FLASHREPORT

The FlashReport 2006 General Election Ballot Measure Voting Guide

With the assistance of Bill Leonard, Member of the State Board of Equalization, the FR is pleased to provide readers with this guide on how to vote on the ballot measures on the November 2006 ballot. October 23, 2006

The FlashReport 2006 General Election Ballot Measure Voting Guide

With the assistance of Bill Leonard, Member of the State Board of Equalization, the FR is pleased to provide readers with this guide on how to vote on the ballot measures on the November 2006 ballot.

October 23, 2006

WE ENCOURAGE YOU TO SEND THIS VOTER GUIDE TO ANY OF YOUR FRIENDS, FAMILY, COWORKERS AND NEIGHBERS.  YOU HAVE OUR PERMISSION TO CUT AND PASTE IT INTO YOUR OWN E-MAIL -- IN FACT, WE ENCOURAGE YOU TO DO JUST THAT!

This year's General Election contains a whopping 13 different measures on the statewide ballot, in addition to all of the candidates running for statewide office.  The overall theme seems to be "It's all about spending..." with five of the ballot measures being for massive borrowing to spend, and another four raising massive taxes to do even more spending.  We here at the FlashReport believe that there is too much money being spent by politicians in Sacramento, and urge readers to reject all nine of these spending measures.  There are four important yes votes to cast on the ballot measures -- one to make sure that gas tax proceeds must be spent on transportation issues, one to crack down on sex offenders, one to require that parents be notified before an abortion is performed on their minor child, and one to curb the abuses of eminent domain.

We are pleased to announce that for the official FlashReport 2006 General Election Voter Guide, we have partnered up with Board of Equalization Member Bill Leonard, who happens to share our positions on all of the measures, and has taken the time to pen an analysis for each of them.  Before his election to the Board of Equalization in 2002, Bill Leonard served in both the State Assembly and the State Senate, serving for a time in the Assembly as Republican Leader.

So, without any further words, here is the Voter Guide:

BALLOT MEASURES NOVEMBER 2006 - SUMMARY
The FR and Bill Leonard recommend:

Proposition 1A = YES
Proposition 1B = NO
Proposition 1C = NO
Proposition 1D = NO
Proposition 1E = NO
Proposition 83 = YES
Proposition 84 = NO
Proposition 85 = YES
Proposition 86 = NO
Proposition 87 = NO
Proposition 88 = NO
Proposition 89 = NO
Proposition 90 = YES

*** Prop. 1A: Close the Loophole***
THE FLASHREPORT URGES YOU TO VOTE YES ON PROP. 1A

Bill Leonard writes...

Three years ago, a majority of California voters overwhelmingly approved Prop. 42. Voters were tired of our roads and highways lagging in upkeep, much less building new byways that we desperately need as our population and economy grow. Prop. 42 dedicated the existing state sales tax on gasoline to our roads and state transportation system. Despite that very clear and overwhelming message sent to Sacramento politicians by Californians, they continued to steal money from state transportation projects to pay for other programs. In the three years since Prop. 42 was passed, they stole another $2.5 billion! Prop. 1A seeks to close the loophole that let such thieving continue unabated and requires repayment of that $2.5 billion. It does allow a common sense clause allowing loans in the event of fiscal emergency, but it puts safeguards in place to prevent abuse: no more than two loans in any ten year period, and no new loan until the previous loan has been repaid. Prop. 1A will let us get started on the backlog of transportation projects, and it will finally put into practice the will of the voters: the taxes we pay at the pump should go to help improve and expand the roads on which we drive. I urge a YES vote on Prop. 1A.

***Prop. 1B: Little for Roads, Lots for Government***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1B

Bill Leonard writes...

Proposition 1B on the November ballot breaks the record for all previous bonds in California. In fact, at $19.925 billion in principal, it holds the dubious distinction of being the largest bond ever placed before the voters anywhere in the world, even at the national level. If it is approved by voters, future taxpayers will have to pay back well over $40 billion.

