|Sensible opinions on the California ballot propositions since 1980 by Pete Stahl|
Read the ratings:
Prop. 30 - YES
Prop. 31 - NO
Prop. 32 - NO
Prop. 33 - NO
Prop. 34 - YES
Prop. 35 - NO
Prop. 36 - YES
Prop. 37 - NO
Prop. 38 - YES
Prop. 39 - YES
Prop. 40 - YES
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Pete Rates the Propositions
Proposition 30: Jerry Brown's Tax Increase – YES
Summary: To solve a $16 billion budget shortfall, the state has identified $8 billion in spending cuts and $2 billion in other solutions. $6 billion more is still needed. Props 30 and 38 bridge the gap with temporary tax increases. Prop 30 increases income taxes on the One Percent and sales taxes on everybody; Prop 38 increases just the income tax, for all brackets except the lowest. If both pass, only the one receiving the most votes will go into effect. But if both fail, public education will instantly lose $6 billion, wreaking havoc on school districts, community colleges and universities—and the children they serve. Vote "yes" on both; we can't afford to play favorites.
Details: Props 30 and 38 both temporarily increase the personal income tax in order to generate badly needed funding for public education. Though there are significant differences between the two measures, they share the same purpose and approach. So let's look first at whether California needs a tax increase. If so, then we can examine the differences between the measures and decide which deserves our support. (Spoiler alert: Vote for both.)
Here's where the state budget currently stands: The continued sluggish economy has caused state revenues to come in far short of expectations. As a result, the deficit has widened to a staggering $16 billion. The latest budget document, the May Revision, details how Governor Brown is trying to make ends meet. Over 30,000 government workers are being laid off; many others are having their hours reduced; the Department of Corrections is being downsized; 80 boards and commissions are being eliminated; funding for nursing homes and hospitals is being reduced nearly $400 million; and the list goes on.
As painful as these spending cuts are, they aren't enough. Even with $8 billion in expenditure reductions and $2 billion other solutions, the budget is still $6 billion short of balancing. The May Revision depends on new revenues; otherwise even deeper, automatic spending cuts will be triggered, nearly all from public education.
The outlook is bleak if both Prop 30 and Prop 38 fail. Here's a taste:
It's conceivable that the Legislature would reshuffle the cuts to spread the pain over more departments, but $6 billion is still $6 billion. It's not a happy picture any way you slice it.
In view of that dire scenario, there is no question that we must approve a tax increase to provide the needed revenue. Remember: the tax increases are temporary, and they're just one component of a solution that also includes $8 billion in spending cuts. It's a fair and reasonable step for us to take.
So we must support a tax increase. Which one? Let's see how they compare.
Prop 30 will increase personal income tax (PIT) rates on high incomes for seven years. Most of the new revenue (about 79%) will come from The One Percent: those with incomes above $500,000. PIT rates will go up 1% on income above $500,000; 2% above $600,000; and 3% above $1 million. (All numbers are "filing jointly." Divide by two for "single.")
Prop 30 will also increase the statewide sales tax for four years. The hike will be one-quarter cent, making the statewide base 7.5%. Depending on where you are, you'll pay anything from 7.5% (Bakersfield, Chico, Monterey, Ventura) to 10.0% (Pico Rivera, South Gate). The sales tax is regressive, of course. Everybody pays it, and it swallows a larger portion of poor people's income than wealthy people's. But California's sales tax doesn't apply to services or most food, so the effect on the poor will be limited. Those in the bottom fifth of incomes (below $22,000) will pay just $24 per year on average, according to a California Budget Project report.
Prop 30 will bring in about $6 billion annually for seven years. This will be sufficient to close this year's budget gap, and allow the state to pay down debt from previous years, providing a more solid foundation going forward.
The revenue from Prop 30's tax increases will go into the General Fund. You might think this means passing Prop 30 will boost the Prop 98 school funding guarantee. However, the school funding guarantee will get that bump regardless of whether Prop 30 passes, because of a tortuously complex provision the Legislature put into last year's Budget Act. It works like this: Last year, the state started sending some $6 billion a year to counties to pay for "realignment," or pushing prison and parole functions down to the local level. According to the Act, this money is not counted as General Fund revenue for Prop 98 purposes. But if Prop 30 fails, it will count. Got that? The school funding guarantee will grow by about the same amount whether Prop 30 passes or fails. If it passes, the guarantee will grow due to the new tax revenue; if it fails, the guarantee will grow because of the realignment money. Prop 98 is a non-issue.
