CFC’s November Ballot Recs: Corporate Interests vs. The Public Good

by Zack Kaldveer, Consumer Federation of California, California Progress Report

The June defeat of Propositions 16 and 17 was welcomed news for Californians fed up with the use of the initiative process to advance narrow corporate interests. The lavish spending by PG&E ($46 million on Prop 16) and Mercury Insurance ($17 million on Prop 17) to increase their bottom lines at the public’s expense only confirmed voters’ suspicions that greed was the real motivating factor behind those measures. Despite PG&E outspending opponents 575 to 1, and Mercury Insurance its opposition 12 to 1, a slim majority of voters saw through the pitch these snake oil salesmen were making, rejecting each by a margin of 4 to 5 points.

Unfortunately for California, June’s election results have not served as the deterrent  some may have hoped. November brings a new crop of initiatives bankrolled by  some of our nation’s most notorious polluters and corporate bad actors. Similarly, initiatives placed on the ballot to benefit the public will face the typical wall of opposition from big business interests willing to spend tens of millions of dollars on slick and deceptive campaigns with a singular purpose: mislead the voters.

No on Prop 26 ‘ Polluters Want Taxpayers To Clean Up Their Mess

Exxon Mobil, Chevron, ConocoPhillips, Philip Morris, MillerCoors, Anheuser Busch and other oil, soft drink and alcohol companies spent over $2 million to qualify Prop 26 for the ballot ‘ with millions of dollars more sure to keep pouring in as the campaign progresses.

The measure would shift the burden of cleaning up pollution or remedying harm to public health off of industry and onto the backs of California taxpayers.

Under current law, it takes a simple majority of the legislature or a local government agency to levy a mitigation fee on a business activity that harms the environment, public health or safety. Prop 26 would reclassify these fees as taxes, which would require approval by two-thirds of the legislature for state fees (an almost impossible task), or by a two-thirds majority vote in an election for many local fees.

Examples of existing fees that would have required a two-thirds vote under Prop 26 include fees on paint manufacturers to test children for exposure to lead paint, and fees on oil companies to enforce used oil recycling programs. 

Fees used for pollution clean up, public safety, public health, and education would also be jeopardized. Even fees used to prevent underage drinking have been labeled by proponents as a ‘hidden tax." If big businesses don’t pay to mitigate the harm they cause, taxpayers will pick up their bill.

But that’s not all. The measure was written to apply retroactively to fee changes imposed after January 1, 2010. According to the Legislative Analyst’s Office official summary of Proposition 26, this clause would blow an additional billion dollar hole into the current state budget by annulling the ‘Gas Tax Swap’ enacted in March.

Because this adjustment to the amount of gas tax levied on distributors and motorists did not raise the total amount of taxes collected, it did not require a two-thirds supermajority of the legislature to win passage, but it did free up an additional one billion dollars a year for the state general fund. In other words, if Prop 26 passes an additional billion dollars will be taken away from our schools and public safety.

A broad and growing coalition of environmental, health, public safety, consumer, civic, and senior groups are opposing Proposition 26, including the League of Women Voters, American Lung Association of California, California Federation of Teachers, Sierra Club, California Nurses Association, Consumer Federation of California, California Labor Federation, and California Alliance for Retired Americans.

Proposition 26 is nearly identical to Prop 37 which appeared on the ballot in 2000. A coalition of public interest groups – just as they have joined forces again this year – defeated that measure by a margin of four points despite being outspent 30 to 1 by a campaign that united big oil, big tobacco and big alcohol in a common "toxic" purpose. This time around, that financial disparity could be even greater, as the same corporate interests are already pumping millions of dollars into Prop 26’s campaign coffers.

Here’s a question every voter should ask themselves before marking their ballot, "Who do you trust when it comes to your health, your environment, and your safety: Chevron, Phillip Morris and Coors or the American Lung Association, the League of Women Voters, and the California Professional Firefighters?

No on Prop 23 ‘ Texas Oil Companies Against Emissions Reduction

Texas-based oil refiners Valero and Tesoro rank near the top of the list of the world’s worst polluters, and they don’t like a California law that would force them to reduce their carbon emissions. That’s why these notorious enemies of public health are such generous contributors to Prop 23, which would halt AB 32, California’s landmark global warming emissions reduction law, until unemployment in our state falls below 5.5% for four consecutive quarters (a near impossibility).

