Pete Rates the Propositions
Sensible opinions on the California ballot propositions      since 1980      by Pete Stahl

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Pete Rates the Propositions
November 2004

Pete recommends:
1A   YES   Making it Harder for the State to Grab Local Taxes
59   YES   Sunshine Law
60   NO   Preservation of Partisan Elections
60A   NO   Sad, Sad Orphan Proposition
61   NO   $750 Million Private Children's Hospital Bonds
62   YES   Elimination of Partisan Elections
63   NO   Tax on Income Over $1 Million for Mental Health Services
64   NO   Weakening Unfair Business Competition Laws
65   NO   Another Sad Orphan Proposition
66   YES   Requiring Third Strike to be a Violent or Serious Felony
67   NO   Tax on Phone Bills for Emergency Medical Services
68   NO   Orphan No. 3: Racetrack & Card Room Casinos
69   NO   DNA Database
70   NO   Tribal Gaming: Agua Caliente Band's Scheme
71   YES   $3 Billion Stem Cell Research Bonds
72   YES   Requiring Employers of 20 or More to Provide Health Care Benefits


Proposition 1A: Making it Harder for the State to Grab Local Taxes – YES

Back in the olden days, local governments levied their own property taxes, which went directly into their local budgets. Then the famous Prop 13 of 1978 chopped property taxes down to 1% of assessed value, and gave authority for property tax distribution to the state.

This has led to no end of elaborate shell games. The state has shifted property tax revenues from schools to cities and counties, backfilling the schools' budgets with General Fund money. It has shifted property taxes back to schools and community colleges, backfilling cities and counties with revenue from a half-cent sales tax hike. It has reduced the Vehicle License Fee paid to cities and counties, and backfilled from the General Fund. Two years ago, it even executed the rare and difficult "triple-flip" maneuver, shifting city/county sales taxes to the state, backfilling from K-14 education property taxes, and re-backfilling from the General Fund. (The French judge gave the state a 4.4.)

Every summer, cities, counties, community college and school districts have to hold their collective breath while the state hammers out its budget, wondering what bizarre accounting gimmicks Sacramento will use this time. It's a huge strain for local financial staff to scramble to adjust to the (always late) state budget, and it makes reliable long-term planning almost impossible.

In most years the local entities receive roughly what they expect. But occasionally the state has given them the shaft. In 1992 and 1993, for instance, cities, counties and special districts were seriously underfunded. This meant libraries closing and police and firefighter layoffs.

Last January Gov. Schwarzenegger, facing a truly gargantuan deficit, proposed underfunding cities, counties and special districts once again, by $1.3 billion a year for the next two fiscal years. The local governments decided not to take it lying down. They qualified an initiative to prevent any more shenanigans with local funding. Their initiative became Prop 65 on this ballot. If passed, Prop 65 would force the state to fund localities fully, leaving a $1.3 billion hole in Arnold's next two budgets.

Did Arnold panic? No. He knew he could use his considerable charm and clout to defeat Prop 65. This prospect frightened the localities. So in May they sat down with the Governor and negotiated a compromise. They could have their shell-game prohibition if they just waited two years. The Governor's budgets would balance, and the localities would eventually get what they wanted. The cities and counties would drop their support for budget-busting Prop 65, and Arnold would throw his weight behind the new ballot proposition. Deal.

The new proposition is Prop 1A, given a funny number so it can be pick up more "yes" votes at the head of the ballot. (Apparently voters start out optimistic and grow crankier as they go.) If Prop 1A passes, after the next two budgets the state will be required to restore full shares of tax revenues to cities, counties and special districts, forever. This includes property taxes, sales taxes, and the Vehicle License Fee. I won't get into specifics because it's too damn complicated, but if you're interested there's an excellent piece by the California Budget Project.

The only cogent argument I've seen against Prop 1A is in a recent Sacramento Bee editorial. It goes like this: By guaranteeing local governments a slice of the sales tax, Prop 1A perpetuates an unhealthy emphasis on businesses that generate sales taxes (like big-box stores), when it should instead be on parks, homes, and other things that make our neighborhoods livable. Maybe so, but that would be the case regardless of whether Prop 1A passes. As I like to say, you should vote on a ballot measure based on what it will do, not what it won't. It's important to have our cities and counties fully and predictably funded. We can tackle incentives to Wal-Martize California later.



Proposition 59: Sunshine Law – YES

Prop 59 adds to the state Constitution a guarantee that meetings of public bodies and writings of public officials and agencies be open to public scrutiny. This is all motherhood and apple pie. We already have lots of statutes to the same effect, with names like the Brown Act, Bagley-Keene and Grunsky-Burton.

What's key to Prop 59 is the requirement that these laws be broadly interpreted to further the people's right to information. This will prevent situations like the recent one in my town, where a lawsuit alleging an illegal closed meeting of the city council was lost because the court, narrowly interpreting the law, would not let the plaintiff even ask what the meeting was about. The plaintiff later authored the official argument against Prop 59. There's irony in there somewhere, I'm pretty sure.



Proposition 60: Preservation of Partisan Elections – NO

Political parties of all sizes are terrified by the prospect of having their nominees left off November ballots, as could happen if Prop 62 passes. So in a monumentally inept display of bipartisan cooperation, the Democratic and Republican parties have launched Prop 60, an anti-Prop 62 torpedo. Prop 60 adds a guarantee to the State Constitution that all parties' nominees will appear on general election ballots.

