If you don't see images in this message, click "Display Images" or the equivalent.
E-139 - Friday, October 18, 2019, presented by SYASLPartners
Advertise in The Nooner to reach over 8,000 readers
RECENT AURAL PLEASURE: Have a new pod episode related to California politics and policy that you'd like listed? Email Scott.
LEGISLATIVE DIRECTORY UPDATES:
IN TODAY'S NOONER:
DEADLINE: 2019 LEGISLATIVE GOLDEN BEAR AWARD NOMINATIONS: You should have received a reminder this morning that 5pm today is the deadline for nominations for the awards our little community is handing out to recognize those who stood above the crowd in the legislative year gone by. After tonight's deadline, I'll build the ballot and send each of you your own personal link sometime this weekend. You will be able to vote once throughout the next week and your uniqueid will not be associated in any way with the actual vote (totally different database tables).
As a reminder, both nominations and voting are confidential. Sure, I have my own thoughts but I will have one vote like each of you, and I doubt my choices will all win. We will unveil the winners on a special podcast aimed for October 30. This is a little bit of fun and a way to recognize those deserving, as recognized by the "wisdom of the crowd."
THE POD: Gibran and I are sitting down for What a Week this afternoon and the pod should be out by this evening in audio with video following a few hours later. Monday's pod with lobbyist Chris Micheli has been our fastest growing episode of the 40 we have done since Valentine's Day. We spend most of the time talking about the numbers from the year such as bills signed and vetoed, after which we talk about AB 5.
Yeah, you're all geeks like us who like hearing things such as Gavin Newsom had the same veto percentage (16.5%) in his first year as Jerry Brown had in his final year. We won't tell.
I've given Gibran a hall pass for him to go on a surfing trip with wife Haley in SD17 and SD19 next week, so the podcast studio will be dark. That said, I'll probably do a couple of short Nooner Bites depending on the news that emerges. If you've enjoyed what you've been hearing on the pod, sign up with iTunes Podcasts or your favorite pod-catcher. If I do them, they will be audio only as you sure as hell don't want to watch me talk alone into the ether.
As I wrote yesterday, we have opened up more seats for the Live Podcast with audience Q&A on California and Constitutional Law with UC Davis Law professor Carlton F.W. Larson on Monday, 12/9 at 7pm at Capital Books on K Street. While free, this is a must RSVP event. Kay Street has gotten a lot better, but you can understand why when there will be wine and goodies, we don't want to have a "come one, come all" event.
SPLIT ROLL: Yesterday, the title and summary for the 2020 ballot measure to assess most commercial and industrial property at fair market value for property tax purposes was released. Currently, these properties have the same 2% annual valuation increase provided to residential properties. The measure would raise $7.5-12 billion per year for K-12, community colleges, and local governments.
Today, we're not talking about the policy arguments, but rather the political nature. The measure was pulled back from the 2018 ballot, which was a sign of relief for statewide electeds who were on the ballot. Technical tweeks were made along with some substantive to address opponents' concerns and a new election date of November 3, 2020 became the target.
That pushback did two things. One, because of the very high turnout in the 2018 gubernatorial election, which is the basis for signature requirements, the number of signatures to qualify the constitutional amendment increased 70%. That said, the qualification cost of $2-3 million is considered minor in the overall campaign. In addition to unions, the Chan Zuckerberg initiative has kicked in $1 million ($500,000 for the 2018 effort and another $500,000 for 2020).
Yes, it's the same Zuckerberg all over the news as part of a conspiracy theory to re-elect Donald Trump who is supporting a liberal cause in California to raise business property taxes for education and other public services. Anyway, we can talk about the law that Facebook is trying to navigate that has always provided less scrutiny of the factual veracity of political ads. It's long First Amendment doctrine complicated by overlays for new technology by Congress. But, that's not why we are here today.
While it will cost the backers of the ballot measure nearly double to qualify for November, they got a great gift for the delay.
Below is the new title and summary, released yesterday and which greenlights petition printing and signature gathering.