It’s a smart investment when considering that Tesoro and Valero rank 24th and 28th respectively among the nation’s dirtiest companies, according to a recent University of Massachusetts study. Let’s face it, clean air and clean energy are bad for Big Oil’s bottom line.  

While refineries that profit off of a status quo that is endangering our species very survival want us to believe that efforts to address the global warming crisis hurts jobs, according to recent polling by the Public Policy Institute of California, a majority of Californians disagree. On the contrary, the evidence is clear: stronger global warming laws spur the creation of new green energy industries. With AB 32, California is poised to be a world leader in creating green technology jobs.

Prop 23 would be a disincentive for green industries that are currently growing at ten times the rate of overall job creation in our state. The measure would strip California of its rightful place as the nation’s leader in innovative, bold, and forward thinking solutions to some of the most intractable environmental challenges.

As one of the world’s largest economies, and a leading emitter of greenhouse gases, California shouldn’t be relegated to the back of the pack when it comes to confronting perhaps the greatest threat humankind has ever known. Stifling innovation and progress just isn’t the California way. Facing the climate crisis with resolve, courage and ingenuity is a reasoned, preferable tact, and the only worthy option for our state. But to do that, Prop 23 must be defeated.

Yes on Prop 24 and 25 ‘ Restoring (some) Tax Fairness, Ending the Budget Madness

California is one of only three states that require a two-thirds legislative majority to approve a budget. This undemocratic rule empowers a small minority of ultra-conservative legislators to hold the budget hostage to their ‘cuts’only’ demands year after year. As California teetered on the brink of insolvency, in order to keep fire stations, schools and health clinics running, the majority party was forced to approve supersized tax breaks for big corporations, while raising taxes on workers and retirees.

In budget deals in 2008 and 2009, the minority party jammed through last minute tax cuts for the state’s most profitable corporations worth nearly $2 billion in perpetuity. These tax cuts were approved without any legitimate legislative hearings.

Proposition 24 would repeal this backroom corporate giveaway. For good reason too: according to the Legislative Analyst’s Office, corporate taxes accounted for 15.4 percent of the general revenue collected by California in 1976, but once these tax breaks take full effect in 2014, corporations would account for only 9.4 percent of general tax collections.

These tax giveaways mostly benefit large interstate corporations, providing almost no help to small business. And this corporate welfare is not tied to job creation or other changes that would help our state’s economy. The wealthiest corporations reap a windfall for maintaining business as usual while funding for education, health services, and public safety suffer draconian cuts at a time they’re needed most.

Proposition 25 would change the rules from a two-thirds super-majority to a simple majority of the legislature to enact the budget. The current two-thirds super-majority required to increase taxes would remain unchanged under Prop 25. If Prop 25 were the law in 2008 and 2009, California’s budget hole would be about $2 billion smaller.

California, already suffering through the worst economic downturn since the Great Depression, faces a $19.9 billion deficit and yet another budget stalemate in the State Legislature. Prop 24 would generate desperately needed revenue from those that haven’t been paying their fair share and can most afford to give a little back, and Prop 25 would free us from a budget rule that has enabled an out of touch minority  to bring out state to the brink of ruin.

The Public Interest Versus The Corporate Bottom Line

It goes without saying that we will be outspent in each of these ballot measure fights, perhaps by as much as 100 to 1 in the case of Prop 26. But the recent defeat of Prop 16 and 17 demonstrated that money alone doesn’t decide elections – and voters can reach a saturation point for corporate propaganda.

ExxonMobil, Chevron, Philip Morris, and Valero are perfect targets for voters’ anger in November – as is a supermajority rule responsible for yet another prolonged and costly stalemate leaving us without a budget. The more big business spends to protect the status quo in order to increase profits at the public’s expense, the bigger the bull’s eye they put on themselves.

If voters see through the deceptive campaign gimmickry and high paid consultants talking out of the sides of their mouths, the result may well be stronger popular support for reducing greenhouse gas emissions (No on 23!), holding polluters responsible for the harm they cause (No on 26!), restoring majority rule to a broken budget process (Yes on 25), and repealing corporate tax breaks (Yes on 24) given at a time education, health, and public safety programs were being gutted.