For practical purposes, Prop 60 will do nothing; it simply writes the status quo in stronger language. The only scenario under which passage of Prop 60 would matter—both Props 60 and 62 winning a majority—is laughably unlikely. On the order of, say, the Chargers and 49ers both reaching the Super Bowl this season.

There is no reason to vote for Prop 60. If you want all parties' nominees to appear on general election ballots, simply vote against Prop 62. Prop 60 won't make one bit of difference.



Proposition 60A: Sad, Sad Orphan Proposition – NO

Poor Prop 60A. Nobody loves Prop 60A.

The authors of Prop 60, thinking a partisan primary wouldn't be sexy enough to win their measure's passage, duct taped onto it some nice-sounding but meaningless drivel that purported to help solve the state's ongoing budget crisis. This so obviously violated the "single-subject" rule for ballot propositions, however, that a judge cleaved Prop 60 in two: the original party guarantee (Prop 60) and the budget gobbledygook (Prop 60A).

For the record, Prop 60A would apply any money the state happens to make from selling surplus property to the $15 billion Economic Recovery bonds we passed in March (Prop 57). Such surplus property sales average about $30 million a year. You can imagine the kind of dent this will put in those $15 billion bonds. Why, in a mere 500 years we could pay off the bonds completely! (Well, at least the principal.)

Prop 60A is the ass end of the equally unnecessary Prop 60, lopped off by a judge, unloved and utterly forlorn. As pathetic as it is, like an abandoned kitten meowing in the rain, don't be tempted to support it. You'll only encourage more stupid ballot measures. Just let it fade into well-deserved obscurity.



Proposition 61: $750 Million Private Children's Hospital Bonds – NO

Please see My Semi-Biennial Lecture on Bonds for my opinion on bonds in general.

What?! Really?? How can I possibly be against helping sick and injured children? What kind of heartless monster am I?

Let's back up and get a little perspective. Prop 61 will provide $750 million for renovation and expansion of children's hospitals throughout the state. These hospitals serve millions of sick and injured kids, and have not been able to keep up with the growth in our child population. The Children's Hospital and Health Care Center in San Diego, for example, has had to handle 65,000 emergency visits a year in a facility designed for 25,000. There's no dispute about the need for larger and better children's hospitals.

Unlike state mental hospitals and county general hospitals, which are all government-run, children's hospitals in our state are privately owned and operated (except for five affiliated with University of California medical schools). And that's where the doubt about Prop 61 creeps in.

In my Semi-Biennial Lecture on Bonds, I assert that bonds are the appropriate way for the state to fund tangible acquisitions that will be used far into the future. Prop 61, however, specifies that 80% of its proceeds, or $600 million, be donated to private hospitals. Usually when the state issues bonds, it can expect in return a school, a bridge, or a sewage treatment plant. What will the state get for that $600 million in Prop 61? Nada. Any new construction becomes property of the private children's hospitals.

This is simply inappropriate use of our tax dollars. If California is going to spend $50 million a year for 30 years, as it will under Prop 61, I want the state to have something to show for it. The private 80% of Prop 61 will buy the state nothing.

To be sure, private children's hospitals are tremendously beneficial. They perform miracles daily. Yet so do other private institutions, such as churches, private schools, and the Salvation Army, and it would be inappropriate for the state to fund their expansion. So why should children's hospitals receive special treatment?

In fact, many of the arguments against school vouchers apply here. One of the major recipients of Prop 61 funds will likely be Loma Linda University Children's Hospital, a Seventh-Day Adventist facility with a mission of "Innovating excellence in Christ-centered health care." Such hospitals have religious objections to unionization of workers, and are reported to limit access to abortion, contraception and AIDS-related information and services. We don't allow public funding of private schools that prohibit unions and the teaching of evolution, so why should we fund private hospitals that do essentially the same thing?

The private, non-profit corporations that run these hospitals are not shy about supporting Prop 61. And why should they be? Their return on investment will be huge. Packard Children's Hospital in Palo Alto has given nearly half a million dollars, and the children's hospitals in Oakland, Madera, Los Angeles, and Orange County are in for $350,000 apiece. Loma Linda has ponied up $125,000. The grants these hospitals will receive in return will be as high as $75 million. That's a sweet 20,000% ROI, for those of you into accounting.

I hate to characterize Prop 61 as a "buy-a-law", because the private institutions that stand to profit are so beneficial to the state. But in essence, Prop 61 asks the state to fund private entities with public money. I have real trouble endorsing a measure that gives so much long-term, interest-burdened money irrevocably to private institutions.



Proposition 62: Elimination of Partisan Elections – YES

In 1996 voters passed Prop 198, ushering in the era of Open Primaries. In an Open Primary, any voter could vote for a candidate of any party; the top vote-getter in each party advanced to the general election. The era lasted from 1998 until 2000, when the scheme was declared unconstitutional. Now we have plain, old-fashioned, partisan primary elections, in which voters vote only for candidates of their own parties.

Prop 62 will institute a new kind of primary election. Like Open Primaries, everyone's primary ballot will list candidates from all parties (and also independents). Like Open Primaries, voters can vote for any candidate, regardless of the candidate's party. But here's the twist: Under Prop 62, only the two top vote-getters, regardless of party, will advance to the general election. In most cases these will be a Democrat and a Republican. But in some races they may be a Democrat and an independent (and no Republican), or perhaps two Republicans (and no one else). It will all depend on who the top two finishers are.

