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.

By Chris Reed

Dan Walters had a good column over the weekend about the staggering political expedience we’re seeing throughout California. But after spending many hours researching a $2.8 billion school bond being pushed by the San Diego Unified School District, I’m now certain that there’s yet another massive scam unfolding in California: a systematic attack by school districts on the integrity of general obligation bonds.

I wrote about my findings as they relate to San Diego city schools here. The short version is that the old principle that bonds should only be spent on long-term capital improvements has given way to an anything-goes approach that uses borrowed funds paid back over 30 years to pay for what should be regular school expenses. Why? To make sure there is enough money in the operating fund to pay for teachers’ salaries and benefits.

How is this possible? The old days in which rules were so tough that the California Education Code said bond funds could only be used for school buses if they lasted 20 years have given way to this fuzzy consensus about OK uses for borrowed funds:

“The construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities.”

That is from guidance the California School Boards Association gives local districts.

In San Diego, where compensation eats up 93 percent of the operating budget, that means bond funds are being used or could soon be used for laptops, iPads and the most routine maintenance, such as painting and minor repairs. Proposition Z, on the November ballot, also includes repair funds for schools that just opened five years ago.

John DeBeck, a San Diego school board member from 1990-2010, told me using bond funds to supplant operating funds has gotten far more brazen in recent years. He said that bonds could easily be written to make the supplanting of general fund spending with bond fund spending impossible, but that such language was increasingly rare. DeBeck also said bond trickery used to be more likely from district staff, but now it was likely to be cooked up by staff in cahoots with trustees.

It reminds me of what a school finance investigator told me in 1996. He said fraud in which schools and entire districts lie about their average daily attendance was rampant. ADA is the basic formula by which schools get money from the state. He told me — and a school principal in San Bernardino confirmed — that this lying wasn’t just about who came to school. It was about how they were classified. Schools get more for troubled students than normal students.

Why was it tolerated and widespread? The school finance investigator said that was because school officials viewed it as a victimless crime.

Bond scam

The school bond scam is another version of that. Using funds that aren’t repaid until 2042 to buy an iPad that may last three years is insane, but it’s a “victimless crime” as far as the scammers are concerned.

Back to my theory that mass fleecing is going on with school bonds. I am now going to use Google to find another school bond on a local ballot in California. I bet it’s full of the same vague glop as San Diego Unified’s.

OK, the Burlingame Elementary School District pops up. (Really, I didn’t rig my Google search to come up with the district where the CTA is headquartered.) It reads:

“Measure D: “To maintain excellent local schools by modernizing science labs, upgrading instructional technology/computers, adding classrooms/reopening an existing school to reduce current overcrowding, upgrading classrooms to meet current safety codes, renovating heating and electrical systems to save money, shall Burlingame Elementary School District issue $56,000,000 of bonds that cannot be taken by the State, at legal rates, to renovate, construct, acquire local neighborhood schools, sites, equipment, and facilities with independent audits, citizens’ oversight, and no money for admnistrators?”

LOL. Bingo. 30-year borrowing for computers that last two years. 30-year borrowing for basic repairs. No guarantees that the funds will not be used to supplant regular operating budget responsibilities.

As one would expect, the official yes on Prop. D website doesn’t include specifics of any kind that would counter concerns that this was just another scam to allow teachers to keep getting automatic step and column increases in pay.

Greed

Now here’s the wrinkle: In the CTA’s backyard, it appears they are particularly greedy:

“Voters in the affluent district have also signed off on two recent parcel tax measures. Unlike bond money, proceeds from a parcel tax can go toward teacher compensation. In 2010, voters renewed a 10-year, $180-per-parcel levy. The following year they approved Measure E, a four-year, $76-per-parcel tax.”

Whole story here.

Dan Walters’ column closed by noting that state Treasurer Bill Lockyer was interested in statewide legislation that would prevent school districts from floating horrible bonds in which only the interest is paid back for decades, reacting to a scandal discovered when Poway Unified was found to have borrowed $105 million that would ultimately cost $981 million.

But will Lockyer go after the way more common bond scam of using 30-year borrowing to pay for tablet computers and routine repairs?

Nah. That would require courage. The California Teachers Association is the king, and it’s good to be the king. Going after the CTA’s “puke politics” is beyond the guy who once took on Gray Davis’ “puke politics.” California’s alleged political maverick picks his spots in displaying his maverick qualities, and the CTA scares him as much as it does everyone else in his party.