Prop 38 will increase PIT rates for twelve years on every income tax bracket except the lowest (below $14,632). Prop 38 is less weighted towards the very wealthy than Prop 30, with The One Percent contributing only about 44% of new revenue. However, you can't exactly say Prop 38 is regressive: 86% of new revenue would come from the wealthiest one-fifth of Californians (that's The Twenty Percent to you Occupiers). The PIT increase is terraced very gradually over ten brackets. For example, 0.4% on income above $14,642; 1.6% above $96,058; and a top bump of 2.2% above $5 million. Prop 38 does not touch the sales tax.
Prop 38 will bring in about $10 billion annually for twelve years, which is far more money and five years longer than Prop 30. It will be sufficient to close this year's budget gap, pay off debt from previous years, pay down state school construction bonds, and still have $1 billion left over for a new program of early childhood education. Paying down construction bonds will have a significant impact on the state's structural deficit, improving the budget picture for many years after Prop 38 expires.
Prop 38 revenue does not go into the General Fund. But as I pointed out above, this does not matter. If Prop 38 wins, the Prop 98 school funding guarantee will increase anyway because realignment money will be counted.
The way Prop 38 distributes its funds to schools is unconventional. While Prop 30 sends money to school and community college districts to use as they see fit, Prop 38 sends money with strings attached. The funds must be spent at specific school sites, with more money flowing to schools with low-income students. About $700 million is to be spent on staff training and high-tech instructional equipment and materials. There are public input and reporting requirements as well.
What distinguishes Prop 38 most is its $1 billion early childhood education program. Aimed at kids age five and younger, this program would bolster the state's child care and preschools, increasing capacity and quality statewide. Much of the money would simply restore funding that has been cut in recent years, improving the frequency of licensing inspections and quality evaluations. Prop 38 would also implement a state Early Head Start program for infants and toddlers to complement the existing federal program. Money would be allocated to lowest-income neighborhoods first, helping single parents there get into the workforce.
Is the early childhood education program a permanent spending requirement? Is it budgeting by ballot box? It's hard to know. The measure contains a "maintenance of effort" clause that seems to imply a spending mandate. But the California Budget Project suggests that the Legislature might be able to ignore the clause under a certain interpretation. In any event, the mandate would cease along with the tax increase in 2024.
What will happen when these measures expire? Theoretically the revenue would disappear and the state budget would shrink, possibly causing renewed annual budget crises. But if the PIT increases are well-received, chances are you'll see further ballot propositions making them permanent before they expire. Or, if another economic boom comes along or the political tide turns, we may decide to do without the revenue. My crystal ball cannot see out to 2019, when Prop 30 would expire, let alone 2024.
There are things to like in both propositions. Both close the budget gap for this year and, one hopes, a few more. Prop 38 also addresses the structural deficit, which I like. However, its new programs and spending restrictions make it a policy bill piggybacking on a revenue measure, which I find distasteful. So I prefer Prop 30. But I would much rather see either one enacted than to see both fail, so I urge you to vote "yes" on both. If 60% of the electorate wants a tax increase, but only 30% vote for each measure, we will really have shot ourselves in the foot.
Proposition 31: Budget Reform and Local Override – NO
Summary: A mishmash of reforms, some good, others potentially destructive. Good: Two-year budget cycle; legislative sunshine. Bad: local government coalitions of dubious necessity that could override state regulations; pay-as-you-go spending limits with many loopholes, permanently enshrined in the Constitution. On balance, there isn't enough upside to justify the problems.
Details: Prop 31 is a multifaceted, good-government bill from the bipartisan policy wonks at California Forward. There's much to like in it. For starters, Prop 31 will require all Legislative bills to be available for public viewing for at least three days before they're voted on. No more last-minute, back-room deals that legislators are forced to vote on before even reading them (case in point: the secret tax breaks that are the subject of Prop 39).
Prop 31 will also require a two-year budget cycle. I think this is a great idea. Part of our budget problem is the enormous year-to-year fluctuation in public revenues, largely due to the ups and downs of the stock market. For example, revenue from the personal income tax more than doubled between 1996 and 2001, then dropped $12 billion in one year when the bubble burst in 2002. It nearly doubled again by 2008, only to crash by another $12 billion the next year.