What's the point? Why eliminate the third-place and lower finishers? Why leave Greens, Libertarians and other third parties off the general election ballot?

The point is to give moderate candidates a shot at winning. Under the current system, moderates are at a huge disadvantage. Partisan primaries aren't about who's the better candidate for California. Instead, they're about who's the more loyal party member. Think about it this way: 35% of California voters are registered Republican. If as little of 18% of the electorate is solidly conservative, they form a majority within the party and can steer all of the party's nominees hard to the right. Similarly for the Democrats: with 43% registration, a 22% liberal core can steer nominations to the left. If 40% of the electorate (18% conservative Republican + 22% liberal Democratic) can control both major party nominations, what about the other 60% of us? Sorry.

The current system selects for partisanship above all other considerations, resulting in highly partisan elected officials incapable of working with the other side of the aisle. We see obstructionism, intransigence and budget gridlock. It's frustrating for everyone.

What would happen if partisan primaries were removed, as Prop 62 proposes? Hey, remember last year's recall? There was no primary; it was winner take all. A professed moderate, Arnold Schwarzenegger, handily defeated "establishment" candidates from both major parties.

Would Schwarzenegger have survived a partisan Republican primary? It's doubtful. Conservative Republican Tom McClintock actually got more votes in last October's recall than conservative Bill Simon received in the 2002 Republican primary, when he beat moderate Richard Riordan. Assuming virtually all of McClintock's votes were from Republicans, Schwarzenegger would've been toast in a Republicans-only primary. Partisan primaries are poison to moderates.

So far I've been talking about statewide offices, like Governor, Treasurer, and U. S. Senator. Prop 62 would also apply to legislative districts, such as State Senate, Assembly and U. S. Congress. What will be the effect of Prop 62 there?

Due to massive gerrymandering, legislative districts are essentially one-party fiefdoms. Prop 62 cannot help a Republican in a Democratic district, or vice-versa. But Prop 62 will give moderate legislative candidates traction against polarized incumbents from their own party.

Imagine, for example, a Congressional district with 53% Republican, 27% Democratic, and 20% independent/minor party registration. The district is, of course, represented by a far-right conservative Republican. A moderate Republican enters the primary, hoping to unseat the Neanderthal and restore bipartisan dialog to Capitol Hill. Without Prop 62 the moderate is obviously doomed; he'll never get a majority of the Republican primary vote. But with Prop 62 he has a good chance, even if the Democrats have a strong candidate in the primary.

Don't believe me? Let's do the math. Give Rep. Neanderthal 40% of the primary vote, all Republican, leaving Mr. Moderate 13% from the Republican column. If independent voters (20%) go for Mr. Moderate too, he'll have 33%, good for second place and a spot on the November ballot. Under Prop 62, the Democrats, with their paltry 27% registration, are shut out.

So the contest in November pits moderate and conservative Republicans. Democratic voters (27%) are forced to choose Mr. Moderate as the lesser of two evils. Combine this with the 33% Republican/independent vote that nominated him, and he's got 60%: a crushing, twenty-point victory over the incumbent. District Democrats are secretly delighted to get rid of Rep. Neanderthal, and there's even a small chance Mr. Moderate will work to improve the political climate in Washington.

In fairness I should point out that a free-for-all in one party could cause it real problems. In a statewide contest such as Governor, for example, if three or more Democrats split the primary vote, they could all be left off the November ballot should two Republicans poll higher. I'm betting partisan candidates will exercise enough discipline to prevent this from happening, though. No serious politician wants to become California's version of Ralph Nader, allowing a quixotic personal quest to result in the election of the candidate farthest from himself.

Will Prop 62 make political parties obsolete? Of course not. The parties will continue with their familiar agendas and constituencies. A procedural measure like Prop 62 could not make these magically disappear, even if that were desirable. Nor will Prop 62 affect the egregious gerrymandering of legislative districts. What it will do is inject some relevance into primary elections. Instead of conceding the decision of who appears on November ballots to the left and right wings of the major parties, everyone can play. We might end up with elected officials who represent more than just the outer wings of their parties. I think that will be very refreshing.



Proposition 63: Tax on Income Over $1 Million for Mental Health Services – NO

We need a new top-tier income tax bracket. California's income tax system isn't progressive enough. Let's ask those with incomes over $1 million to pay more of their fair share.

Prop 63 would do exactly that. It would add 1% to the top tax bracket, bringing the rate to 10.3% on the second million. Someone earning $1.5 million in a year would pay an additional $5,000. Would this pose a severe hardship? All together now: "Naaaah."

If this were as far as Prop 63 went, I'd be happy to recommend it. But Prop 63 goes a step farther. It specifies how to spend the new income. As my regular readers know, I'm allergic to budget set-asides like this. Prop 98 (1988) requires the state to spend $47 billion a year on education. Prop 42 (Mar. 2002) stipulates $1.2 billion must go for transportation, and Prop 49 (Nov. 2002) forces half a billion dollars into after-school programs. With all this budgeting through the ballot box, there's less and less room for the legislature to accommodate unexpected economic conditions, natural disasters, homeland security, and other surprises. A report by the California Budget Project concludes that "using a very minimal definition of mandatory spending, approximately two-thirds of state spending is mandatory and one third (35 percent) is discretionary … In reality, the Legislature is much more constrained." With measures like Prop 63, it will only get worse.