I hope everyone who reads this takes a close look at school bonds in their own backyards. I bet they are as pathetic as those in San Diego Unified and Burlingame Elementary. As far as the CTA is concerned, any crime that benefits the CTA is a victimless crime. If you do so and find anything juicy, please share it with me at: chrisreed99@yahoo.com.

We expect all sides in politics to fight hard, given the stakes involved, but our system rests on the broad acceptance of a set of fairly applied rules. We know, for instance, that no matter how nasty the coming presidential election becomes, the loser ultimately will cede power after the final count is in. This isn’t a kleptocracy, where the only redress for the losing side is to take to the streets in a violent revolt.

Unfortunately, California Attorney General Kamala Harris’ recent misuse of power to provide a dishonest ballot title and summary for proposed pension-reform initiatives, which she opposes, comes right out of the totalitarian playbook, where those wielding power recognize no rules of decency or fairness.

We expect judges, no matter their political stripes, to apply the law as written. We expect election officials to battle election fraud no matter their personal preference for the outcome. Likewise, we expect state attorneys general, who are the head of California’s “Justice” Department, after all, to provide fair title and summaries of all initiatives submitted to that office — even ones the AG personally doesn’t like. Without any civic spiritedness, people eventually will lose faith that they can make change by following the rules.

Harris, however, is a close ally of the public sector unions. And she has designs on higher office. Those unions have an iron grip on Sacramento politics, and they are doing all they can to stop the burgeoning pension reform movement. So when California Pension Reform submitted two initiatives that would rein in the unsustainable costs of the state’s pension system, Harris decided to behave as a political operative and besmirch the office she holds by distorting the official descriptions that most voters rely upon when making their voting decision.

In January, she titled the reform measures: “Reduces pensions for public employees.” That’s flat-out wrong. Her summary was filled with distortions meant to sway voters against them. As result, last week the pension reform group dropped the initiative. They couldn’t raise the $2 million needed to gather the signatures given the overwhelming obstacle Harris put in their way.

This never was going to be a fair fight. Unions would have outspent pension reformers by many multiples, but union supporters don’t want to take any chances given the growing pension backlash.

It’s certainly OK to hire a Democratic hack to wage a slash-and-burn anti-reform campaign, as the unions already have been doing, but it’s another thing to abuse the power of the state’s highest law-enforcement officer and rig the process.

Brown Reform

Now that the pension reform measure is dead, union allies in the Legislature are saying that Gov. Jerry Brown’s modest pension reform measures also are dead. As the San Diego Union-Tribune explained, one main fear the unions had was that the initiatives would give the governor leverage to force his reforms through the Democratic-controlled, union-friendly Legislature. You don’t want my reforms? the governor could ask. Then you’ll be stuck with tougher reforms at the ballot.

That leverage is gone.

Right-leaning blogger Chris Reed wrote on Calwhine.com, “There are plenty of signs that many … liberals were quite willing to believe that pensions are far too generous for public employees. But not union thug Kamala Harris. She’s in the tank for the union status quo. This is only the start of how the state government is rigged against the interests of regular Californians.”

Reed wasn’t the only one appalled by this increasingly rigged system.

The Modesto Bee’s liberal editorial page opined that pension reformers are “right about the Harris title and summary. Her office’s official description of the two measures read like talking points taken straight from a public employee union boss’ campaign handbook. Harris claimed the measures would reduce retirement income for current employees, which is not true. She also claimed that future government employees would lose survivor and death benefits, also not true.”

Selective List

The Harris summary also described supposed “cuts” to “teachers, nurses and peace officers, but excluding judges.” That’s campaign rhetoric, not the dispassionate description of a fair-minded AG.

As the reformers explained in their statement, “The AG selectively lists three positive poll-tested jobs out of thousands of government employee job classifications when both measures apply to all public employees, except constitutionally protected judges.” The San Diego Union-Tribune, referring to a pension system that is consuming upward of 30 percent of municipal budgets, complained about “Kamala Harris’ dirty trick on California.”

Ironically, these proposed initiatives were far from radical. They offered alternative plans for newly hired state employees as a way to rein in an unfunded pension liability, or debt, that is estimated as high as a half-trillion dollars by a Stanford University study. One measure would have put new workers only in a defined-contribution, 401(k)-style plan. The alternative would have created a hybrid plan that mixed the current defined-benefit pension with the 401(k)-type program.

The nonpartisan Legislative Analyst’s Office said in its analysis that the initiatives wouldn’t have achieved savings for many years. By focusing on new hires, the initiatives wouldn’t save too much until these new workers start retiring. That would argue for a tougher reform, but the state’s unions and their newfound heroine, Harris, want to block all reform.