Increases funding for K-12 public schools, community colleges, and local governments by requiring that commercial and industrial real property be taxed based on current market value. Exempts from this change: residential properties; agricultural properties; and owners of commercial and industrial properties with combined value of $3 million or less. Increased education funding will supplement existing school funding guarantees. Exempts small businesses from personal property tax; for other businesses, exempts $500,000 worth of personal property. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Net increase in annual property tax revenues of $7.5 billion to $12 billion in most years, depending on the strength of real estate markets. After backfilling state income tax losses related to the measure and paying for county administrative costs, the remaining $6.5 billion to $11.5 billion would be allocated to schools (40 percent) and other local governments (60 percent). (19-0008A1.)
Now, let's compare the new title and summary with the title and summary for the 2018 measure, which is technically qualified for November 2020, although it can be pulled back by proponents.
1851. (17-0055, Amdt.#1)
Taxes certain commercial and industrial real property based on fair-market value—rather than, under current law, the purchase price with limited inflation. Exempts agricultural property and certain small businesses. Dedicates portion of any increased revenue to local services and to supplement, not replace, state’s minimum-funding guarantee to schools. Provides tax exemption for $500,000 worth of tangible personal property used for business and all personal property used for certain small businesses. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Net increase in annual property tax revenues of $6.5 billion to $10.5 billion in most years, depending on the strength of real estate markets. After paying for county administrative costs and backfilling state income tax losses related to the measure, the remaining $6 billion to $10 billion would be allocated to schools (40 percent) and other local governments (60 percent). (17-0055.)
Notice the huge difference? In 2018, the tax changes preceded the language of where the proceeds would be directed. In the 2020 substantially similar measure, it's the opposite.
To simplify the two into the questions my dad would ask me to boil it down to:
That's a huge difference. I don't have time this Friday morning to research the history of revenue measures for specific causes to find how often the "benefit" of a tax increase precedes the tax itself, but I can look at a couple.
In 2012 amidst a miserable budget situation, California's voters approved Proposition 30 championed by Governor Jerry Brown. It raised sales taxes and taxes on high-income earners. The Attorney General under whose supervision the title and summary were crafted was now-Senator Kamala Harris. Here was the title and summary:
Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment.
This one was even more political than the current split roll effort, as it was seen as a state budget relief measure that avoided the K-14 Proposition 98 funding guarantee from going all Pac-man on General Fund support for programs, specifically health and human services. That said, even Proposition 30 had taxes first in both the title and summary. It passed 55.4-44.6%.
Let's look at the 2006 tobacco tax increase, which had a title and summary prepared under then-Attorney General Jerry Brown:
TAX ON CIGARETTES. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE.
Revenue before purpose.
But, before we jump to the conclusion that revenue always precedes purposes, we have to look at the 2004 mental health measure championed by then State Senate President Pro Tempore Darrell Steinberg:
Mental Health Services Expansion, Funding. Tax on Personal Incomes Above $1 Million. Initiative Statute.
Purpose before revenue. That one was also prepared under Attorney General Jerry Brown.
Opponents of ballot measures routinely seek changes to title and summary in the Superior Court for the County of Sacramento, which is the court where all such challenges are made. Courts do rewrite language, but generally only when it is misleading to the voter or has a factual inaccuracy. Something like the order of revenue then purpose or vice-versa are seen as administrative discretion and there is no law that limits such.
Critics of ballot measure titles and summary argue that title and summary preparation should be moved from the Attorney General's office to a nonpartisan entity, such as the respected Legislative Counsel. For those outside SacTown, Leg Counsel prepares legislative bill titles and summary and is rarely accused of political bias, even when asked to do so for some wild ideas introduced to make a point rather than a law.
Those who have been around remember these gems from Johnny Burton: SB 279 (1997): Orphan asylums; SB 297 (1997): Criminalization of being poor. Burton was making a point with the bills under the governorship of Pete Wilson, who had moved from a moderate San Diego mayor to a hard-liner on immigration, crime, and public services in the lead-up to his 1996 presidential bid.