These propositions can impose absurd priorities on state spending. Who really believes that after-school programs are more important than law enforcement, health care, or clean water? Nobody. Yet Prop 49 forces the legislature to fund after-school programs before it considers more vital things, every single year. These permanent spending mandates just don't make sense.

Compounding this folly is the enormous ratchet built into Prop 63. By not indexing the $1 million floor on the new bracket, Prop 63 will result in huge increases in its earmarked funds down the road. The Legislative Analyst projects $750 million in 2005-6, and $800 million in 2006-7. But over time inflation will make more and more of us millionaires, and soon crank that figure into the stratosphere. Economic recovery and, dare I suggest, another bubble, would only increase it further. Will the legislature be allowed to use any of that windfall for emergencies or other, equally deserving programs? Not one dime.

In case you haven't noticed, I haven't said yet what Prop 63 would fund. It's mental health services, a very admirable cause. In addition to the obvious human benefits, the increase in services from Prop 63 would reduce state costs for prisons and jails, medical care, homeless shelters, and social services. I would love to see this happen. But Prop 63's inflexibility makes it a bad law that will straitjacket the legislature for decades. As much as we need to improve mental health care, we can't live with that side-effect.



Proposition 64: Weakening Unfair Business Competition Laws – NO

California has a very beneficial law against unfair business competition. It has been used to stop business owners who violate privacy, deceive or cheat their customers, pollute the environment or sell products that threaten public health.

The law has a unique provision that is at once the key to its effectiveness and its Achilles' heel. You can find it in strikeout type on page 109 of your Prop Book. It says actions for relief may be pursued by any organization or person "acting for the interests of itself, its members or the general public."

This clause has allowed public health groups to sue to halt the sale of contaminated water from vending machines, and environmental groups to sue to halt refrigerator manufacturers from claiming their CFC-containing products are good for the environment. Safeway has been ordered to stop changing the date on old meat for resale. Car dealers have been held accountable for bait-and-switch tactics. Obviously we all benefit when the law is used this way.

But unscrupulous attorneys have used the threat of such a suit to harass small business owners who often lack the knowledge or resources to resist them. These "shakedown" suits are usually groundless, but the business owners frequently pay to settle them anyway just to make them go away.

Prop 64 claims it will eliminate shakedown lawsuits by requiring that any member of the public who files an unfair business competition lawsuit has "suffered injury in fact and has lost money or property as a result of such unfair competition." In other words, unless you have suffered a financial loss, you'll no longer be allowed to press an unfair business competition lawsuit. District attorneys and other public lawyers may still file such suits without showing loss, but they're so stretched by their existing caseloads that they'll be able to pursue only a tiny fraction of deserving actions.

Now, I'm as sympathetic as the next guy to the plight of shakedown victims. But shakedowns are already illegal. Lawyers have been disbarred and are facing civil actions for abusing the unfair business competition law.

What's really behind Prop 64 is an attempt by big business to reduce enforcement of the law. Yes, Prop 64 will eliminate sleazy shakedowns against small businesses. But it will also eliminate hundreds of beneficial, legitimate actions against larger businesses. This is why the measure has drawn $100,000 or more in support from Microsoft, Southern California Edison, State Farm, Bank of America, Oracle, Exxon Mobil, Target, Shell Oil, and Intel, to name just a few, as well as millions of dollars from the Car Dealers Association.

These big players aren't scared by nuisance shakedown suits. Instead, they want to operate unencumbered by public unfair business competition suits. With Prop 64, chances are that car dealers won't be sued for false advertising, oil companies won't be sued for polluting, and energy companies won't be sued for market manipulation.

Prop 64's backers are hoping you'll swallow their sad tale of shakedown lawsuits, but they really want to duck accountability for their own unscrupulous practices. Talk about your bait-and-switch! Send this proposition to the trash heap, and let Californians continue to protect themselves and their environment.



Proposition 65: Another Sad Orphan Proposition – NO

This has been abandoned by its proponents in favor of Prop 1A, under threat of an all-out Schwarzenegger offensive. See my Prop 1A rating for details.



Proposition 66: Requiring Third Strike to be a Violent or Serious Felony – YES

California's revolutionary "Three Strikes and You're Out" law certainly had great appeal in 1994, when as Prop 184 it garnered 72% of the vote in the wake of some sensationally brutal crimes. And it has had the desired effect: crime in our state is down by twice the national average. But now that we have some experience with the law, it's time to make adjustments. Hence Prop 66.

Ten years after passage, "Three Strikes" remains the harshest such law in the nation. Anyone convicted of one "violent or serious" felony will have his sentence doubled for a second felony, violent/serious or not. And anyone convicted of two "violent or serious" felonies will be put away for 25-to-life for a third felony, regardless of whether it's violent or serious.

The current definition of a "violent or serious" felony is too broad. It includes such offenses as attempted burglary, burglary of an unoccupied residence, and threatening to injure someone. These should all be felonies, of course, but they're not in the same class as rape, murder, and armed robbery, and should not count as strikes. Prop 66 will tighten the definition of "violent or serious" felonies to those that really are violent or serious.

