And then last week, when a video with similar claims was released by the “No” campaign, The Bee doubled down on its assessment that the commercial contains “inaccurate claims about school funding and omits information to mislead voters.”

Making no value judgement about the pending measure, while happily admitting that the fact-checker sites generally perform good work and a valuable public service, CalWatchdog decided to fact-check the fact-checkers.

Full disclosure: I grew up in Virginia and smoked from age 12 to 28. While I loved smoking, Newports especially, in the end I preferred playing soccer, walking up the stairs at a normal pace, falling asleep without violent coughing fits, waking up without puffy eyes, and yes, having money in my pocket. 

Ad transcript

Davina Keiser, a Long Beach Math Teacher says to the camera: “Good schools are important to my students, and California. That’s why voters passed a law to ensure that schools get 43 percent of any new tax revenue. I was astounded to learn that Prop. 56 was written intentionally to undermine that guarantee. Prop. 56 raises $1.4 billion a year in new taxes and gives most of that money to wealthy special interests, like insurance companies. But not one penny goes to improve our kids’ schools. That’s just bad math.”

As The Bee points out, “The words ‘cheats schools of $600 million a year’ appear on the screen.”

Since the three fact check stories are largely the same, we’ll analyze the most recent Bee story.

The Bee writes: “Similar to an earlier ad funded by the tobacco companies, the new commercial contains inaccurate claims about school funding and omits information to mislead voters. It is a stretch to say Proposition 56 ‘cheats schools of $600 million a year.’ Nothing in the measure reduces school funding from current levels. If the measure passes, the education budget doesn’t decrease.”

We agree that “cheat” is a stretch. Cheat implies there is intent on the part of the Yes campaign to either deceive voters or go outside the normal framework to achieve its objective. Since the proponents are going through the legal, democratic process and are not hiding the fact that the measure is exempt from education-funding requirements, “cheat” seems like normal political hyperbole. 

But that doesn’t mean there isn’t a diversion of funds, or at least a diversion of potential funds. In 1988, voters passed Prop. 98, which Prop. 111 then amended the following election. These policies earmarked a certain amount of new revenue for education funding. While the number changes depending on many factors, it could be between 40 and 50 percent (we found conflicting numbers in our research, but this range should suffice).

Voters have the power to amend the Constitution to waive this requirement, as would be done in this case. But that doesn’t change the fact that we currently live in a world where a certain amount of all new funding is earmarked for education.

Even if everyone says it’s fine to do this, the money still won’t be going to education. If this wasn’t true, proponents wouldn’t have had to write the Prop 98 exemption into the Prop 56 language. 

For The Bee to write Prop. 56 would not cut funding is a red herring. The ad says “cheat,” not cut. And while “cheat” itself is misleading, there is an unquestionable loss of potential revenue. 

The Bee writes: “While Keiser says she was ‘astounded’ to learn that the measure works around Proposition 98, she shouldn’t be. It isn’t unusual. The last two increases in tobacco taxes approved by voters shielded the money from the Proposition 98 education funding guarantee.”

To be clear, you can’t fact check whether or not someone should or shouldn’t be astounded. But since The Bee speculated on Keiser’s level of astoundedness, we’ll speculate it’s possible she wasn’t aware of the prior measure’s exemptions. It’s even more possible that she’s just reading from a script.

To continue our speculation, we believe there is a significant percentage of voters who are unaware that prior tobacco taxes were exempt from Prop. 98. Again, we’re just speculating, but doesn’t it seem more logical than assuming every voter is fully-versed in budgetary minutiae and constitutional law?

In fact, Judge Michael Kinney agreed when he said in August that “Voters don’t know the numbers.” According to the Los Angeles Times, that was Kinney’s justification when he ruled the attorney general needed to be more specific in Prop. 56’s summary, to make clear to voters the connection between Prop. 98 and school funding.

The Bee is correct that the last two tobacco-tax ballot measures were exempt from Prop. 98. But the original tobacco excise tax, passed in 1959, has been contributing a certain amount to education funding since Prop. 98 was approved in 1988. So it’s not unprecedented. We can sympathize with Keiser or any other voter who doesn’t know all of this. 