By my count, 32% of the funds in this bond are dedicated to funding "highways and roads," which also includes funding for studies, environmental reports, environmental mitigation, and other things that people outside California would not consider road-building. 25.1% of the bond funds are explicitly dedicated to public transit systems that are used by approximately 1.4% of the state's population. 15.6% of the funds are dedicated ports and port security. 1% is dedicated to school buses. The remaining 26.3% is difficult to characterize, but most will be available for public transit systems. This category includes funds that will be spent according to such things as applications from cities and counties for transportation improvements, which might be either roads or public transit.

A good case can be made that we need to invest substantial tax dollars in our inadequate highway system. However, I am not convinced that we need to borrow money from our grandchildren to do so. Our fuel and vehicle taxes are among the highest in the nation, so we need to demand that those taxes be dedicated to roads and highways. Public transit systems have proven themselves to be outrageously expensive, inefficient, and unpopular, so they require massive on-going taxpayer subsidies from people who never use public transit. Before we borrow billions of dollars for new public transit systems, we should find a way to use existing revenues to fund road and highway improvements. I urge a NO vote on Proposition 1B.. 

***Prop. 1C: A House Without Walls***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1C

Bill Leonard writes...

Proposition 1C is a $2.85 billion general obligation bond placed on the ballot with the goal to finance low-income housing and related programs, such as transit-oriented development. There are two issues which the bond sponsors cannot overcome and which argue for its defeat even while we all agree that housing is too expensive in California. The first issue is that the bond benefits are not limited to Californians. In fact it is certain that illegal aliens will be among the beneficiaries of this public largesse and taxpayer support. Is there any reason to expand the government benefits available to illegal aliens?

The second issue is even broader. There is no shortage of capital in the housing market. This bond would provide financing but financing is available by thousands of lenders for all kinds of housing at competitive rates which are still relatively low. In other words the bond is not needed and will not measurably add to the housing supply because the barriers to housing construction are not financial.

$2.85 billion is a great deal of money, but it is insignificant compared to the multi-trillion dollar housing stock in California. At best, this bond will provide housing for a few thousand families, which is less than a month's worth of population growth. This is not even a drop in the bucket! Developers, builders, and bureaucrats will make money from this bond, and a few lucky people will obtain government sponsored housing, but the impact on California's overall housing market will be too small to measure.

Government itself is largely responsible for the high cost of housing in California, but this ballot measure does nothing about that. In the few places where new houses are allowed, state and local governments place tens of thousands of dollars in taxes and fees and mandates on each new house. Builders are forced to overcome so much bureaucratic red tape that it can take years and years for them to obtain building permits. Allowing builders to build would cost nothing and it is the most effective way to address the shortage of affordable housing.  Please join me in voting NO on Proposition 1C.

***Prop. 1D: School Deal Broken***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1D

Bill Leonard writes...

Proposition 1D is a $10.416 billion bond placed on the ballot by the Legislature. The funds will pay for new school construction as well as maintenance and repairs to facilities from the kindergarten to the university level. This is the fourth in a recent string of massive school bonds: Prop. 1A in 1998 for $9.2 billion, Prop 47. in 2002 for $13.05 billion, and Prop. 55 in 2004 for $12.3 billion. If Prop. 1D passes, we will have borrowed $45 billion for schools in just eight years!

I supported all the prior school bonds but no more. The educrats convinced the voters a few years ago that the 2/3 vote for local school bonds was insurmountably high (a lie, by the way) so the vote requirement was downgraded to 55%. What I supported was an arrangement of local school bonds passed with a 2/3 vote, local fees on new homebuyers that were capped to control excessive taxation, and state bonds passed by the voters. With the 55% low threshold for school construction this arrangement has been broken and is no longer necessary.

It is now easily feasible that every school district with true construction needs will be able to convince their own local voters to raise their own local property taxes to pay for the new schools. The local property tax is also fairer than the use of state taxes as the payers of the tax will be property owners in the same community that gets the school construction. And, of course, property taxes are deductible on your state income taxes.