Also, you'll notice that the current law doesn't require the second or third strike to be "violent or serious" in order to trigger a double sentence or 25-to-life, respectively. The result is that the majority of third-strikers to date have been given their huge sentences for non-violent felonies such as fraud or theft. Prop 66 will require all strikes to be "violent or serious" in order to count toward increased sentences. As the Sacramento Bee's excellent editorial points out, Three Strikes "puts away too many nonviolent offenders for 25 years to life, crowding prisons at a cost of more than $775,000 per inmate. The 25-years-to-life punishment should be reserved for habitual violent criminals."

There are 4,300 third-strikers currently in prison whose third strike was not "violent or serious". These convicts will receive a one-time resentencing hearing to see if the time fits the crime. No inmates will be automatically released, but judges will reduce some sentences. This will correct perhaps the most glaring problem with the current Three Strikes law.

Despite what opponents may claim, Prop 66 will not release thousands of drooling, psychopathic murderers and rapists into our neighborhoods. It is a measured, sensible adjustment of an effective law. The heart of Three Strikes will remain intact: repeat violent offenders will be put away. That's what voters really wanted when they passed it ten years ago.



Proposition 67: Tax on Phone Bills for Emergency Medical Services – NO

By law, emergency rooms must treat anyone who shows up regardless of their ability to pay. So hospitals and doctors end up providing a lot of ER services to non-paying patients, particularly those without health insurance (see Prop 72). The government partially compensates emergency service providers through programs such as the Prop 99 tobacco tax and the Maddy Fund from traffic fines. Still, four out of five ERs lose money—a lot of money. According to the California Medical Association, losses will be over $600 million this year. More than sixty ERs in California have closed in the past decade, in large part due to these losses.

The legal requirement to provide ER services without full payment is, in effect, an unfunded government mandate. I cannot think of another industry that is required to provide so much without full reimbursement. Can you imagine if restaurants were required to feed the hungry, or hotels to house the homeless, without being paid? It would be scandalous.

Prop 67 seeks to address this obvious injustice by imposing a 3% tax on telephone calls made within California. The tax would apply to both land lines and mobile phones, but be limited to 50¢ a month on residential service. A typical $35 cellphone bill would go up about one dollar. This is not a huge tax increase. It would initially raise about $500 million a year, nearly all earmarked for hospital emergency services.

It's the earmarking that bothers me. As I point out in my rating of Prop 63, requirements to spend certain government income on specific programs box in the legislature and impose inappropriate priorities on the budget.

Such earmarking is particularly misguided when the funding source is as tenuous as telephone bills. Today many of us have multiple phone lines: home, office, mobile, fax, and so on. I've even met people with two-page business cards because they have so many contact points. All these numbers mean lots of taxable phone bills. But this is a recent phenomenon, and may be temporary. The rise of Internet telephony, "follow-me" numbers (area code 500), and other new technologies may burst the telephone service bubble as fast as it has grown. At that point, Prop 67 will provide only a fraction of what's needed, and emergency service providers will be in the same trouble they're in today.

A common problem with ballot propositions is their narrowness of scope. I want to see a complete reworking of health care funding, covering all providers, not just emergency rooms. What I get instead is a piecemeal approach: Prop 67 for emergency rooms, Prop 63 for psychiatric care, Prop 72 to increase the insured population. Each time one of these narrow-scope measures passes, it decreases the pressure to solve the larger issue. Passage of Prop 67 would reduce the likelihood that the legislature or voters will address the big picture of health care funding.

The government should pay for the emergency services its laws require. It's not only the ethical thing to do, but the practical thing as well: we cannot afford to let more emergency rooms close. Prop 67, however, will not achieve this. Instead, by providing the illusion of an answer with questionable funding and budget lock-ins, it will forestall the implementation of a comprehensive, long-term solution that includes not just emergency care, but all health care.



Proposition 68: Orphan No. 3: Racetrack & Card Room Casinos – NO

You got to know when to hold ‘em, know when to fold ‘em,
Know when to walk away and know when to run.
You never read that Field Poll when you're sittin' at the table.
There'll be time enough to count them ballots when the votin's done.

The sixteen racetracks and card rooms who poured over $26 million into Prop 68 knew when to run, all right. On October 6th they folded their hand in the face of universal ridicule and certain defeat. This hopeless initiative would have granted these sixteen the right to open ultra-lucrative casinos in LA and the Bay Area. Political casualties include several law-enforcement officials duped into supporting it. Although Prop 68 remains on the ballot, it's like The Gambler said: "If you don't mind me sayin', I can see you're out of aces ... The best that you can hope for is to die in your sleep." Sweet dreams, Prop 68.



Proposition 69: DNA Database – NO

Prop 69 would require law enforcement agencies to collect DNA samples from anyone arrested for any felony offense, starting in 2009. The DNA profiles would be placed into a statewide DNA database, and shared with the state Department of Justice and the FBI. Anyone arrested and not subsequently convicted may petition the court to have their DNA samples and data records destroyed. The court isn't required to grant the petition, however, and there is no appeal of the court's decision.