The Bee writes: “It’s also wrong to say ‘not one penny’ of the funding goes to improve schools. The Legislative Analyst’s Office estimates that up to $20 million of the new tax revenue would to go the Department of Education for school programs to prevent the use of tobacco among young people.”

Anti-tobacco programs in school will do little to give teachers raises, reduce classroom sizes, improve academic performance, improve graduation rates, increase the number of kids going to college, or implement any other meaningful suggestion policy makers and advocates have for improving California’s schools.

While steadily increasing, only 23 percent of voters think California schools have improved over the last few years, while 30 percent say schools gotten worse (35 percent say it’s stayed the same, which could either be negative or positive), according to a recent poll from Policy Analysis and California Education/University of Southern California Rossier School of Education.

These programs may deter some kids from smoking and encourage others to quit (although it never worked on me), and maybe a tobacco opponent would make an argument that lowered-tobacco/nicotine usage actually improved a school, but it would be stretch. To claim it’s “wrong to say ‘not one penny’ of the funding goes to improve schools” is absurd, unless The Bee is being both narrow and creative in its understanding of improvement.

It’s possible that proponents aren’t as concerned with the loss of potential education funding because of another measure on the November ballot, Prop. 55, which would extend a temporary tax on personal incomes of $250,000 or more to education and health care funding. The Legislative Analyst’s Office estimates this will generate between $4 billion and $9 billion per year until fiscal year 2030-31, with a little more than half going to education.

Tom Torlakson, the state superintendent of public instruction, co-wrote the ballot measure argument in favor of Prop. 55, arguing it would fund the hiring of more teachers, help with college affordability, help restore arts and music programs and help stave off cuts, among other things. “We can’t go back to the days of devastating cuts and teacher layoffs,” Torlakson and others wrote.

But despite the sky-is-falling argument on Prop. 55 (there would be a substantial loss of revenue if Prop. 55 fails), Torlakson wrote a letter in favor of Prop. 56, which, as the PolitiFact California fact-check noted, said: “Make no mistake, Proposition 56 will not divert a dime away from schools. Rather, it will raise revenues for school based tobacco prevention and intervention programs.”

The state’s top educator pleads with voters to bolster education funding to fight off “devastating cuts,” while he’s cavalier about the loss of a potential $600 million. There’s a chance the prospect of Prop. 55 passing helped him leave $600 million on the table.

The Bee writes: “This time around, Proposition 56 directs most of the tobacco tax revenue increase to Medi-Cal to raise reimbursement rates, which critics have long blamed for the state’s health care conundrum. Doctors say the financial reimbursements they receive for providing care to California’s most impoverished patients are too low to maintain a practice. The ‘wealthy special interests’ the ad refers to are doctors, clinics, hospitals, managed care plans and any other health-related group that get Medi-Cal payments because they provide services to eligible patients.”

There is big money at stake here. The Legislative Analyst’s Office estimates Prop. 56 could generate between $1.27 billion and $1.61 billion in revenue next fiscal year.

The ad says “most of this money goes to wealthy special interest groups, like insurance companies.” Medi-Cal, the state’s health care program for low-income residents, would receive the bulk of the Prop. 56 revenue, after certain requirements and programs are paid for.

Depending on how the money is actually divvied up in the budget process will determine whether “most” of the funding goes to insurance companies, like managed-care plans, although other health care providers, like doctors, clinics and hospitals, will get their share as well. 

In February, the Legislative Analyst’s Office estimated that in 2016-17, 75 percent of Medi-Cal beneficiaries are enrolled in managed care. 

But two months before the election, one of the highest-visibility measures also is fairly narrow in scope. Proposition 56 would raise California’s relatively low tobacco tax (relative to other states) by $2 a cigarette pack – and increase taxes by an equivalent amount on all other tobacco products (cigars, chewing tobacco, etc.). It also would significantly increase taxes on electronic cigarettes and vaping products. It has high visibility right now because of a series of advertisements opponents are running on radio stations across the state.

Supporters pitch the measure as a means primarily to boost public health. “An increase in the tobacco tax is an appropriate way to decrease tobacco use and mitigate the costs of health care treatment and improve existing programs providing for quality health care and access to health care services for families and children. It will save lives and save state and local government money in the future,” according to the initiative’s findings.