The bills were never heard in committee, but the Legislative Counsel performed its ministerial duty of putting ideas into statutory language and preparing a summary.
It won't surprise you when I say that I would sign the petition for the split roll for both taxation policy and the fact that it delivers for community colleges. I haven't fully analyzed the alternative measure submitted earlier this week by the California School Boards Association, Association of California School Administrators, and the Community College League of California, but I'd probably sign it too to let the voters decide which strategy for increased education funding to pursue. We'll see what that title and summary looks like in about a month. Purpose and then revenue or revenue and then purpose? Will there be consistency from the AG's office?
I would also sign an initiative constitutional amendment to amend Article II, Section 10(d) of the California Constitution to move the preparation of title and summary to the non-political Office of Legislative Counsel.
All that being said, to the best I can recall, the last time I signed an initiative petition was for Proposition 92 for community colleges, which appeared on the February 5, 2008 special election ballot. I sort of had to, as I wrote most of it. While the League that I was President/CEO of for eight years is a co-sponsor of the CSBA initiative, I do not work for anybody other than you all these days.
I go to farmers market on Sunday to talk to farmers and buy their products--not to sign petitions from paid gatherers who know nothing about the topic.
That's not completely true. Sometimes, I like to have fun with them. My current favorite is asking the rent control gatherers paid for by Michael Weinstein and the AIDS Healthcare Foundation how their initiative works in conjunction with AB 1482 and Sacramento's new rent gouging and tenant protection ordinance. The blank stares in return are pure joy to me after which I move along to buy my persimmons for some great fall cookies.
VAPING HEARING: The video and audio from Wednesday's joint informational hearing of Assembly Governmental Organization, Assembly Health, and Assembly Business and Professions committees on e-cigarettes is now online.
PREZ EYE CANDY: For CalMatters, Ben Christopher has up lots of cool graphs on donations from Californians to the presidential candidates and the ability to search by ZIP code. As I tweeted, I wasn't shocked that Mayor Pete leads the ZIP code of the Nooner Global HQ--95811. We're not the "lavender blocks" over here in Southside Park, but it's a very diverse part of downtown and the attraction to Pete makes sense.
What I was surprised about was that President Trump leads in the Capitol's 95814. Since businesses can't contribute to federal candidates, I'm guessing it's the towers of residences on the north and east side of the Capitol.
To search your ZIP, scroll to "The big donor money race, zip by zip" and click on the magnifying glass on the left.
THIRD QUARTER CONGRESSIONAL FUNDRAISING: Yesterday afternoon, I sent Nooner Premium subscribers a slide deck (Keynote, PPT, and PDF) of third quarter fundraising reports for nine of the most competitive congressional races. For Premium subscribers, just log in and it'll be the top item in Premium Central. If you don't remember your password or never set one, click on "Forgot Password."
The races included are CA10, CA16, CA21, CA25, CA39, CA45, CA48, CA49, and CA53. I didn't tackle CA50 (East San Diego -- Duncan Hunter) as former congressman Darrell Issa announced his campaign on 9/26 and didn't file a third quarter report. Since he has significant personal wealth, making a chart for that race seems silly in the context of my work yesterday, but I'll certainly be writing far more in this space.
Nooner Premium subscribers and would-be subscribers: Let me know what else I can do like this to deliver better value for your support of our little community here. If I have the ability and the time, I would love to tackle it! Also, Premium subscribers, if you downloaded the slides early after my email yesterday, I have updated all three versions to include CA16. Rep. Jim Costa is not listed on the race page on the FEC's website, but I tracked it down.
Anyway, I share a sample to the right, which can be enlarged by a click.
CAKEDAY and CLASSIFIEDS after the jumpity jump...
For those tuning out for the weekend, have a great one and I'll meet you on the other side. For those along for the weekend ride, I'll "see" you tomorrow.
CAKEDAY: Happy birthday to Julie Adams, Daniel Clark, former Assemblywoman Young Kim, and Amy Warshauer!