DNA isn't like the mug shots and fingerprints police currently collect when they arrest someone. Yes, DNA can identify individuals with a high degree of accuracy (although human error, mishandling and contamination make it far from infallible). But a person's DNA also contains vast stores of genetic information that are just plain irrelevant, and potentially damaging if misused. Should the government be privy to someone's predisposition to certain medical or psychological conditions? Such genetic information has actually caused people to lose their health insurance and even their jobs. I shudder in horror when I imagine a prosecutor using it to convince a jury that someone was genetically predisposed to commit a crime. This is the stuff of bad science fiction.

Attorney General Bill Lockyer asserts that "Proposition 69 authorizes courts to order the Department of Justice to expunge a person's DNA profile from the database if a case has been dismissed or a defendant is found not guilty." But does Prop 69 require the court to issue such an order? No.

He writes that Prop 69 "will continue to require the department to remove a sample once it is notified by the law enforcement agency that a person, within two years of submitting a DNA sample, is no longer considered a suspect in a criminal investigation." But does Prop 69 require law enforcement agencies to issue such a notification? No.

And he writes that "the initiative retains and expands provisions that protect innocent individuals from having to submit DNA for permanent storage in the DNA databank." This is untrue. Everyone arrested must submit DNA, but only the lucky will escape permanent storage. They'll need luck to be reported as non-suspects, or receive a court order, or have their petitions granted, because Prop 69 guarantees none of these.

This measure is an outrageous infringement of our privacy rights as spelled out in the state Constitution. Every year in California over 50,000 people arrested for felonies are released without being charged. Prop 69 will make most of these people's genetic information public property. Fighting crime may be important, but I don't want to live in that kind of Orwellian world.



Proposition 70: Tribal Gaming: Agua Caliente Band's Scheme – NO

The outlook wasn't brilliant for the government that day.
The Indian casinos all had compacts signed by Gray,
The governor who'd got kicked out for treating tribes too kind:
His compacts gave the tribes excessive profits, most opined.

Ten million voters voted out that Davis piece of dirt,
And voted in fair Arnold, who they all knew would assert
That renegotiation of the compacts was to be
Among his most important tasks, with top priority.

The great Agua Caliente Band, a tribe out near Palm Springs,
Had recently amassed the kind of wealth envied by kings
By operating two casinos full of slots and cards,
And sending Sacramento little more than their regards.

The compact the Caliente Band had signed in '99
Allowed them just two thousand slot machines, and by design
Prohibited roulette, and craps, and blackjack. 'Twas the hope
To limit these casinos in their size and in their scope.

While limited, casinos in the state still made each year
Five billion dollars, going up as newer ones appear.
How much of that is sent to the state government, you say?
One hundred million—two percent—far less than we would pay.

When Arnold came, a year ago, he saw this was no good.
He hammered out new compacts with as many tribes as would.
Five tribes (but not Caliente Band) will pay the state much more,
And in exchange, their caps on slot machines we'll now ignore.

"But oh," Caliente's leaders yelped, "The Terminator's here.
He wants to renegotiate, and bankrupt us, we fear.
We won't give in—in fact, we'll fight! Let's seek the voters' aid!
We'll buy a proposition. Then we needn't be afraid."

The proposition they devised is really quite a piece.
It lifts all limits, sanctioning unlimited increase
In number of casinos, slot machines and types of games,
Without increasing payments to the state to help its aims.

This Proposition 70 is just a buy-a-law.
It's renegotiation, but it has a fatal flaw:
It's bargaining by ballot box, with terms writ by the tribe.
There's something not quite fair here, and it's not hard to describe.

Oh somewhere in this favored land the sun is shining bright,
The band is playing somewhere, and somewhere hearts are light;
And somewhere men are laughing, and little children shout;
But there is no joy near Palm Springs—Prop 70 has struck out.



Proposition 71: $3 Billion Stem Cell Research Bonds – YES

Please see My Semi-Biennial Lecture on Bonds for my opinion on bonds in general.

This is a close call. Prop 71 uses bonds completely inappropriately to fund scientific research into medical uses of stem cells. The amount of money—$3 billion—is staggering, and the eventual payoff is by no means certain. Yet turning down the chance to make life better for people worldwide would be such a huge mistake that I'm abandoning my usual, reasoned approach and recommending a "yes" vote. Call me irrational, but this one just feels right.

Human stem cells are unspecialized cells capable of transforming into specialized cells. Unlike other cells, they can reproduce almost indefinitely, creating stem cell "lines". There are two types of stem cells: adult, which we all produce in our bones, brains, and elsewhere, and embryonic, which come from human embryos. While adult stem cells transform only into the specialized types of their origin, embryonic stem cells can transform into any type of cell in the body. For this reason, embryonic stem cells are widely believed to hold the key to curing degenerative diseases such as diabetes, multiple sclerosis, Alzheimer's, and Parkinson's. They also hold great potential for treating trauma such as burns and spinal cord injuries.

Creating new embryonic stem cell lines destroys human embryos. Because of this, religions that oppose abortion, such as the Catholic Church, also oppose use of embryonic stem cells for medical research. I should note that the harvested embryos are hollow blastocysts containing just 200-250 cells. Typically they're unwanted, "extra" specimens conceived in-vitro at fertility clinics, and would be destroyed anyway. Nevertheless, if you oppose the destruction of human embryos on religious or moral grounds, even considering the potential benefit to suffering millions, stop here and vote "no" on Prop 71.