Gov. Jerry Brown recently signed into law a package of anti-tobacco bills that, among other things, raise the smoking age to 21. Studies of addiction show that teens who begin smoking are more likely to continue this dangerous habit throughout their lives. Backers of this initiative argue that raising the prices of cigarettes is another main way to dissuade people from smoking. And they point to the costs to the health system imposed by smokers.

But the measure’s opponents are focused increasingly on the spending aspects of the proposal. According to the official ballot argument against the measure, “Prop. 56 allocates just 13 percent of new tobacco tax money to treat smokers or stop kids from starting. If we are going to tax smokers another $1.4 billion per year, more should be dedicated to treating them and keeping kids from starting. Instead, most of the $1.4 billion in new taxes goes to health insurance companies and other wealthy special interests, instead of where it is needed.”

An analysis by the non-partisan Legislative Analyst’s Office confirms that only a small percentage of the estimated $1.4 billion in new revenues are earmarked to such programs. The main priority of the new funds, based on the LAO analysis, is to “replace revenues lost due to lower consumption resulting from the excise tax increase.” That reinforces the odd conundrum faced by California and other states. They use tax and regulatory policies to promote public health by reducing smoking, but then struggle to find funds to pay for ongoing programs as the number of smokers – and therefore the number of tobacco-taxpayers – keeps falling.

The initiative then earmarks some funds to law enforcement, to University of California physician training, to the state auditor and to administration. But 82 percent of the remaining funds go to “increasing the level of payment” for health care related to Medi-Cal, the state’s health-care program for low-income people. Prop. 56 opponents therefore argue it’s designed mainly to benefit health-insurance companies and other interest groups – and includes few limits on how they spend the money they receive.

Furthermore, the initiative bypasses educational-funding requirements under Proposition 98, the 1988 initiative that now requires approximately 43 percent of state general-fund revenues to be directed to the public-school system. As the LAO explained, “Proposition 56 amends the state Constitution to exempt the measure’s revenues and spending from the state’s constitutional spending limit. (This constitutional exemption is similar to ones already in place for prior, voter-approved increases in tobacco taxes.) This measure also exempts revenues from minimum funding requirements for education required under Proposition 98.”

It’s not unusual for a major tax hike measure to ignite controversies over how the new revenues will be spent. But there’s a serious question about whether this initiative will meet its health-improvement goals given the way the tax hammers a common product used by people to quit smoking.

In a research paper co-authored with my R Street Institute colleague Cameron Smith, we note the measure boosts excise taxes on vaping by 320 percent. The key, stated goal of the tobacco tax increase is to dissuade people from buying cigarettes. By the same logic then, the massive boost in taxes on e-cigarettes seems designed to dissuade people from using them.

Yet as Public Health England explained: “The comprehensive review of the evidence finds that almost all of the 2.6 million adults using e-cigarettes in Great Britain are current or ex-smokers, most of whom are using the devices to help them quit smoking or to prevent them going back to cigarettes.” That government health agency urges public-health officials to promote vaping as a way to improve public health. Some U.S. studies come to similar conclusions.

Proposition 56 backers argue that vaping hasn’t been proven safe and the devices haven’t been around long enough to know long-term health effects. They also fear teens will begin vaping and then move on to combustible cigarettes, which everyone agrees are dangerous. And they point to a recent University of Southern California study suggesting teens who vape are six times more likely to begin smoking cigarettes than teens who don’t vape.

In reality, the study seems mainly to reflect “the difference between teens inclined to experiment and teens not so inclined,” according to a public-health expert we quoted. Furthermore, the e-cigarette industry doesn’t claim vaping is safe – they say it is a safer alternative to cigarette smoking. Research suggests they are about 95 percent safer.

California has the second-lowest smoking rate in the nation at around 12 percent. Only Utah has a lower percentage of smokers. So Proposition 56 doesn’t effect a broad swath of the public – but it is a contentious measure given questions about where the tax dollars will go and about its heavy-handed treatment toward vaping. Compared to many of the other initiatives on the ballot, this one might seem simple, but it’s about far more than whether the state government should boost taxes on a pack of cigarettes by two dollars.

Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at sgreenhut@rstreet.org.

New bill rekindles old human egg fight

Good morning! Happy Monday. Our top story is about a new bill rekindling the old human egg fight.

California women interested in profiting from their eggs — often handsomely — have long availed themselves of private opportunities to do just that. Now, they could have another chance to do so on the medical research market under a new bill.

CalWatchdog has more.

In other news:

• “In wake of Stanford sexual assault case, lawmakers once again pitch mandatory prison time,” writes the Los Angeles Times. 
• “A surge in Democratic voter registration has cut Republicans’ advantage in Orange County to less than 6 percentage points and has doubled the number of Democratic cities over the past year,” writes The Orange County Register.
• Fight over a campaign-funded slate mailer posing as a newspaper heads to federal court. OC Weekly has more. 
• “Bilingual education back on the ballot 18 years after voters rejected it,” writes The Sacramento Bee.

Assembly:

• In at 1 p.m. 

Senate:

• In at 1 p.m. Packed Appropriations agenda starting at 10 a.m.

Gov. Brown: 

• No public events scheduled.

Tips: matt@calwatchog.com

Follow us: @calwatchdog @mflemingterp

New followers: @APLaurieKellman

Is Issa really in trouble?

Is Congressman Darrell Issa really in trouble after squeaking through the primary election earlier this month?

Just two and a half years after being on top of the political world, Issa is in one of the toughest political fights of his 15-year career, according to his hometown paper, after advancing to the general election with just 51.5 percent of the vote.

Political handicappers have downgraded his race from Safe Republican to Likely Republican and Republican’s voter registration advantage in the district has dipped with the rise of Trump (who Issa endorsed).

But Issa’s camp isn’t worried, noting that while the race was close, it still ended with Issa on top — a forecast of what’s to come.

“While the election night number was what it was, I think a longer look at the whole story shows that we withstood — rather than were walloped by — the registration surge, heavy Dem turnout and no competitive GOP race,” said Issa spokesman Jonathan Wilcox.

CalWatchdog has more. 

In other news:

• About that Trump endorsement: At an event in San Diego yesterday, Issa said he’d like to have a “re-do” of the entire primary process where Trump wasn’t the nominee. The San Diego Union-Tribune has more. 

• The Dalai Lama brought a message of peace to Sacramento on Monday, telling lawmakers: “The best way to take care of one’s self is to take care of others.” The Los Angeles Times has more. 

• Even though they haven’t officially qualified for the November ballot yet, 10 would-be initiatives are stockpiling money and preparing for war. The Sacramento Bee has more. 

• “California lawmakers are putting the finishing touches on a plan to provide up to $2 billion to help cities build permanent shelters to get mentally ill people off the street,” writes the AP/Capital Public Radio.

Assembly:

• Full slate of committee hearings. 

Senate:

• Full slate of committee hearings.

Gov. Brown: 

• No public events scheduled.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @grahamdude @nwconservative

Currently, anyone who spends $5,000 or more to influence legislative or administrative action is required quarterly to disclose payments to lobbying firms, payments to lobbyists, activity expenses and other payments to influence legislative or administrative action.

The regulation, which will go into effect July 1 — meaning it’ll start showing up in October just before the election — makes it so the fourth category “other payments to influence” will be itemized. As it stands now, that fourth category has become a catchall with no accountability.

This “other payments” classification could include hiring consultants — such as former politicians who aren’t registered lobbyists — or the cost of advertising, hiring a public affairs firm, media consulting firm, or even something simple like paying rent.

But no one really knows on a case-by-case basis, since up until now it’s just reported as a top line amount with no specificity.

And groups are more regularly relying on this ambiguous classification. For example, the 10 interest groups that regularly spend the most on lobbying have gone from 52 percent of their total amount reported as “other payments” in 2000 to 69 percent in 2014, according to the Fair Political Practices Commission report.

Total spending has increased as well, up 34 percent over that same period of time among the top 10.

“There are two main goals behind the regulation, to increase transparency and promote compliance,” said FPPC Chair Jodi Remke in a statement. “As for transparency, the public is entitled to know who is trying to influence public officials and how they are doing it. As for compliance, lobbying is largely a self-regulated industry and requiring more detailed reporting is the most effective tool to promote compliance and facilitate enforcement against improper activity.”

