California voters could overhaul the state and local tax system, as well as the state budgeting process, in November. Ballot initiatives that would constrict state and local government funding, and, conversely, dramatically increase state and local government revenues are in circulation for signatures.

In addition, a ballot measure backed by conservative lawmakers that would suspend AB 32 (the Global Warming Solutions Act of 2006) until the unemployment rate drops to 5.5% for a year is in circulation. Also proposed in late January was an initiative that would permit only the attorney general's office – and not citizens – to challenge environmental impact reports.

As of February 2, two dozen initiatives related to state and local revenues or the state budget had been cleared for circulation by the secretary of state's office. Included in that total are redundancies, as ballot measure proponents often submit multiple versions of an initiative before settling on one. Although none of the measures has yet qualified for the ballot, it appears likely voters will decide some weighty tax and spending measures with definite ramifications for planning and development.

"We certainly have the potential for a whole lot of issues to be decided by voters this year," said Cheryl Katz, co-author of The Coming Age of Direct Democracy and vice president of the polling firm Baldassare Associates. "In California it's still the most successful model because of the difficulty of getting the gridlocked Legislature to act."

The number of initiatives in circulation for signatures varies almost daily as advocates submit new proposals, the attorney general's office prepares ballot titles and summaries, the secretary of state's office completes its ministerial review, and deadlines for gathering signatures pass. As of February 3, 74 proposed initiatives were in circulation and another 15 were in the attorney general's office for awaiting title and summary. Those numbers are considerable, but they are not records, according to a secretary of state's office spokeswoman.

What is certain is that at least five measures will appear on the June primary ballot. Proposition 13 would exclude seismic retrofits from new valuation for tax purposes; Proposition 14 would create open primaries; Proposition 15 would provide for publicly funded campaigns; Proposition 16 would require two-thirds voter approval to expand or create public electricity service; Proposition 17 concerns automobile insurance. Although the deadline for citizen initiatives for the June ballot was January 28, lawmakers could still place measures on the ballot. Gov. Schwarzenegger has talked about getting state budgeting measures on the June ballot, including a plan that would ensure the state spends more on universities than prisons.

Despite the initiatives that are in circulation, John Matsusaka, president of the University of Southern California's Initiative & Referendum Institute, contended the state is actually "in a somewhat slow period" for tax measures.

"It is not well understood what causes the number of ballot propositions to fluctuate over time, but part of it has to do with the degree of popular dissatisfaction with elected officials. Voters turn to initiatives and referendums when they don't think the Legislature is doing its job," Matsusaka said.

If Matsusaka is correct, the system should be flooded with initiatives, as a Public Policy Institute of California survey released in late January found the state Legislature's approval rate at only 18% and the governor's at 30%. That same poll found that 84% of respondents favor major or minor changes to the state and local tax systems, with 72% saying voters – not elected leaders – should decide what those changes are. But the poll also found that vast majorities do not know how the state government is funded or what it spends most of its money on.

Among the proposed initiatives in circulation:

• Several measures proposed by Republican lobbyist and activist Thomas Hiltachk that would alter how the state calculates funding for schools, community colleges and transportation. Among other things, the measures would increase the amount of money spent on debt retirement, according to the official analysis.

• A measure from the California Chamber of Commerce that would extend voter approval requirements to more local levies and charges, and require two-thirds approval in the Legislature for anything that increases taxes.

• A measure by the Howard Jarvis Taxpayers Association that would prohibit the Legislature from raising any taxes without voter approval. Republican operatives Steve Lucas and Josiah Keane have proposed a similar measure.

• A measure from Democratic operatives Remcho, Johansen & Purcell that would permit local government entities to seek majority voter approval for a 1-cent sales tax increase to implement a "countywide strategic plan" that "increases efficiency and improves the outcomes of local services." The measure would also prohibit the state from borrowing or appropriating any local government, redevelopment and local transportation revenues.

• A separate Remcho measure that would permit the Legislature to approve a state budget with a majority vote, eliminating the two-thirds approval requirement. The measure also calls for two-year budgets and prohibits lawmakers from creating new expenditures of more than $25 million unless the offsetting revenues or spending cuts are identified.

• A Remcho measure that would increase commercial, nonagricultural property taxes to 1.55% of valuation, with the additional estimated $4 billion going to K-12 schools, community colleges and state universities.

• A Remcho measure that would implement the long-discussed "split roll" by requiring that commercial property be reassessed at fair market value at least once every three years, with 90% of the estimated $3.4 billion in new revenue directed to the state's general fund.

•  A Remcho proposal to lower the vote requirement on local infrastructure bonds from two-thirds to 55%.

• Measures from the Bay Area Council business organization that would permit voters to call for a state constitutional convention and to actually convene a convention.

• A measure from local government and transit organizations that would bar the state from taking any local funds used for local government services, redevelopment projects, or transportation projects and services.

• A measure backed by environmental groups to increase state vehicle license fees by $18, with the $500 million of revenue going to state parks.

• A proposal that would reduce the Legislature's session to no more than 95 days per year and cut lawmakers' salaries by at least half.

Cleared for signatures on February 3, the climate change ballot measure seeks to reverse state policy spearheaded by Schwarzenegger. The "California Jobs Initiative," is backed by the Assembly Republican Caucus and U.S. Rep. Tom McClintock (R-Elk Grove) and would suspend AB 32 until the unemployment rate, now at about 12.5%, drops to 5.5% for four consecutive quarters. Approval of the initiative would likely also force suspension of SB 375, the 2008 measure that calls for regional transportation and land use planning to reduce greenhouse gas emissions.

"It's easy to be green when you've got food on the table," Assemblyman Bill Berryhill (R-Ceres) told the Modesto Bee. "Most of these things were passed in good times. We're in a different time now."

The California Environmental Quality Act (CEQA) measure awaiting review in the attorney general's office comes from Orange County developer Timothy Strader Sr., chairman of Starpointe Ventures. The measure would amend CEQA to prohibit citizen enforcement of the law.

"Giving the attorney general of California the exclusive right to challenge certified EIRs will put an end to hundreds of frivolous lawsuits, which stall job creation and drive up housing prices for California families," the measure's preamble declares. The measure would also prohibit even the attorney general from challenging an EIR based on climate change or greenhouse gas emissions.

Already on the November ballot is an $11.1 billion water bond that was part of a water legislation package approved last fall (see CP&DR, November 15, 2009).

Baldassare Associates' Katz said she has not yet done polling on any specific measures, so it is difficult to tell which measures will gain political traction. In general, measures that appeal to populist sentiment fare well, she said. June 24 is the deadline to qualify a citizen initiative for the November election.


Contacts:
John Matsusaka, USC Initiative and Referendum Institute, (213) 740-6495.
Cheryl Katz, Baldassare Associate, (510) 701-5758.
Public Policy Institute of California survey: www.ppic.org/main/publication.asp?i=924.
Secretary of State's ballot measures update: www.sos.ca.gov/elections/elections_j.htm.