This kind of instability makes budgeting excruciatingly painful in lean years, and seems to encourage profligate spending during good ones. The two-year budget cycle in Prop 31 would dampen short-term, violent swings in revenue. It would make it easier to survive bad years, and make it less likely we'd overspend in boom years. As a happy side effect, it would make budget planning far easier for school districts and other state-dependent agencies.
Prop 31 also requires the Legislature to set aside time every other year to review programs receiving public funding. Each program must be reviewed at least every five years. In addition, both state and local governments would have to come up with ways to measure the effectiveness of all new programs, and periodically report on their progress.
I'm not so sure about this part of Prop 31. I like the concept of this kind of accountability, and I can see that it may lead to the timely identification and elimination of waste, inefficiency, and misdirected effort. On the other hand, let's not kid ourselves about the effect these reports will have in Sacramento. When push comes to shove, legislators will still find it hard to vote against the wishes of entrenched interests such as government contractors or employee unions, regardless of what the latest periodic metrics say. And the bureaucratic overhead of creating and updating these reports is non-trivial, perhaps tens of millions of dollars every year.
Prop 31 has two major provisions that are clearly problematic. The first authorizes a new process, the Community Strategic Action Plan, whereby local counties, cities, school districts, and other local government entities can decide to tackle a state-mandated "service area" themselves, in their own way. The service area could be something as broad as education, public safety, public health, or economic development. The local entities together would devise a comprehensive solution, and adopt whatever standards and procedures they see fit. If those standards and procedures contradict a state law or regulation, the responsible state agency has 60 days to veto the plan; the state Legislature may also veto the plan during the same period.
California Forward has been extremely quiet about why we need Community Strategic Action Plans. I would expect them to blast me with an urgent, gripping scenario, replete with brain-eating zombies roaming my neighborhood if we fail to heed their dire warning. Instead, the most passion they can muster is, "To improve performance at the local level, communities will need more flexibility to tailor programs to local needs." Meh.
If they can't be persuasive, can't they at least be more specific? Which service areas is the state screwing up so badly? Which counties are demanding local autonomy? How do they envision a Community Strategic Action Plan riding to the rescue? Why on earth would the Legislature ever permit any plan to go into effect? It is a mystery.
The most ominous provision of Prop 31 is pay-as-you-go (PAYGO) budgeting. Under PAYGO, if the Legislature wants to enact a tax cut, create a new program, or expand an existing one, it must identify new revenue sources and/or offsetting spending cuts to pay for it. On the surface this sounds sensible enough: we shouldn't commit to spending without knowing where the money is coming from.
Unfortunately Prop 31 stumbles on implementation. Many categories of spending will be excluded from PAYGO: one-time expenditures, federally mandated spending; collectively bargained pay increases; constitutionally required spending; increased departmental workloads; ballot propositions. So many things are excluded, in fact, that PAYGO will be little more than an annoyance—a nuisance procedural rule that legislators will work around with accounting gimmicks. Or else the interests that want new programs will skip the Legislature and come directly to you and me with a ballot initiative, hat in hand. Who wants that? I certainly don't.
The nonpartisan Center on Budget and Policy Priorities has an excellent white paper on PAYGO in state government. The author is a big fan of PAYGO in general: "A PAYGO approach is superior ... because it imposes budget discipline while recognizing the need to adapt to changing circumstances in a responsible manner." But the author warns against making PAYGO part of the Constitution, as Prop 31 would do:
"While a state could adopt PAYGO as a legislative rule or enact it as a statute, it should not enshrine PAYGO in its constitution. PAYGO rules can help a state maintain an appropriate level of fiscal discipline under current conditions, but it is impossible to predict what circumstances will be like 25 or more years from now. Once fiscal policy is embedded in a constitution, it becomes difficult or impossible to change, even if it no longer useful or appropriate — or even if it is harmful."
I wish I could support Prop 31, because our creaky, crusty government needs an overhaul. But Prop 31 has too many major problems. Please keep at it, California Forward. Maybe next time you can give us a simpler bill and a compelling, persuasive story to sell it. Thrill us with the vision of your bill making California a better place, and terrify us with the specter of failure. I recommend zombies.