This bond would have no connection between those who pay for the bond and those who benefit from it. Many school districts will receive no funding at all. Vote NO on Proposition 1D.

***1E: Money Down the Drain***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 1E

Bill Leonard writes...
 
Proposition 1E is known as the “Flood Bond,” a $4.09 billion general obligation bond placed on the November ballot by the Legislature to be paid with interest from General Fund taxation. The bond was proposed to fund flood control and environmental projects, but there is not one specific project named in the text. You are asked to trust the Legislature and the Governor to spend this money as they see fit.

In fact, despite the huge cost, this bond contains only enough funding to repair or rebuild a few dozen miles of levees, in a state with more than 2,000 miles of levees that need maintenance. A break anywhere along a levee will flood the land down stream, so it is not clear how much extra protection we are really buying. Critics have argued that it would be cheaper to build pipelines and canals to deliver drinking water, such as the Peripheral Canal, than it would be to continue to maintain the Delta levees, which primarily protect private farmlands growing subsidized crops on land that is sinking further below sea level every year.

I still prefer the pay-as-you-go approach to save all the interest money from being squandered. If we really have $8 billion over the next 30 years to spend on flood protection, then why set aside $3.9 billion of it for interest payments with no benefit to California? Vote NO on Proposition 1E.

***Prop. 83: Jessica's Law - Common Sense for Sex Offenders***
THE FLASHREPORT URGES YOU TO VOTE YES ON PROP. 83

Bill Leonard writes...

By now you have probably heard about Proposition 83, known as Jessica’s Law. The publicity surrounding the measure have focused on the need to close loopholes that allow sex offenders to get off easy, track registered sex offenders using GPS technology, and keep registered sex offenders from living within 2000 feet of schools or parks during their registration. But Prop. 83 does much more than those worthy actions. It eliminates the use of “good-time credits” that allow violent sex offenders to get of prison early. It finally allows district attorneys to charge people in possession of child pornography with a felony. It allows sex criminals to be evaluated and classified as sexually violent predators after just one crime, while current law sadly waits for a second victim before doing such an evaluation. It imposes additional penalties for criminals who use “date rape” drugs. It creates parole terms of up to ten years for the worst sex offenses. Prop. 83 is filled with harsh treatment for the worst sex offenders and those who prey on and exploit our children. Please join me in voting YES on Prop. 83.

***Prop. 84: Special Interest Hidden Agenda Bond***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 84

Bill Leonard writes...

Proposition 84 is an enormous $5,388,000,000 bond that was placed on the November ballot through the initiative process by liberal special interests that stand to receive taxpayers’ money from the bond. I consider this an abuse of the initiative process. It is not only a bad idea; it should be illegal.

Unlike the other bonds, which are vague about the projects that might be funded, the proponents of Proposition 84 made so many log-rolling promises to their self-interested supporters that this bond now resembles the notoriously corrupt “Ham and Eggs” initiatives of the 1930s that led to the Single Subject Rule for initiatives. This measure surely violates that constitutional rule, unless you consider “government spending” to be a single subject.

What is most troubling, the proponents call Prop. 84 a “water bond,” even though it contains no funding at all for new reservoirs, dams, canals, aqueducts, or water storage. There is some funding for more studies, just in case someone thinks that government studies produce water.

It is also called a “flood bond” even though it allocates less than 15% of bond funds for flood control projects (and even these meager funds might be squandered on bureaucratic studies, environmental planning, and environmental mitigation, rather than building any actual levees).

If you read the text carefully, you will notice that the sponsors cleverly exempted Proposition 84 from Legislative oversight and from audits by the State Controller, the State Auditor, and the Legislative Analyst. Bond programs would even be exempt from the normal review by the Office of Administrative Law under the Administrative Procedures Act. Before voting for a bond like this one, I think people should demand to know why the proponents are trying to avoid any public oversight over a plan to spend nearly $11,000,000,000 in principal and interest over the next 30 years.