The Bush administration, which opposes abortion, has moved to prevent the creation of new embryonic stem cell lines. It has blocked federal funding for any research that uses lines created after August 9, 2001. This has had a stifling effect on research. There are fewer than two dozen stem cell lines that old, making it unlikely that a given patient will be a sufficient genetic match to benefit. Furthermore, all the available lines are contaminated with mouse cells, posing needless risk to humans. New techniques obviate the need for mouse tissue. Since most basic medical research receives federal funding, Bush's limitation on stem cell lines has effectively frozen embryonic stem cell research in this country.

The backers of Prop 71 reason that if Washington won't fund this research, Sacramento should. Prop 71 will provide $3 billion in state money to fund stem cell research. This would specifically include the creation of new embryonic stem cell lines.

In a way, Prop 71 is your chance to stick it in the Bushies' eye. "We don't need your Right-to-Life, strings-attached federal research dollars," Prop 71 supporters might say. "We'll do it ourselves." John Kerry has promised to get rid of Bush's restrictions, though, so if Kerry wins, Prop 71 will have been unnecessary.

Prop 71 has two additional problems: bonds are the wrong way to pay for this kind of program, and we can't afford it. In my Semi-Biennial Lecture on Bonds, I assert that bonds are appropriate when you're paying for long-lived items like land, buildings and roads. The proceeds of Prop 71, however, will be used for everything in a research lab. This includes such transient expenses as administration, researcher salaries, office supplies, travel, and chemicals. Furthermore, although I anticipate some of Prop 71 will fund research at the University of California, the bulk of it will probably go to private labs, and even biotech start-ups, where we may never see it again. As I point out in my rating of Prop 61, I'm very uneasy granting bond money to unaccountable private institutions.

There may be a financial upside, however. The board that disburses Prop 71 funding is supposed to negotiate rights to a share of any future patents, royalties or licenses resulting from state-funded research. If the agreements are favorable and the research pans out, there could be a handsome windfall for the state. But watch out: the board will be packed with representatives of the biotech industry and industry-friendly disease advocacy groups, so there will be pressure to tilt the royalty agreements away from the state.

Prop 71 also contains some stupid budget tricks to make its enormous cost more palatable. Recognizing that we're currently in a budget crisis, during the first five years Prop 71 postpones repayment of the bond principal and pays the interest out of the bond proceeds themselves, so the bonds won't cost the General Fund a penny. In rough terms, this means that instead of having $300 million available for stem cell research during each of the first five years, only $100 million will be available, with the remaining $200 million going to bond interest. It's kind of like these cash-out loan schemes you see for home refinancing, except there's no home equity to use as collateral. Instead, we just have to hope that by 2010, and for 25 years thereafter, the General Fund will be able to afford the $200 million bond payments.

As I've said, the success of Prop 71's Grand Plan hinges on a number of gambles. It gambles that we'll have enough money after 2010 to pay for it; that the research will produce results; that the royalty agreements won't give away the store; and that John Kerry will lose. If any of these gambles don't come through, we may be in for a serious hosing.

But in the final analysis, these are all risks I'm willing to take. Why? Because despite its shortcomings, the potential of Prop 71 to ease human suffering worldwide is too huge to dismiss. Embryonic stem cell research holds the kind of promise we rarely see, and its applications are unbelievably broad. The list is breathtaking: leukemia, cystic fibrosis, ALS, autism, HIV, and on and on. Like the space program of 40 years ago, this is science full of hopes and dreams for a brighter future. Unlike it, though, the practical implications are truly world-shaking. Just this once, let's be bold.



Proposition 72: Requiring Employers of 20 or More to Provide Health Care Benefits – YES

I want universal health insurance.

In this day and age, it's shameful that so many people are uninsured. Ten percent of Californians—3.6 million people—had no coverage at all in 2001, and at least 2.5 million others went without it for part of the year.

Life is tough for those millions. Imagine: You can't afford to see a regular doctor for minor problems or preventive care. (If you could, you'd buy insurance, right?) So you let things fester until they get so bad you can no longer ignore them. Then you visit an emergency room. After treatment, you're handed a bill for hundreds, or perhaps thousands, of dollars, and prescriptions for drugs costing hundreds more. What should have been treated routinely in an office visit months ago now threatens you with both chronic ill health and financial ruin. It's intolerable.

"Get a job," the Scrooges out there will say. "That's how you get health insurance." Yet over 80% of the uninsured have jobs, or are dependents of those that do. Shouldn't employed people have access to affordable health insurance?

Yes, they should, and Prop 72 is the way they'll get it. Under Prop 72, employers with 50 or more employees in California must provide subsidized health insurance for all employees who work 100 or more hours a month. Employees contribute up to 20% of the insurance premiums, as well as any deductibles and copayments. The threshold could drop from 50 employees to 20 if enabling legislation is passed (no sure thing).

Is this socialized medicine? Hardly. Under Prop 72, the state's health insurance board, known as MRMIB to many but Mr. Mib to you and me, will act only as insurance broker, matching employers with private insurers. Mr. Mib will make sure health plans meet certain minimum standards, such as coverage for primary care, hospitalization and prescription drugs. Mib's friend, Mr. Edd (the Employment Development Department) will courteously collect premiums from employers across the state, then hand them over to Mr. Mib, who will pay the private insurers on the employers' behalf. After that, all interactions are strictly between the employees, employers, insurers, and health care providers. Messrs. Mib and Edd promise fastidiously to stay out of the actual business of health insurance.