Proposition 32: Prohibiting Political Use of Payroll Deductions – NO
Summary: This is an anti-union measure, plain and simple. It would prevent unions from using dues deducted from paychecks for political purposes. At their core, unions are advocacy groups that must be allowed to influence public policy, especially in an era when there are no effective limits on management (corporate) influence.
Details: If you hate unions and everything they stand for, then Prop 32 is for you. It weakens unions by cutting off a major source of political funding. Under Prop 32, union dues collected via payroll deduction cannot be used to support or oppose ballot measures or candidates, or to make independent expenditures.
The corresponding limitation on corporations? Nothing! Oh, sure, Prop 32 prevents corporations from using payroll deductions for political purposes. But corporations don't use payroll deductions for political purposes; they use other sources, like sales income. Prop 32 targets unions and only unions.
Unions exist for collective bargaining. In a state with 1.5 million public employees, the "management" that unions bargain with is often a councilman, supervisor, legislator or even the voters. There is no way unions can be an effective voice for their members if they are silenced where it matters most. Meanwhile, business interests and wealthy individuals will continue their spending unfettered, influencing elections and purchasing ballot propositions for their own benefit. In the age of Citizens United, apparently it isn't enough that corporations can contribute unlimited amounts; they must also silence the opposition. It's sickening.
Proposition 33: Mercury Insurance Rides Again – NO
Summary: Repeat of a failed 2010 attempt by Mercury Insurance Company to buy a law benefitting itself. This one allows auto insurers to raise the premiums of drivers who have had coverage lapses. The new income will enable insurers to offer new, cross-insurer continuous-coverage discounts in order to poach reliable policyholders from each other. Prop 33 will increase the number of uninsured drivers and unfairly penalize some who stopped carrying insurance for legitimate reasons.
Details: You may remember the ill-fated Prop 17 from 2010. I certainly do. Mercury Insurance poured $16 million into the measure, which would have allowed it to offer discounts to drivers who have had continuous coverage with other carriers. Seems harmless enough, until you realize that the discounts would have been subsidized by unjustifiable surcharges on drivers with a break in coverage. You can read my rating of Prop 17 to see why this was such a bad idea.
But why bother? Our friends from Mercury Insurance are back with a slightly modified version of Prop 17 that stinks just as much. It's called Prop 33. The same arguments apply, so I'll reprise them here.
Prop 33 (a wholly owned subsidiary of Mercury Insurance) would allow auto insurers to add a surcharge to the premium of anyone with a three-month break in coverage over the past five years. In states that currently allow this, the surcharge can reportedly be in excess of 200%. The surcharge will be needed to offset a new discount that Prop 33 will allow insurers to give to drivers who have had uninterrupted coverage with any carrier. Currently such a "loyalty discount" is permitted only for policyholders who stay with the same carrier.
[Prop 33 differs from Prop 17 by forgiving lapses due to military service, or due to layoff or furlough up to 18 months. It also offers partial relief from the surcharge for those who can show they were insured for at least one of the last five years. Nice try, Mercury, but your initiative still reeks.]
What's in it for Mercury? The opportunity to lure low-cost, loyal customers away from other insurers. These tend to be better drivers because of simple attrition: bad drivers, when faced with enormous premium hikes, shop around and move on. Mercury wants the ability to poach other companies' loyal drivers because they generally make fewer claims, so they cost the company less.
Hmmm. An insurance company that wants to insure only people unlikely to file claims. That sounds familiar. Didn't we just do something about that? Oh yeah, that was health insurers refusing coverage for patients with pre-existing conditions. Everybody agreed that was unethical and immoral, so Congress outlawed the practice. Why should it be different for auto insurers?
Many people who have had breaks in coverage have done so for perfectly legitimate reasons: they're new drivers, or have been away at college, or have been out with an illness. It would be unfair to penalize these drivers with the Prop 33 surcharge.
But even for those who just plain missed their payments, Prop 33 is a bad idea. Car insurance premiums should be based only on directly relevant data, such as drivers' records and miles driven. As the Los Angeles Times points out, this was the whole impetus behind Prop 103, the 1988 insurance reform bill. There's nothing about missing a premium payment that indicates you're a bad driver. If we pass Prop 17 and allow surcharges for lapses in coverage, it's a slippery slope to allowing them for anything else mathematically correlated with higher claims: changes of address, income level, medical history, ethnicity.