I am also concerned that Proposition 84 contains statewide funding for local projects that have no real statewide benefit. Local communities should be expected to pay for local facilities in the normal manner. This kind of statewide bond creates a situation where taxpayers throughout the state will be forced to pay for expensive projects in politically-influential districts, without regard for statewide priorities and without statewide oversight. This makes no sense.  I suggest a NO vote on Proposition 84.

***Prop. 85: Common Sense for Parents***
THE FLASHREPORT URGES YOU TO VOTE YES ON PROP. 85

Bill Leonard writes...

Proposition 85 will sound familiar to those who voted in last year’s special election. It is a reworking of Prop. 73, which lost 53-47%. The idea behind the measure is straightforward: should parents be informed before their child undergoes a serious surgical procedure? Keep in mind that parents must give permission before a child can take an aspirin at school, yet it is currently legal for young ladies to undergo abortions without their parents even knowing they are leaving school for the day.

Instead of tangling this idea up with the controversial issue of abortion, though, think about it from a common sense perspective. The parent/legal guardian of a child is responsible financially, legally and physically for that child. How can that parent exercise that responsibility if medical professionals are allowed to undertake a complex, dangerous medical procedure without the parent knowing?

Prop. 85 has also incorporated some of the suggestions that arose in last fall’s campaign. For example, parents can sign a standing waiver granting permission for their daughter to have an abortion at any time without specific notification. The point of this measure is common sense protection for California’s parents and for their children. Please join me in voting YES on Prop. 85.

***Prop. 86: Corporate Welfare Funded by Tobacco Taxes***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 86

Bill Leonard writes...

Proposition 86 is one of the most disturbing initiatives on a ballot that is already crowded with bad ideas. This initiative would increase the state excise taxes on each pack of cigarettes from 87 cents to $3.47 (not counting sales taxes), making California’s cigarette taxes the highest in our entire hemisphere. The bulk of the new tax revenues would be permanently dedicated to the corporate hospitals that placed this measure on the ballot. This kind of self-interested, law-making-for-profit represents a corruption of the initiative process and we must not allow it to succeed.

It appears that the proponents want the money, which means they really do not want smokers to quit. These are permanent, on-going programs that are being created under this proposition that will generate their own demand for funding even if smokers stop buying. In one sense it is a tobacco tax increase today and a general tax increase tomorrow.

As a BOE member I am sworn to uphold the tax laws so if this measure passes I will enforce it. But I give warning now to the Governor and the Legislature that the anti-smuggling allocations in Proposition 86 are totally inadequate to address the looming problem. Artificial price increases like this are an incentive to smugglers to evade the law. Without a fully funded law enforcement budget the smugglers will win.

The state taxes on just one truckload of cigarettes would exceed $2 million! For every carton of cigarettes smuggled into California, the state would lose more than $37. Imagine how many cartons a typical car could bring across the border from Medford, Reno, Yuma, or Tijuana. The possibility of earning thousands of dollars per trip will turn many people into smugglers.

This corporate hospital sponsored measure also ignores the big pending public policy issue of illegal aliens. The new programs created under this measure are not limited to Californians. The on-going debate is to what degree California’s generous health and welfare programs serves as a magnet for illegal border crossings. Is now the time to be expanding these programs? And should general health expenditures be tied to a tax like the tobacco tax that may not deliver on its revenue projections? As tobacco tax revenues decline, the Legislature will be forced to fund these programs from new taxes.  Please join me in voting NO on Proposition 86.

***Prop. 87: Aren't Gas Prices High Enough Already?***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 87

Bill Leonard writes...

Proposition 87 is one of the most hare-brained schemes to reach the statewide ballot in quite a while. This poorly-drafted initiative would create an oil severance tax of up to 6% that would only apply to oil extracted from California wells, which means that we will become even more dependent upon oil imports.