Of course, any employers who wish to go (or remain) outside the Mib/Edd enterprise by contracting their own insurance are perfectly welcome to do so.

How much will it cost? Mr. Mib will negotiate with private insurers on the open market, so it will cost market rates. Estimates vary, but seem to center on $8,500 per year for a typical family, with the employer contributing eighty percent ($6,800) and the employee contributing twenty percent ($1,700).

Opponents of Prop 72 incorrectly label these premiums a tax. They are not. They are premiums for mandatory health insurance, and are no more a tax than premiums for mandatory automobile insurance. All Prop 72 does is require more people to carry health insurance. It's not a revolutionary concept.

Opponents of Prop 72 correctly point out that the measure contains no cost controls. The cost of health insurance is skyrocketing, and Prop 72 will do nothing to slow it down. But, as I like to say, never vote down a proposition because of what it won't do. Consider only what it will do, and vote yes or no based on that. Prop 72 won't cure cancer, end wars, or buy ice cream for everyone either, but that's no reason to vote against it.

A cursory inspection of the political contributors for and against Prop 72 reveals the following: Supporting the measure are unions, unions and more unions, representing uninsured workers who want to lead tolerable lifestyles. Opposing the measure are Carl's Jr., Target, KFC, Sears, McDonald's, Macy's, Taco Bell, Nordstrom, Jack in the Box, Walgreen's, Burger King, and Office Depot. In short, large employers of low-wage workers whose health they'd just as soon ignore.

These employers are shirking their responsibility under our current system. Sure, the system is badly flawed. But for better or worse, health insurance in this country is the responsibility of employers. It's my hope that if Prop 72 passes, the new financial burden will spur those large employers to push for a fair and sensible program of universal health coverage. The failure of Prop 72, on the other hand, will only perpetuate these corporations' vested interest in the current, inequitable system.

It is true that Prop 72's new expenses will affect employers' bottom lines. It will also spawn some crazy accounting shenanigans as employers try to stay under the 50-employee threshold. But Prop 72 will make health insurance available to over one million more Californians. For that result, I'm willing to put up with some games.

The United States is virtually alone among developed nations in not offering universal health insurance. They've got it in Canada, the United Kingdom, Sweden, Australia, Israel, even South Africa. Prop 72 isn't universal health insurance; it offers only a tiny step in that direction. But I'll take what I can get.



My Semi-Biennial Lecture on Bonds

When California wants to finance a large project, it asks the voters for permission to take out a loan. Props 61 and 71 are just such requests. If voters approve, the legislature may take out loans for the projects by selling general obligation bonds, which are paid back with interest over thirty years or so. The bond payments come out of the state's main budget, the General Fund. So when we vote on the bonds, we are really voting on whether the projects in question ought to be added to the state's budget.

"Wait a minute!" I hear you cry. "What about those interest payments? Won't we end up paying more for interest than for the bonds themselves?" This used to be the case, but with today's low interest rates each dollar of bond money will cost only 25 cents in interest, accounting for inflation. (See page 80 of your main ballot pamphlet for details.)

"Okay," you admit, "but loans are still more expensive than pay-as-you-go." This is true. But loans are the only way to buy a house, or a car, or anything else that you need immediately but can't pay for yet. It's worth paying the premium of interest to get the funding now. You may be thinking, "We're in a budget crisis! We can't afford these bonds this year!" My response is: Huh? A budget crisis is exactly when you should borrow. We'll pay off the bonds later, when the picture in Sacramento will presumably be rosier.

"Well and good," you continue, "but there are $3.75 billion in bonds on this ballot. Isn't that too much to borrow?" For you, yes, but the State of California can handle it. Bond payments today amount to 4.6% of the General Fund, down from a high of 5% in the mid-1990s. They'll rise to 5.9% in a few years, due to bonds from last March's Prop 55 ($12.3 billion) and 2002's Props 46, 47 and 50 ($18.5 billion total). Prop 61, at less than a billion dollars, won't affect the debt ratio significantly, but Prop 71's $3 billion will jack it up to 6.2%, still a manageable amount. (I'm not counting the debt-relief bonds from last March's Prop 57 because they're in a different category. For the record, however, they add roughly 1.6% to the debt ratio.)

Props 61 and 71 will fund long-lived, tangible acquisitions, such as hospital buildings and research equipment. It's sensible to make extended payments for things that will be used far into the future. It's not sensible, however, to make these payments for other people's property, as both 61 and 71 would do. And Prop 71, which will also fund administration, research staff salaries, consumable goods, and other indirect costs, violates this point flagrantly.

Remember, too, that California's population continues to grow by hundreds of thousands of people every year. Borrowing makes particular sense if you know your income will go up in the future. As the state grows and the economy recovers, the General Fund will certainly grow too.

There is one last reason to vote for a bond measure, and it's particularly important when considering Prop 71. In addition to being formal requests for permission to take out loans, bond measures are also looked upon as referenda on the merits of the proposed projects. If a bond measure fails, legislators are likely to believe that the public feels the project is not worthy of receiving state funding. By voting no, you may have meant, "Yes on the project but no on the bonds," but your message to Sacramento will read, "No on the project." So if you vote down a bond measure just because you don't like bonds, you may well have killed forever the project the bonds were to have funded.



 
 
 
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