The threshold for itemization will be $2,500 per expense, broken out into multiple categories, including salary, lobbyist expenses, legislative-related services, consultants and government relations, public affairs, advertising, research, lobbying events and other. Disclosing the name and address of the payee will also be required.

Critics say because the $2,500 threshold is so low, the new law imposes cumbersome reporting requirements on filers, particularly now in the middle of an election cycle, and the privacy of employees whose names will be published will be violated with little value to the public.

“These are individuals within many organizations who are not registered lobbyists, and while they may engage in some direct lobbying communications, they do not qualify as lobbyists,” wrote Diane M. Fishburn and Richard R. Rios of the law firm Olson, Hagel and Fishburn, in a letter to the FPPC.

“We ask that the commission recognize that there is little if any value to the public in the disclosure of the individual names and addresses or the salaries paid to these individuals,” continued Fishburn and Rios, whose firm represents the California State Council of Service Employees, an SEIU affiliate.

With a rush to place measures on the ballot because of low signature requirements to qualify a measure, cheaper costs to file an initiative (a minor factor), and, especially, the lure of higher turnouts during a presidential election with all initiatives now legally bound for the November election rather than the June primary, the initiative process has become catnip for policy entrepreneurs and special interests.

Consider what the voters could be facing in November via the initiative process:

• Increasing the minimum wage to $15 an hour.
• Legalizing marijuana.
• Deciding whether to eliminate the death penalty altogether or speed up the process so that those receiving a death penalty would not linger so long before the sentence is carried out. There are two competing measures filed.
• Banning one-time use plastic bags (a referendum that has already qualified) and perhaps requiring paper bag fees to end up in an environmental fund (a bit of revenge against the grocers that supported the plastic bag ban and reap the payments on paper sacks).
• Bar state agencies from paying more for prescription drugs than the lowest price paid by the federal Department of Veteran Affairs, which typically negotiates the best bulk rates from drug companies.
• New gun control measures, especially background checks for ammo purchase.
• $9 billion in state bonds for school construction.
• A requirement that all revenue bonds of $2 billion or more receive a vote of the people, designed we are told by observers, to undercut Gov. Brown’s Delta Tunnels plan.

As appears in many advertisements, this is only a partial list.

Then there are the many tax measures:

• A 230 percent increase in cigarette taxes adding $2 a pack.
• A continuation of the Proposition 30 taxes of 2012 on upper-income earners that was originally passed as temporary. There are two different measures dedicated to that purpose.
• A tax increase on property valued at $3 million and more to fund poverty programs.

While the legislators’ role in big policy decisions this year might be diminished in light of a ballot full of propositions, let’s not forget that elected officials can and will play prominent roles in various initiative campaigns.

Lt. Gov. Gavin Newsom has embraced marijuana legalization, the minimum wage and background checks on ammunition purchases. You would expect Newsom to husband his money for his coming gubernatorial campaign so his role would be that as a spokesman and advocate and, perhaps, fundraiser.

Not so with Gov. Jerry Brown. He’s already hinted that the $20-plus million sitting in his political account could be used in ballot battles. A prime consideration would be the defeat of the revenue bond vote requirement that could scuttle some of Brown’s big plans.

When all is said and done by the end of this year, it appears likely voters will serve as the legislators making big policy decisions.

Editors Note: The American Progressive Bag Alliance sponsored a media dinner hosted by Calwatchdog to discuss and debate the plastic bag ban with journalists in Southern California.

Denise Cross / flickr

A tenfold increase in the initiative filing fee was supposed to reduce the number of long-shot proposals in circulation.

“The updated filing fee set by this bill will deter frivolous submissions,” Assemblyman Evan Low, author the new initiative fee increase, said in a September press release. “We live in California, the cradle of direct democracy, but we also need a threshold for reasonableness. And this bill will do just that.”

It’s had the opposite effect, as dozens of proponents of unconventional ideas rush to file their initiatives before the end of the year.

Among this year’s unconventional proposals: a 1,000 percent tax on political advertisements, a 5-cent tax on bottled water, a statewide ban on shellfish and a plan for California to declare independence from the United States.