There are too many technical problems to mention here, but I want to focus on a few that relate to the Board of Equalization, which would administer this new oil severance tax. In the first place, the proponents claim that the initiative requires the Board to prevent the oil companies from passing the tax along to "consumers" through higher gas prices. Of course, this is impossible, even in theory. Oil sellers set their prices subjectively, according to the law of supply and demand. Even the most sophisticated accountants cannot prove whether individual sellers increased their prices because of a new tax, or in response to higher labor costs, anticipated demand, or an unlimited number of other reasons. The initiative is so poorly drafted that it appears that people buying gasoline are not even the "consumers" who would be protected anyway; instead, the anti-pass-through provisions only prevent oil drillers from passing the new severance tax along to oil refiners and oil distributors (who may have common ownership). People who need gas to get to work have no protection from inevitable price increases if this passes.

This initiative will take a big bite out of state and local revenues. A 6% oil severance tax makes California oil artificially more expensive than foreign oil, so our oil producing properties will be SIGNIFICANTLY less valuable and I can guarantee you that oil companies will petition for a property tax reduction based on this change in value. This new tax will cause many marginal California wells to stop production entirely. Under the California Constitution and Board of Equalization regulations, when the value of oil producing properties declines, property taxes will be reduced. This means a property tax cut for California oil companies and reduced revenue for local governments.

California already taxes oil and its products at some of the highest income tax and excise tax rates in the country. While other states and nations have gone to great lengths to promote their domestic oil producers, I find it ironic California voters are being asked to put our industry out of business, in return for so little. Were it not on the ballot, no one would take Proposition 87 seriously.  Please join me in voting NO on Proposition 87.

***Prop. 88: Another Attack on Prop. 13***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 88

Bill Leonard writes...

Proposition 88 is perhaps the most ambitious measure on the November ballot because it seeks to overturn key taxpayer protections in Proposition 13 in order to create a new kind of tax. Actually, the parcel tax is not a new idea, since it is the oldest tax in California's history as a state. However, since 1910, property taxes have been dedicated to local governments, rather than state government so a statewide parcel tax is an unprecedented expansion of taxation.

The tax created by this initiative would cost $50 per year for each and every non-exempt parcel in the state, regardless of its size or value or usage. A mansion on a 500-acre parcel or a $300 million factory would pay the same $50 as the owner of a vacant parking space in a mobile home park. This seems a bit unfair, to say the least. Property owners who are 65 years old or older and those who are severely and permanently disabled are theoretically exempt from this new tax, but the initiative says nothing about how someone might claim this exemption or how claims would be audited. Property records do not reveal the owner's age or level of disability, so county assessors are justifiably concerned about how they will be expected to implement this exemption. The initiative sets aside only 0.2% of the tax revenues (less than $1 million per year, statewide) for county tax assessors and tax collectors to assess and collect this statewide tax, explain it to taxpayers, approve and monitor exemptions, resolve tax appeals, etc. I have no idea how this meager allocation will be divided among the 58 counties or among various departments within counties, but I assure you that implementing this new kind of tax will cost far more than $1 million per year, so other tax revenues will have to be diverted for this purpose.

Despite the universal nature of this statewide parcel tax, the Legislative Analyst predicts that it will bring in only $450 million each year. And even if all of this gets to classrooms this is a drop in the bucket compared to total school spending, so it seems unlikely to make any difference. This amounts to an 85/10,000 increase in school spending.

Of course, the money from Proposition 88 will have a great many strings attached and every teacher will have new responsibilities if it passes. Teachers’ are already too overburdened with state mandates. I urge a NO vote on Prop. 88.

***Prop. 89: Tax Increase to Benefit Politicians***
THE FLASHREPORT URGES YOU TO VOTE NO ON PROP. 89

Bill Leonard writes...