One last point: Our insurance system works best when everyone is insured. That's why car insurance is mandatory, after all. If Prop 33 passes, drivers who have lapsed because they simply couldn't afford the premiums will have an even harder time buying auto insurance. This will move us farther from our goal, not closer. It's also appallingly predatory—it's punishing the victim, and should have no place in our state.
Proposition 34: Repeal of the Death Penalty – YES
Summary: Even if you support the death penalty in principle, you cannot support the way it has been implemented in California. It is discriminatory, susceptible to error, and outlandishly expensive, wasting $200 million a year on special death row housing and extra legal expenses. Prop 34 will end this waste, as 17 other states and all enlightened countries have already done.
Details: In 2011 the Loyola of Los Angeles Law Review published a groundbreaking report on the death penalty in California. Highlights:
The death penalty is ineffective. There is no evidence of a deterrent effect on murder rates. According to a 2009 article in the Journal of Criminal Law and Criminology from Northwestern University, "Eighty-eight percent of the country’s top criminologists do not believe the death penalty acts as a deterrent to homicide ... Similarly, 87% of the expert criminologists believe that abolition of the death penalty would not have any significant effect on murder rates." It's time for the death penalty to go.
The death penalty is error-prone, as illustrated by the wrongful conviction of Franky Carrillo for a 1991 murder in Los Angeles County. His conviction was reversed in 2011, after twenty years behind bars, when all the witnesses who identified him admitted they had been unable to see the actual gunman, but were influenced by police to identify Franky anyway. It's time for the death penalty to go.
The death penalty is discriminatory. As a 2003 Amnesty International study put it, "...race, particularly race of victim, continues to play a role in who is sentenced to death in the USA." Nationwide, "Even though blacks and whites are murder victims in nearly equal numbers of crimes, 80% of people executed since the death penalty was reinstated [in 1976] have been executed for murders involving white victims." It's time for the death penalty to go.
The death penalty is agonizing for victims' families. Multiple proceedings and multi-year delays are hell on these poor people, who really just want closure but never get it. It's time for the death penalty to go.
The death penalty is barbaric. It has been abolished in Canada and Mexico; in all of Europe save Belarus and Russia; and in even in places like Angola, Bolivia, and Cambodia where you might expect to see "frontier justice." California is currently in a club with fewer than two dozen nations on Earth, mostly authoritarian regimes like North Korea, Iran, China, Saudi Arabia, Vietnam, and Yemen. Why can't we be civilized too? It's time for the death penalty to go.
Prop 34 will repeal the death penalty, effective immediately. All 724 inmates currently on death row will have their sentences commuted to life without the possibility of parole; this will also be the new sentence for all crimes that used to carry a death sentence. Prop 34 has a few other provisions, but they are really just window dressing. If Prop 34 passes, it will be time for the death penalty, finally, to go.
Proposition 35: Increase Penalties for Human Trafficking – NO
Summary: Human trafficking is a terrible crime. Thankfully it's already illegal. Should we increase the penalties? I don't know, and you don't either. Let's leave issues like this for the Legislature. Prop 35 is a vanity bill that has no place on your ballot.
Details: Human trafficking is among the most hideous of crimes. It is modern-day slavery. It robs people of their freedom, their dignity, their possessions, and everything else dear to them. It must be stopped.
But Prop 35 does not ask us to outlaw human trafficking. That is already both a state and federal crime.
Instead, Prop 35 asks us whether the current punishments for those convicted of human trafficking are severe enough.
Now, I don't know anything about the effectiveness of incarceration and fines, and in all likelihood you don't either. How do current and proposed punishments for human trafficking compare with those for, say, kidnapping, attempted murder, and child abuse? Will Prop 35's addition of seven years to the sentences of labor traffickers deter any crimes? How many sex traffickers will be put out of business because Prop 35 increased fines from $100,000 to $1.5 million? I have no idea, and neither do you.
We voters are the wrong people to ask. We have no way to evaluate this proposal objectively. Prop 35 will certainly pass in a landslide, because it gives voters the illusion they're striking back at horrible miscreants; who wouldn't want to do that? But this initiative has no business being on your ballot. That is why I oppose Prop 35. It is ballot abuse.