“For the privilege of influencing public elections and political issues, a sales tax of 1,000% (one thousand percent) is hereby imposed upon Political Advertisements,” a statewide ballot measure, proposed  by Terrance Lynn of Portola Valley, states. “The proceeds of which shall solely benefit California public education.”

And if the courts try to strike down the measure, Lynn’s prepared for that, too. “If a Federal District Court or Supreme Court of the United States find this tax to be too high, then this law shall immediately ratchet down to the highest acceptable level and remain in place,” the measure states.

10x Filing Fee Hike

On January 1, the cost of proposing a statewide ballot measure for circulation will increase from $200 to $2,000. The new law, authored by Democratic Assemblymen Evan Low of Campbell and Richard Bloom of Santa Monica, was intended to reduce the number of proposals given a ballot title and summary.

“This significant fee increase could greatly reduce the number of initiative proposals submitted for title and summary, and thus reduce the AG’s workload in this area, in addition to that of the Legislative Analyst’s Office and the Department of Finance, which jointly prepare a fiscal estimate of proposed initiatives,” states the state Assembly’s legislative analysis of AB1100 published in July.

Yet, the fee hike itself has likely spurred more frivolous measures. Often times, the text, title and summary are enough to generate free publicity for an idea, including outrageous and blatantly unconstitutional measures.

Subhendu Das of West Hills wants to see California lawmakers adopt a secret ballot for legislative business. Joe Decker believes the state should make “the sale or consumption of shellfish a serious felony punishable by a $666,000 fine per occurrence and/or prison sentence of up to six years, six months, and six days.”

Citing Aristotle’s philosophy of human association, Louis Marinelli of San Diego wants California to declare its independence from the United States.

“Do you agree that California should acquire the exclusive power to make its laws, levy its taxes and establish its own relations abroad — in other words, sovereignty — and at the same time to maintain with United States an economic, political, and military partnership?” he proposes in the “California Nationhood” initiative.

If that idea fails to gain support, he’s also asking California residents to impose a 5-cent tax on bottled water

Fee Hike to Deter Frivolous Submissions

Since 1943, any Californian with $200 has been able to obtain the necessary paperwork to begin collecting signatures to put their proposal on the ballot. The reasonable filing fee has allowed average citizens and grassroots organizations to shape the political debate.

From 2009 to 2013, the state Attorney General’s Office has drafted titles and summaries for 315 measures. Just 27 ultimately qualified for the ballot.

Low’s office noted that, as of August 2015, 58 proposals had been submitted for the 2016 November ballot. By December 14, that figure had doubled. The California State Attorney General’s Office has received 118 requests for a ballot title and summary — double the average number of initiatives from the previous decade.

State legislative analysts say that the number of initiative petitions have been gradually increasing. Over the last half century, proponents filed the following number of initiatives:

• 47 from 1960 to 1969
• 180 from 1970 to 1979
• 282 from 1980 to 1989
• 391 from 1990 to 1999
• 647 from 2000 to 2009
• 240 from 2010 to April 21, 2015

Proponents of the new higher filing fee say that it will help offset the cost to taxpayers. The AG’s office estimates that it takes 56 hours of staff time to prepare each ballot measure, at a cost of $8,000. Under the new state law, proponents get their money back only if the measure qualifies for the ballot.

Some state political observers say the filing fee hike undermines citizen engagement in the process.

“The initiative game in California is entirely for the rich and powerful,” argues columnist Joe Mathews, who also serves as a board member of Democracy International. “What we need are alternative ways to get measures on the ballot that are based on the quality of the idea and on public support.”

In recent months, sponsors of tax increases have filed the necessary paperwork to obtain a ballot title and summary for multiple tax increases, including two versions of a Prop. 30 tax extension. Critics of higher taxes say that an extension of Prop. 30 violates the promise made in 2012.

“Prop. 30 was creatively advertised and sold to the voters by a union, the California Teachers Association, which depicted it as a ‘temporary’ tax to support public schools,” contends former Democratic State Senator Gloria Romero. “But even while Prop. 30 was being pitched to voters as a temporary tax increase, no one in the political world actually believed it. In fact, discussions were already underway before its passage about extending Prop. 30 tax increases beyond the two expiration dates.”