I have lost track of how many attempts have been made in recent years to “fix” the electoral system by tinkering with campaign finance. We have tried various contribution limits and other artificial devices, but the result has not been more satisfying campaigns or outcomes. Indeed, another tinkering measure is before us on the November ballot with the proponents’ campaign arguing that their measure will finally fix all that is broken with candidates, campaigns and political money. They are, as ever, mistaken. (They, in this case, are the California Nurses Association and the Foundation for Consumer and Taxpayer Rights, which is a front group for trial lawyers.)

Prop. 89 creates a scheme that requires candidates for legislative and statewide office to limit the campaign contributions they receive in return they will get taxpayer dollars to run their campaign.

Where does that public funding come from? A tax increase, of course. Prop. 89 will actually increase the income tax rate on businesses. Of course high business taxes get passed along in the form of higher prices so this is really a tax increase on all of us.

Not only does this mean you will be paying for every politician to campaign, but the measure also proposes giving all of them who get elected a taxpayer-funded slush fund of $50,000 or $100,000 each year they are in office to cover expenses. Now, believe me, there are expenses involved with serving in elected office, but I do not believe it is the taxpayers’ responsibility to pay them for me.

Prop. 89 will no more solve what people dislike about campaigns and politicians now than have any of the other measures we have endured over the years. I return again to the only viable, fair and practical solution: require all money donated to and collected by campaigns to be reported electronically within 24 hours. The press and public will have access to this information and be able to draw their own conclusions about the money. In the meantime, please join me in voting NO on Proposition 89.

***Prop. 90: Protect Your Home***
THE FLASHREPORT URGES YOU TO VOTE YES ON PROP. 90

Bill Leonard writes...

Proposition 90 is perhaps the most important measure on the November ballot and its impact might ultimately rival that of Proposition 13 from 1978.

First, Proposition 90 would amend the California Constitution to prohibit state and local government from taking private property from one private owner and transferring it to another private owner for private use.  In other words, government could not take your home and sell it to a developer to build a shopping mall or golf course or more expensive homes.  That kind of abuse has become increasingly common in California and entire industries have been established to help rich people get richer by taking private property from one owner and transferring it to someone with more political power.  Whether they call it redevelopment, urban renewal, or smart growth, the concept is the same.  If Prop. 90 were to pass, that sort of abuse of power would be outlawed.

Last year's infamous Supreme Court decision in Kelo v. City of New London called nationwide attention to this problem because the narrowly divided Court declared that the city could legally take well-maintained private homes and demolish them, then sell the land to private developers to build a for-profit hotel and other private facilities on the site.  This decision is contrary to the traditional understanding of the Fifth Amendment to the United States Constitution, which contains the phrase known as the Takings Clause: “nor shall private property be taken for public use, without just compensation.”  The Kelo decision made it clear that there is nothing to prevent government from taking property for private use, rather than public use.  If effect, the Supreme Court majority has declared that unless Prop. 90 passes we are all just one city council vote away from losing our homes to developers with more money and more influence.

The City of Oakland recently provided an example of the need for reform by condemning Revelli’s Tires to make room for a private development that will include a Sears Tire Store.  John Revelli, who had owned Revelli’s Tires since 1949, has been unable to find another location for his business.  Taxpayers' money was spent to shut down one successful tire store so that a different tire store could be opened at the same location.

The second key provision of Prop. 90 would force governments to compensate property owners when government regulations result in substantial economic loss to private property, unless those regulations are taken to protect public health and safety.  Opponents have called this a "taxpayer trap," but they ignore the fact that the Takings Clause and current law already requires compensation for the same kinds of “regulatory takings” to which this provision applies.  Setting aside the legal debate, I believe that it is moral and proper for governments to compensate property owners when regulations significantly reduce their property values.

If government officials are so concerned about having to compensate the property owners injured by their regulations, perhaps they should change their behavior and avoid passing so many regulations that damage property values, especially when their regulations are not designed to protect public health and safety.  I urge you to ignore the opponents' efforts to confuse the issues and join me in voting YES on Proposition 90.  This may be the most important property rights measure to reach the ballot in a generation.