The initiative process was established 101 years ago in order to allow citizens to enact laws that the Legislature couldn't or wouldn't. For example, legislators might be so indebted to special interests that they are unable to pass laws about taxes, prisons, tobacco, gun control, and so on. Or legislators might be so self-interested that they give themselves undeserved privileges and perks. These are all legitimate areas for initiatives: citizens can pass laws the legislature won't.
But the provisions in Prop 35 are completely non-controversial. No legislator in his right mind would vote against them. The cost to the state is trivial. There is no organized opposition. (What, you were expecting the Benevolent Association of Slaveholders and Pimps?) This bill would sail through the Senate and Assembly on unanimous votes, and receive the governor's signature with great pomp, fireworks, and victory laps for all.
That would be the right way to handle this issue. But Prop 35 is the plaything of a Silicon Valley tycoon who has no interest in working through normal legislative channels like the rest of us. He has paid to put this measure on the ballot, and is funding the campaign to the tune of $2 million. Apparently he has political ambitions; if so, he is following some well-trod footsteps, including Abel Maldonado's Prop 1F (2009), Arnold Schwarzenegger's Prop 49 (2002), and John Van de Kamp's Prop 129 (1990).
Well, I resent that the sponsor of Prop 35 has the chutzpah to force 17 million voters to consider his vanity bill. Our ballots are too long already. We shouldn't have to spend time on issues the Legislature clearly could and would handle better.
The right people to make this decision are specialists in crime and punishment: law enforcement professionals, prosecutors and defendant advocates, judges and corrections officers, all advising the Assembly and Senate Committees on Public Safety. Not us. So I'm lodging a protest vote against ballot bloat. Vote "no" on Prop 35, and maybe next time we'll see fewer gratuitous propositions.
Proposition 36: "Three Strikes" Reform – YES
Summary: Under current “three strikes” sentencing rules, someone with two prior serious or violent felony convictions who is found guilty of a nonviolent third felony receives a life sentence. This is too harsh, and needlessly crowds prisons for decades with nonviolent offenders. Prop 36 would change sentencing for such third-strikers to double the usual term, unless the prior offenses involved sex, drugs or guns. This is a reasonable adjustment that will not compromise public safety.
Details: The "Three Strikes, You're Out" law, enacted in 1994, requires longer sentences for offenders with "strikes", which are previous convictions for serious or violent felonies. Those with one strike who are convicted of any new felony (it need not be serious or violent) receive double the usual prison term. Those with two strikes who are convicted of any new felony are sentenced to life imprisonment, with a minimum term of 25 years before becoming eligible for parole.
As a result, there are people in California prisons serving life sentences for nonviolent felonies such as vandalism (as little as $400 damage), burglary or fraud. To be sure, these people are not harmless, cuddly-wuddly teddy bears; each has two prior convictions for serious or violent felonies such as arson, robbery, kidnapping or manslaughter. Nevertheless, each has already paid the penalty for the first strike, and then paid double the penalty for the second, and then been judged safe enough to be paroled or released. Should a non-serious, nonviolent third strike, such as forgery, theft or receiving stolen property, brand that person an irredeemable sociopath who must be locked away for life?
Prop 36 says it shouldn't. Under Prop 36, if the third strike is non-serious and nonviolent, the sentence will be merely double the usual term, not life. Prop 36 will not change the law regarding serious or violent third strikes; those will still receive life sentences. And the life sentence will still apply if the first or second strike was for certain crimes involving sexual violence, drugs or firearms.
There are about 8,900 third-strikers in California prisons today. Roughly half of them are serving for a current offense that is non-serious and nonviolent (assuming the rates are comparable for second- and third-strikers). If Prop 36 passes, they will be eligible for resentencing under the new guidelines. The state estimates it can save on the order of $80 million a year by implementing Prop 36. More importantly, paroling these convicts will free up critically needed space in our horrendously overcrowded prisons.
Proposition 37: Labeling of Genetically Engineered Food – NO
NOTE: I have flip-flopped on this proposition. Before October 8th I recommended a "yes" vote, reasoning that the measure is harmless and potentially helpful. It's just labels, after all; what could be so bad about telling consumers what they're eating? However, I now see the enforcement provision is an invitation to an avalanche of nuisance lawsuits against retailers, who shouldn't have to be responsible for documenting every product without a GE label. —Pete
Summary: Prop 37 would require most food sold in stores that contains genetically engineered (GE) ingredients to be so labeled, much as packages today are labeled for dairy and nut content. It's innocuous enough to publish this data so consumers can avoid GE foods if they wish. However, Prop 37 imposes an unwarranted new burden on retailers. They must maintain a mountain of paperwork for non-labeled products, and they can be sued by anyone who suspects noncompliance. That burden is out of proportion to the benefits of labeling.