Version 1: Prop. 30 Tax Extension

In September, attorneys on behalf of the Alliance for a Better California, a coalition of education unions, organized labor and health care providers, introduced the “School Funding and Budget Stability Act,” which would impose higher income taxes on high-wealth earners for the next 12 years. The $9 billion in anticipated higher tax proceeds would go towards schools. That also explains why the California Teachers Association is among the proposal’s biggest supporters.

“Temporarily extending these critical revenues will help keep our state budget balanced, and prevent devastating cuts to programs affecting students, seniors, working families and health care,” Gale Kaufman, a longtime Democratic strategist and representative of the coalition, told the Educator, the CTA’s monthly magazine.

Under the plan, California residents earning more than a half-million dollars per year would continue to pay Prop. 30’s higher income taxes until 2030. The quarter-cent sales tax increase would expire next year as scheduled.

Version 2: Prop. 30 Tax Extension

Not content with one tax hike, the same group introduced a second Prop. 30 tax extension in December. The measure would impose Prop. 30’s higher tax rates on those earning more than $250,000 per year — with the proceeds allocated in a slightly different manner.

In an apparent bid to gain support from California’s hospitals, “The California Children’s Education and Health Care Protection Act of 2016” would allocate up to $2 billion towards Medi-Cal spending.

“Whether this version truly represents a joint teachers union/health care effort remains to be seen,” explains Loren Kaye, president of the California Foundation for Commerce and Education. “The health care union has not indicated its position on this approach; indeed, in a bizarre twist, it recently sued the CHA for entering into negotiations with CTA in the first place.”

“Amid this uncertainty, one fact remains unassailable: the CTA has a measure ‘on the street’ for which they can begin collecting signatures. Everything else for now is speculation,” he added.

Sponsors of the tax increase say it is desperately needed to avoid catastrophic cuts to schools and other public services.

“Unless we act now to temporarily extend the current income tax rates on the wealthiest Californians, our public schools will soon face another devastating round of cuts due to lost revenue of billions of dollars a year,” the sponsors of the ballot measure wrote in a draft initiative. “We can let the temporary sales tax increase expire to help working families, but this is not the time to be giving the wealthiest people in California a tax cut that they don’t need and that our schools can’t afford.”

Prop. 30 Tax Extension Could Backfire

Many economists fear that any Prop. 30 income tax extension could backfire and further drive high-income earners out-of-state. California’s $115 billion General Fund budget has become increasingly dependent on income tax revenue, which frequently fluctuates based on the stock market.

“(T)he initiative to extend Prop. 30 taxes, rather than solving a problem, creates a worse one,” writes Jerry Nickelsburg, a senior economist for the UCLA Anderson Forecast. “Our current greater dependence on high-income earners to balance the state budget makes us more vulnerable.”

Nevertheless, many state political observers say that a tax extension, which could generate upwards of $11 billion in revenue, is likely to pass in 2016. At a recent economic summit, “Controller Betty Yee predicted that a Proposition 30 extension and a cigarette tax will be on the 2016 ballot and both would pass.”

That assessment comes even as one-time supporters of Prop. 30 question the rationale for its extension.

“In a time of financial crisis, Prop. 30 made sense,” the Los Angeles Daily News recently editorialized. “But the state is no longer in crisis, and any ballot measure playing off the fear of a return to dark days should be seen for the political ploy it is by unionists seeking to protect their own interests.”

It’s not even 2016 yet, but the first debate over a probable initiative on the November 2016 ballot took place in Dana Point Monday when former Board of Equalization member Conway Collis squared off with Howard Jarvis Taxpayers Association president Jon Coupal over the Lifting Children and Families Out of Poverty Act. The debate was hosted by the California Alliance of Taxpayer Advocates.

The measure, backed by charity organizations dedicated to reducing poverty, would raise property taxes on residential and commercial property valued at $3 million and more. The money would be deposited in anti-poverty programs outside the General Fund.

