted funds are locked into their uses and essentially are “untouchable”.  It requires only a majority vote (as did Measure OO).  If Measure D fails, Measure OO would remain in effect and the City would be forced to cut many other services in order to provide the mandated level of funding for (non-city) childrens’ programs.  Measure OO was, to put it bluntly, a stupid and poorly-written measure.  We shot ourselves in the foot by passing it.  We’ll be adding a second bullet hole if we don’t pass Measure D.

Measure F would increase the business tax on medical marijuana sold in the City from $1.20 per $1000 (0.12%) to $18 per $1000 (1.8%).  It’s a whopping increase, but the current tax is miniscule.  (Compare it to the roughly 10% sales tax on general merchandise!)  As a general tax, this would only require majority vote approval.  Taxing medical marijuana may not be the best way in the world to gain revenue (a city tax on cigarettes or alcohol would be far better), but it’s one of the few politically acceptable revenue sources that isn’t pre-empted by state or federal law.  Again, if this goes down to defeat, there will be even more programs cut from the city budget.

Bottom line — If you don’t mind dealing with humongous potholes in the streets, broken streetlamps that don’t get fixed, closed fire stations, and being put on permanent hold when you call 911, by all means vote these measures down.  It’ll be one more step towards reducing government services to the point where government can be “drowned in the bathtub.”

If, on the other hand, you’d like Oakland to be something other than the world’s biggest cesspool, I’d recommend a YES vote on these four measures.

Incidentally, here’s the Oakland League of Women Voters’ recommendations on the ballot measures.  Like me, they recommend a YES vote on all four:

http://www.lwvoakland.org/VOTER-June-2009.html#election

Don’t forget, you do need to mail your ballot in so that it’s received on or before July 21st.  (Unlike a tax return, just a postmark won’t do the trick.)


So Now What??

May 19, 2009

Predictably, California voters have emphatically turned town the compromise crafted between the governor, the Democratic legislative leadership, and a few pragmatic Republican legislators.  So now what?

Well, to begin with, what lessons have been learned?  The big one is — don’t compromise.  The voters don’t want compromise.  They prefer ideological purity.  Republicans voters went along with the Republican leadership that rejected the governor’s compromises because they involved new taxes as well as budget cuts.  Democratic voters voted down the measures because they weren’t willing to accept a budget cap or temporarily shift revenue from specially approved taxes to the general fund.

When the legislature goes back to trying to solve the budget deficit, there’s little doubt it’ll keep these lessons in mind.  That means there will be no compromises — and no budget.  That will put the ball squarely in the governor’s court, and his only option will be to make the kind of draconian cuts he’s been threatening — lay-offs, furloughs, and slashed programs.  Essentially anything that isn’t required by a federal mandate will be slashed.  In addition, the governor will as he has warned, attempt to “borrow” money from local governments.  (It’s not clear to me whether this part of his strategy would require legislative cooperation.  If so, I’d be willing to bet he won’t get it.)

Given that the governor will get little if any help from the legislature on these matters, there are limits to what he can do.  The question is it’ll be enough to forestall defaults on state bonds and lawsuits from state vendors over non-payment of their bills.   I wouldn’t bet on it.  [Maybe the state can’t go bankrupt, but lawsuits from angry vendors and bondholders could result in courts taking almost as much power over state finances as a bankruptcy court would have.]  I think we can look forward to a year in which few businesses will want to do business with the state, and nobody will want to buy state bonds.

Without bond funding, even more programs will have to be cut.  Between that and lay-offs, look for unemployment to rise even more — maybe to levels not seen since the great depression.  This summer doesn’t look to be a good time for the Golden State.


Endorsement Update

May 18, 2009

A few more ballot measure endorsements, for those keeping score. Obviously, the Governor has endorsed all seven ballot measures, as has the state Democratic Party leadership, including AG (and gubernatorial candidate) Jerry Brown. The Democratic Party itself, however, has taken no position. At its convention last month, while a majority of delegates voted to support some of the measures, no measure reached the 60% threshold for endorsement. The Republican Party, showing no such reluctance, has endorsed a NO vote on all the measures, as have Republican gubernatorial candidates Meg Whitman and Steve Poisner. Rival Republican candidate Tom Campbell has taken a more nuanced stance, supporting 1A, 1D, and 1E, but opposing the remainder. California’s two Democratic senators, Boxer and Feinstein, have endorsed all seven measures, although Feinstein qualified her endorsement, calling it a Hobson’s Choice (i.e., a choice offering no good alternative).