Details: Genetically engineered (GE, or genetically modified organism, GMO) foods are generally crops, such as corn, soybeans and wheat, that have had DNA inserted from other organisms. For example, there is a bacterium that produces a chemical that's poisonous to insect larvae: a pesticide. Scientists have isolated the responsible gene and spliced it into corn DNA. Now the GE corn produces its own pesticide, and is far more resistant to insect damage. Other examples include GE potatoes that contain a fish gene for antifreeze and are therefore frost-tolerant, and GE soybeans that contain a gene allowing them to tolerate the herbicide Roundup.
These crops, introduced to farms beginning in the 1990s, have become staples of American agriculture. It's easy to see why. GE strains can increase yields, reduce pest control costs, extend growing seasons, or allow cultivation of formerly non-viable fields. By 2009, 85% or more of the corn, soybeans, cotton and canola grown in the United States was GE.
The result is that as much as 80% of packaged foods sold in your local supermarket contain GE ingredients: basically, anything non-organic with corn or soy in it. USDA standards prohibit such foods from using the word "organic" in their labeling. Prop 37 will also prohibit use of the word "natural." This is sensible. After all, what could be less natural than a fish gene spliced into a potato?
For packaged foods with GE ingredients, Prop 37 will require a new label, "Partially Produced with Genetic Engineering." The label would appear on the back of the package, presumably near similar notices regarding allergens such as peanuts and dairy. It will be easy for consumers to ignore this label, just as they ignore today's labels detailing ingredients, Nutrition Facts, Kosher classification, and so on. The GE information will be there for those who care, but it won't get in anyone else's way.
For unprocessed foods, such as raw produce, Prop 37 requires a blunter label, "Genetically Engineered," printed clearly and conspicuously on the front of the package or, if sold loose, displayed on the bin. Here is where Prop 37 gets in your face. Until now, markets have gotten away with pleasant euphemisms like "Conventionally Grown" for their non-organic produce. Under Prop 37, "Genetically Engineered" it shall be; no more beating around the bush. (Actually, following the introduction of an orangutan gene, the bush can now beat around itself.)
At this point in my earlier rating in favor of Prop 37, I had a beautifully constructed disquisition on whether the prominent GE warning labels are justified by scientific studies. I hated to cut it, but it's no longer relevant. That's because I have come to see that the enforcement provisions of Prop 37 will cause so many problems that quibbles about labeling are insignificant.
Prop 37 will require retailers to document the lack of GE ingredients for any product they sell that does not carry GE labeling. This means that retailers will have to inspect the GE labeling of everything they sell, and maintain a mountain of verification paperwork to protect themselves from lawsuits. And lawsuits there will be. The measure allows anyone to sue suspected violators, and after 2019 there would be zero tolerance for small amounts of unintentional GE ingredients. It will be a nuisance-suit lawyer's dream.
This is an unreasonable burden to impose on retailers in the name of consumer disclosure. They will be forced to pay for insurance against GE-mislabeling lawsuits, worker time wasted examining product packages for compliance, and office time wasted obtaining and filing supplier statements. And, hey, why are the retailers held responsible? Shouldn't the suppliers be liable if they mislabel their packages?
I might accept all of this if GE mislabeling presented a clear and present danger of illness, injury or death, like an anaphylaxis reaction to peanuts. But it doesn't. GE foods have been around nearly twenty years, and no short-term health effects have been identified; otherwise these foods would have been banned long ago. As for long-term effects, the science is inconclusive. Informative labels are a good thing, but unless there is a documented risk of harm, there is no justification for imposing such high costs on food retailers.
It pains me to oppose Prop 37. The required labels themselves would be harmless, and would increase awareness of GE foods, which will only become a more important issue as time goes on. Sadly, though, the onerous burden Prop 37 imposes on retailers is an unacceptable price to pay for such an intangible benefit.