California cities are facing potential bankruptcy, localities are cutting services, and there’s much pressure for tax hikes in an already highly taxed state to pay for public employee pensions that are far more generous than those typically earned in the private sector. The problem is real, and the situation is unfair to taxpayers.

It’s made even more unfair by the tactics of an attorney general who is happy to distort the democratic process to do the bidding of a special interest group that already has nearly unchecked power in the Capitol.

Don’t be surprised if more Californians lose faith in their ability to effect meaningful change.

– Steven Greenhut

I was so shocked this morning when I saw George Skelton’s column that I had to read it twice. I actually agreed with him.

He’s calling for reform of the state’s broken initiative process. He bashes Attorney General Kamala Harris for her ultra-biased title and summary for a pension-reform initiative. Skelton made the same arguments as my colleague Steven Greenhut did here on CalWatchDog.com. Greenhut called it “totalitarianism.”

Here’s Skelton: “In her title and summary of a conservative pension proposal, Atty. Gen. Kamala D. Harris somehow felt it necessary to define public employees for voters. They include ‘teachers, nurses and peace officers,’ she noted. You know, all the admired people — the ones with their faces in the anti-pension-reform TV ads. No mention of parking meter readers or tax collectors.

“She also claimed the proposal ‘reduces pension benefits for current and future public employees,’ ‘eliminates constitutional protections for current and future public employees’ vested pension benefits’ and ‘prohibits public retirement systems from providing death or disability benefits to future employees.’

“Nonsense.”

Skelton points out that a previous reform gave the writing of the title and summary to the attorney general. I would add that people should have seen that was an obvious mistake because the AG’s main job is running for governor. Harris obviously is. The previous AG was Gov. Jerry Brown. And before him, Bill Lockyer thought about running for governor, but didn’t; and Dan Lungren ran, but lost. Also, during World War II, AG Earl Warren put loyal Japanese-Americans into concentration camps to increase his popularity, which plopped him in the governor’s chair.

Skelton proposes shifting the writing of the title and summary to the non-partisan Legislative Analyst’s Office, which already produces the initiatives’ ballot analyses that nobody reads. That might be an improvement. It also might lead to the politicization of an office that so far has remained mostly, and surprisingly, non-partisan.

My suggestion: Farm out the writing of the title and summary to Switzerland. They do democracy better over there and have national initiatives. Then again, it would end up wrecking one of the last remaining free countries on earth. Everything the Golden State touches turns to pyrite.

Feb. 16, 2012

Get a load of this title AG Kamala Harris gave Gov. Jerry Brown’s $7 billion tax-hike initiative: “TEMPORARY TAXES TO FUND EDUCATION. GUARANTEED LOCAL PUBLIC SAFETY FUNDING.”

That should trick a couple hundred California voters into voting for the Dear Leader’s unneeded tax grab, maybe putting it over the top.

A more accurate title would have been: “MASSIVE TAX INCREASE WOULD ROB YOU AND DESTROY JOBS.”

Or how about: “WASTEFUL TAX INCREASE WOULD FUND PENSIONS, DESTROY THE STATE.”

But Harris’s title is what we get when voters put far-left ideologues in power like her and the Dear Leader.

— Jan. 18, 2012

Note: This first appeared in City Journal California.

JULY 13, 2011

By STEVEN GREENHUT

A series of bills pending in California’s state legislature would severely curtail the use of voters’ initiatives and referenda — and have already sparked a long-overdue debate about the virtues of direct democracy. Advocates for reform make some valid points about the problems with the initiative process; it’s certainly the case that legislators and special interests have found ways over the years to abuse it. But those flaws notwithstanding, the current proposals for reform should disturb anyone who wants to keep a check on the legislature’s excesses.

Democratic assemblyman Mike Gatto of Burbank has put forth several far-reaching proposals to restrict the initiative and referendum. Chief among them is Assembly Constitutional Amendment 6, which would require “initiatives that spend money or create a new program or mandate to identify and specify the funding to pay for it.” Gatto and his fellow Democrats insist that the measure, if approved, would apply only to initiatives that created new programs, but Republicans and taxpayer groups worry that it would also apply to tax-cutting initiatives. The bill’s language seems to confirm their fears: “This measure would prohibit an initiative measure that the Legislative Analyst or the Director of Finance determines would result in a net increase in state or local government costs exceeding $5,000,000, other than costs attributable to the issuance, sale, or repayment of bonds, from being submitted to the electors or having any effect unless the Legislative Analyst, the Director of Finance, or both, as applicable, determine that the initiative measure provides for additional revenues in an amount that meets or exceeds the net increase in costs.”