Columnist Dan Weintraub on the Special Election.

May 16, 2009

Here’s Daniel Weintraub of the Sacramento Bee’s latest take on the ballot measures.  Actually, he’s just recounting comments of a “friend” who’s voting no on all the measures.  Bottom line –sometimes you have to tear down a house before you can rebuild it.  I wonder what it’ll be like for Californians to live in the debris of a torn-down state for several years while we figure out how to build our new structure?

http://www.sacbee.com/opinion/story/1856206.html


The Market Implications of the California Special Election

May 7, 2009

I’ve been somewhat of a broken record stuck on discussing the May 19th special election here in California; but, after all, it is fast approaching.  One topic I haven’t touched upon yet, though, is the implications of the election for the financial markets.

Obviously, California doesn’t really have its own financial markets.  There isn’t even a Pacific Stack Exchange any more.  So, if the special election is going to have an impact, it’ll be on Wall Street and the national markets.  That doesn’t however, mean it will be ignored.

Right now, I’ve seen little if any discussion in the national financial press about the implications of the California election.  That doesn’t, however, mean it won’t have any.  If anything, it means the effects of the election will be felt even more strongly because they won’t have been anticipated and taken into account beforehand.

What will those effects be?  If, by some miraculous turn of events, most of the ballot measures pass (I’m ignoring Prop. 1F, which will have zero effect on financial markets [or almost anything else]), the effect would be positive.  It would send a message that California’s financial mess, while not totally solved, is at least being addressed and taken seriously.  What, however, about the more likely outcome?  What if most or all of the measures go down in flames?

I think the effects will be dramatic and negative.  The Governor is already raising the threat of major budget cuts, as well as poaching from cities’ and counties’ property tax proceeds (see, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/07/BAPC17FU69.DTL&type=politics).  While the legislative leadership has been noncommital on specifics, it doesn’t seem the Democrats will have the stomach for another long and draining budget stand-off; especially when their last compromise solution was rejected by the voters.  The Republicans, on the other hand, will feel vindicated and strengthened by the elections results.  They’ve already indicated that they intend to push for even more and deeper cuts when/if the budget comes back to them post-election.

I can see one of two results; and neither would be good news for financial markets.  The first would be that a new, even more austere state budget gets approved — one not dependent on voter approvals.  That would mean the balancing would happen through cuts alone.  Look for major lay-offs of state employees — especially union employees, wage cuts for all employees not protected by a union contract, further drastic cuts in allocations for social services and education, and a grab for local property and sales tax revenue.  The misery would then trickle down to the local level, with major lay-offs of teachers and municipal employees and more than a few bankruptcies for vulnerable cities and counties.  (Vallejo, already in bankruptcy, might actually have to “disincorporate”, whihc, in turn, might drive Solano County into bankruptcy.)  The California municipal bond market would, needless to say, take an enormous hit.

In the alternative, the Democrats might stick to their guns, resulting in another budget impasse.  However, this time I don’t see a compromise forthcoming.  Those few Republicans leaders who might have been open to compromise have been removed form the party leadership, and those Republicans who supported the last compromised are already being threatened with retribution at the next election. 

If no compromise is reached, state bankruptcy could well be the end result.  That would, of course, have major repercussions in the financial markets.  Just for starters, the state’s huge bonded indebtedness would be put at risk.  At the very least state bonds would start to go into default on their interest payments.  The price of California bonds would plummet, and it would be a practical impossibility for California to issue any new bonds. 

My assumption would be that a federal judge would be assigned to preside over California’s financial restructuring.  As with Vallejo, all labor contracts (and other contracts as well) would be subject to being restructured or even voided.  Since a court couldn’t order any new taxes, the judge would have to order the same kind of drastic budget cuts the legislature would have faced; but a judge could ignore the protection of labor contracts.  Expect major cuts in the wages of state employees, as well a a huge wave of lay-offs in all state agencies.  Any expenditures not mandated by federal law would be subject to being reduced or eliminated.

One effect of all this would be that California’s unemployment rate would explode, hitting levels not seen since the Great Depression.  In fact, sad to say, I think there’s a (in)decent likelihood that the special election results and their repercussions might be enough to convert the “Great Recession” into a true depression, unless Obama can scrounge together enough federal funding to step in and save the day.  Even Obama, Superman cape and all, isn’t likely to be able to do that.

So go ahead, vote against all the ballot measures.  What the heck.  When have Californians ever thought much about the implications of their votes?  After all, we elected Ronnie Reagan governor — twice!


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