Proposition 38: see Propositions 30 & 38, above
Proposition 39: Closing Tax Loophole for Multistate Businesses – YES
Summary: Prop 39 reverses a $1 billion-a-year gift that legislative leadership gave to multistate businesses in 2008. It will ensure these corporations once again pay their fair share, and provide some relief from our ongoing budget crisis. I like that. Prop 39 also creates a five-year, $2.5 billion program of green energy projects. It's ballot-box budgeting, and I hate that. But the program is only temporary, and we really need the revenue and the fairness, so I'm holding my nose and voting "yes."
Details: Prop 39 rolls back one of three corporate tax breaks that were adopted with virtually no hearings or debate as part of the hastily-approved, months-late budget in September, 2008. You remember September, 2008: it was the month that Lehman Brothers went bankrupt, Fannie Mae and Freddie Mac were nationalized, AIG melted down, and Merrill Lynch, Wachovia and Washington Mutual all disappeared.
California was facing a $15 billion budget deficit. Part of the solution proposed by Arnold Schwarzenegger's Department of Finance was an accounting gimmick known as "revenue accelerators", the speeding up of tax and withholding collections from individuals and corporations. These accelerators—little more than smoke and mirrors—somehow bridged several billion dollars of the budget gap. But corporate interests (read "Republicans") opposed them because they would mess with cash flows. In order to placate them, three tax breaks were cooked up, to take effect in 2011, far in the future. "By then this whole recession thing will have blown over," I'm sure all the legislators in Sacramento were thinking. "Or at least I'll be termed out and it will be someone else's problem!"
One of these three tax breaks allows multistate corporations to choose the more favorable of two formulas to determine their taxable income. This has reduced corporate taxes by some $1 billion annually. (Incidentally, it has also incentivized companies to move jobs and offices out of California.) Seems like fine compensation for agreeing to those revenue accelerators four years ago.
Here's the problem: Those revenue accelerators were one-time-only, but the tax breaks are forever. What justification is there for continuing these tax breaks beyond 2011? None whatsoever. Quoth state Treasurer Bill Lockyer back in 2008: "This giveaway makes the budget a massive corporate boondoggle that does nothing to fix our structural deficit and, in fact, will make it substantially worse."
Prop 24 on the November, 2010 ballot would have repealed all three tax breaks, but it failed after an epic, $30 million campaign pitting teachers and school advocates against Genentech, Cisco, Viacom, General Electric, Time Warner, Disney, News Corp., and more. Prop 39 on this ballot will repeal just the one tax break described above, restoring $1 billion to the General Fund.
(Strangely, there appears to be no organized opposition to Prop 39. The Secretary of State has recorded no contributions, and the opposition Web site is just a shell. I don't know what to make of that.)
For the first five years, Prop 39 earmarks half of the $1 billion it raises to a special green energy program. It would fund energy efficiency retrofits and alternative energy projects for schools and other public buildings, as well as related job training. This, of course, is budgeting by ballot box. My regular readers know I can't stand budget set-asides like this: they distort state priorities and limit the Legislature's flexibility. Prop 39 is particularly egregious because the measure's sponsor and virtually its sole contributor is a hedge fund manager heavily invested in energy companies. This set-aside amounts to a $2.5 billion subsidy of his companies over the next five years, at the expense of schools, public safety, state parks, and all the other things we could be funding.
As furious as that makes me, however, I would be even more incensed if Prop 39 were to fail. Over the past three decades, California's tax burden has shifted dramatically from corporations to individuals. The Department of Finance estimates that while corporate tax receipts have shrunk from 15% to 11% of General Fund revenues since 1980, personal tax receipts have grown from 35% to 53%. Failure of Prop 39 would make this disparity even worse. Think of voting for Prop 39 as your way of putting the tax burden ever-so-slightly back into balance.
Proposition 40: Reaffirm State Senate Districts – YES
Summary: This is a referendum on the fair and reasonable State Senate districts created by the bipartisan, independent Citizens Redistricting Commission. If Prop 40 passes, we keep these districts; if it fails, they're rejected. Republicans placed Prop 40 on the ballot in hopes that it would fail and they'd get a new, more favorable map in time for the 2012 election. But courts have indicated that the new map wouldn't be ready until 2014, and would be nearly identical to the current map anyway (since it would be based on the same census data). Even the Republicans recognize that would be stupid, and have dropped their "No on 40" campaign. Vote "yes" to avoid stupidity.