The legislation is expected to come to the floor on Thursday, though with amendments that allow only the legislative analyst to determine whether an initiative meets the financial threshold and that make it clearer that the legislation applies only to new programs.

Yet More Bills

Other Gatto bills would empower the legislature to modify initiative language and impose new supermajority requirements for certifying an initiative. The consequence of all these measures would be to reduce dramatically California voters’ ability to place initiatives on the ballot. Yet another reform measure, SB 448 — this one authored by Concord Democrat Mark DeSaulnier, a close ally of public-sector unions — is simply a harassment bill: it would require signature-gatherers to wear signs with big letters declaring whether they’re paid workers or volunteers, as well as whether they’re registered to vote and where. It remains alive in the Legislature.

What’s wrong with reining in an initiative process that critics on both left and right properly call “ballot-box budgeting” — in which voters tie the legislature’s hands by mandating various budget items? “Particularly harmful are popularly approved mandatory spending requirements, such as the requirement that the state spend approximately 40 percent of its revenues each year on education,” Troy Senik has written in City Journal, referring to Prop. 98, which voters passed in 1988. Joe Mathews and Mark Paul of the “radical centrist” New America Foundation, meanwhile, explain that “California doesn’t have one governing system, it has three systems. These three systems are at war with each other: an election system designed to produce governing majorities, a consensus-based legislative system that amounts to minority rule, and an inflexible system of direct democracy that trumps the first two systems. California doesn’t work because it can’t work.”

Progressive-era Reforms

There is, of course, some irony in the frustration of modern-day progressives like Mathews and Paul with a system of direct democracy that emerged from Progressive-era efforts to break the power of railroads and other special interests. Today’s liberals have good reason to be annoyed, since the handiwork of the early twentieth-century liberals usually ends up empowering California’s conservatives. “One of history’s little jokes is that these rebukes [of the governing class by the initiative process] have, more often than not, been defeats for the bien-pensant liberals who are the descendants of California’s Progressives,” William Voegeli writes in The Claremont Review of Books. “In the last three decades the voters have rejected unlimited property tax increases; public services for illegal immigrants, no questions asked; affirmative action; bilingual education; and same-sex marriage.”

The clear goal of the current reform efforts, championed by unions and liberal Democratic politicians, is to remove power from the people—who often vote for such crazy things as tax cuts, immigration reform, and tough-on-crime measures — and shift it back to California’s elected officials, who are as beholden to special interests today as their predecessors were a century ago. Constraining the initiative process would mean, for example, constraining voters’ power to reform pensions or impose a hard cap on state spending. It’s difficult to imagine legislators’ doing either of those things when union forces show up en masse at committee hearings to protest even the most modest reforms. So while conservatives may be right in identifying serious problems with the progressive experiment in direct democracy, they should be careful about embracing reforms that would remove the one tool that can save California from a completely unconstrained government.

Republicans finally are wising up to a strategy I suggested to them long ago: Use the initiative process much more often to protect taxpayers and businesses and jobs.

The GOP’s minority status means they have almost no influence in the Legislature. But they still can gather signatures.

So, I have suggested, they always should have ready at least one initiative for the next election. We have so many elections in this crazy state that you have to be prepared.

And don’t get discouraged if an initiative fails. Circumstances change rapidly and a similar initiative might win in the next election. Much as the Prop. 13 tax cut passed in 1978 after the Prop. 1 tax cut failed in 1973.

The L.A. Times reported today:

As Gov. Jerry Brown mulls his options on how to bring an election on taxes to the voters, Republicans are readying election measures of their own. GOP operatives filed two initiatives with the attorney general’s office Thursday — one to curb public employee pensions and another aimed at capping future state spending — in the event Brown walks away from talks with Republican lawmakers and opts for a November special election.

Now we’re talkin’.

Indeed, because of their minority status and the fractiousness of their state convention last weekend, Republicans have nowhere to go but up.

Even if these initiatives lose, they at least will generate debate and give voters a choice other than the usual Democratic mantra of “oh.we’re.broke.let’s.increase.taxes.”

And if the initiatives do lose, then come back immediately to qualify other initiatives, including tax cuts.

After the Prop. 1 tax cut lost in 1973, here’s what then-Gov. Ronald Reagan said:

The people will find a way to bring big government under control, to put a reasonable limit on how much of their income government may take in taxes. This idea will become a reality. It must prevail because if it does not, the free society we have known for two hundred years, the ideal of a government by consent of the governed, will simply cease to exist.

That’s even more true today.

Gov. Brown and the Democrats say they want to give people a vote.

So, give it to them.

March 25, 2011