Collis argued that the initiative was a way for government to help relieve 2.4 million California children living below the poverty line. He said there was a moral and financial reason to do so. Leaving one-quarter of California’s children in poverty was an immoral position for the state. Lifting 50 percent of those suffering from poverty in 20 years — the goal of the initiative proponents — would reduce the dollars required for welfare programs and prisons while adding taxpayers to the rolls.

Coupal saw the measure as a direct attack on Proposition 13’s property tax protections. He asked: “Aren’t taxes high enough?” listing the state’s high tax rates in different tax categories. Coupal said voters were willing to support the Proposition 30 tax increases when the state budget was in crisis. There is no crisis now, he asserted, with the state sitting on a surplus of anywhere from $1 billion to $10 billion.

To Collis, a tax that touched only 1 percent of the taxpayers was worth the investment in attempting to save money in welfare programs while aiding those in poverty. He said business had a legitimate concern in annual reassessments on property (as proposed in a legislative bill to split the property tax roll) but that this plan “protects and builds” on the Proposition 13 framework and would preserve property tax predictability.

But Coupal said the economy and businesses would suffer, with more businesses packing to leave the state, especially because the great portion of the properties affected by the proposed tax increase would be commercial properties.

While Collis said the initiative has fail-safes to control programming that did not work to reduce poverty, Coupal countered that 30 programs are already in place to deal with poverty and that many suffer from fraud and abuse with recipients spending taxpayer-sponsored income in Hawaiian resorts and Las Vegas casinos.

Collis said his initiative would not simply help the poor but would boost all Californians. He said that the growing number of poor would “swallow the state budget” unless corrective measures are taken.

Collis insisted that polling and focus groups prove that voters understand that the tax was only on expensive property and would affect few taxpayers. He said signature gatherers were asking voters if they owned property over $3 million and if they answered “no” then they were told the measure would interest them. Collis said voters readily signed.

However, Coupal had a message for those voters should the initiative qualify for the ballot. The initiative breaks Proposition 13 by going after residential property. Once that door is opened other tax increase activists will want to charge through and all residential property owners would be at risk. That message will not be lost on voters, Coupal said. It is a concern that would be expressed in a political campaign.

The campaign messages are already being shaped and a long political campaign season has unofficially begun.

(Disclosure: I am associated with the committee that opposes the Lifting Children and Families Out of Poverty Act.)

Denise Cross / flickr

According to the recent Public Policy Institute of California poll, state residents like the initiative process but think too many initiatives appear on the ballot. To borrow a line from Al Jolson: “You ain’t seen nothing yet!”

Of the 100 or so initiative proposals that have been filed with the Attorney General, maybe 20 percent will make the ballot. As Los Angeles Times Sacramento bureau chief John Myers reported last month, 15 to 19 look like possibilities, the largest number of propositions since 20 appeared on the March 2000 ballot.

In the nine November general elections since 2000, the ballot has averaged about 10 propositions per election. Remember, the law was changed in 2012 to force all initiatives – measures put on the ballot by petitions – to the November elections. No longer could they appear on the June primary ballot. So the longer November ballot in 2016 could be a harbinger of future elections.

However, it is possible another rule change that is about to come into play might also limit the number of initiatives on the ballot. Now, initiative proponents are allowed to pull their initiative before a measure is certified even if enough signatures have been gathered to qualify the measure.

The idea behind this change is for initiative advocates to try and work out a legislative fix to the problem they are addressing with their initiative thus avoiding a costly ballot fight. However, the power to pull an initiative also gives proponents the ability to negotiate with others who may have a conflicting initiative and come to a mutual agreement thus avoiding a ballot duel.

As of now, gathering signatures on the street are initiative measures for death penalty repeal, parental notification on abortions, minimum wage and property tax increase on million dollar properties. These measures will soon be joined by a host of others, including an effort to hasten the use of the death penalty, which could give a clear policy choice to voters in November.

Already qualified for the ballot are measures dealing with hospital fees, voting on revenue bonds, use of condoms in adult films, school bonds and a referendum to overturn legislation on one-time use plastic bags.

The thing that voters like about the initiative process as captured in the PPIC poll is the ability to have their voices heard on policy issues. Looks like the voters will have plenty of opportunities to participate in decision-making next year.

Which in turn will probably have them grumbling again about the number of initiatives they have to consider.