Pete Rates the Propositions
Sensible opinions on the California ballot propositions      since 1980      by Pete Stahl

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Pete Rates the Propositions
June 2010

Pete recommends:
13   YES   Reassessment Exemption for Seismic Retrofitting
14   YES   Nonpartisan Primary Elections
15   YES   Public Campaign Financing Pilot Program
16   NO   PG&E's Law
17   NO   Mercury Insurance's Law


Proposition 13: Reassessment Exemption for Seismic Retrofitting – YES

This year's Prop 13 will make a minor adjustment to the famous Prop 13 of 1978, as amended by the not-so-famous Props 23 of 1984 and 127 of 1990. You see, the original Prop 13 says that any major construction or renovation of a property must be added to the property's assessed value, triggering higher property taxes. To encourage earthquake safety, Prop 23 granted a 15-year reassessment exemption for seismic reconstructions of unreinforced masonry buildings. Later, Prop 127 went further, granting a permanent reassessment exemption for earthquake safety modifications made to any type of building.

The trouble is, Prop 127 left Prop 23 in place, meaning that modifications made to unreinforced masonry buildings—those most vulnerable to earthquake damage—are given less preferential treatment than other types of buildings. Oopsie. The practical effect is a disincentive to fix unreinforced masonry buildings, placing everyone in and around them at risk.

Prop 13 of 2010 will correct the problem by essentially repealing Prop 23, so all seismic safety upgrades will be given permanent reassessment exemptions.

My regular readers may remember that I usually recommend protest votes against this kind of modification to the original Prop 13. Today’s property tax system is broken, the argument goes, and needs a complete overhaul. Any exemptions we grant to special classes of owners will only satisfy their complaints and thus forestall the day when we can fix the whole system.

You can lodge a protest "no" vote if you like. But I'm still spooked by footage of deadly building collapses in Haiti, Chile, China and Mexicali. If this ballot measure fails, surely some owners of unreinforced cinderblock buildings in California will decide it's too expensive to make them safe. I don't want that on my conscience when our next big earthquake hits and those buildings go down, potentially with people in them.



Proposition 14: Nonpartisan Primary Elections – YES

(Note: I revised this rating on May 14 to correct a goof. My recommendation remains the same.)

Look on your ballot at the candidates for state Superintendent of Public Instruction. You can't tell what parties these candidates belong to, because the office is nonpartisan. In the primary election for Superintendent, if no candidate polls over 50%, the top two finishers advance to a run-off in November, and all other candidates are eliminated.

Are these nonpartisan primaries bad? Are voters fooled into voting for candidates who don't share their views? Are candidates with unusual philosophies unfairly excluded from the November ballot?

Of course not! Nobody believes we ought to make elections for Superintendent into partisan affairs. Top-two run-offs, while not perfect, are the simplest fair means to choose a winner.

This begs the question: If a nonpartisan primary works well for electing a Superintendent, why not for Insurance Commissioner, Controller, Secretary of State, or any other statewide office? For that matter, if our city councilmembers and county supervisors can be elected without partisan primaries, why not state legislators?

Why indeed. Prop 14 would extend nonpartisan primaries to every election for statewide office, State Legislature, and U. S. Congress. In each race, the top two finishers in the primary would advance to the November general election in November. Unlike the current rules for Superintendent, under Prop 14 a candidate polling over 50% in the primary would still face a run-off.

You might be thinking, "Hey, I love my political party. Won't Prop 14 make it possible for my party to have no nominee in November? That would be unfair. What's so wrong with giving my party a reserved slot in each race?"

What's wrong is the horrendous gridlock in Sacramento and Washington. We deserve better. The paralysis is a result of severe polarization of the major parties, attributable to shrinkage and concentration so acute that only hard-line candidates can capture nominations.

As recently as 1988, over half of California voters were registered as Democrats; now they comprise a mere 44%. Republican registration has dwindled more precipitously, from 39% to 31%. Both are approaching the status of rumps, parties dominated by the ideologically pure, with no tolerance for dissenters. Pro-life Democrats? None left. Pro-gun-control Republicans? Extinct.

The effect of this shriveling is that a tiny fraction of the electorate now controls major party nominations, and therefore who is elected. For example, the current battle between Meg Whitman and Steve Poizner over who's the more extreme conservative could be won with just 16% of the total vote (half of the 31% party registration). Yet the winner of that contest will be given marquee billing in November and high odds of winning. Why should this be so?

Another example: The race for Insurance Commissioner could be split nearly evenly between the two Democratic candidates, each garnering 22% of the total vote, while the two Republicans each get 15.5%. But who will be left off the November ballot? One of the Democrats, even though he got more votes than either Republican.

In the past, we could justify results like these by pointing out that nominees represent their whole parties, not just those who voted for them, so there will be some major candidate for every voter to support on the November ballot.

That argument held water when only 10% of the electorate belonged to neither major party. But today, 24% of voters register as "decline to state" (DTS) or in third parties. Think about it: nearly one quarter of the voters in California are outside the major parties.

These voters are effectively disenfranchised in primary elections, because they don't vote in the Democratic or Republican primaries. Increasingly, there is no major candidate for them on the November ballot.

(The major parties do graciously allow DTS voters to join them in non-presidential primary elections. But this token gesture never has any effect on major-party nominations. For example, in the June 2008 primary only 8% of DTS-registered voters requested Democratic or Republican ballots. The other 92%, nearly 3 million voters, voted only in nonpartisan races or sat out the primary altogether.)

You know the rest of the story. Rumpy parties nominate far-left and far-right candidates. Inevitably an extremist is elected, and takes office incapable of working with the opposite party. Result: gridlock, further digging in of heels, legislative death spiral. Tune in to the California Channel sometime. You'll see legislators who cannot agree on which way is up or what number comes after four. It's breathtaking.

I am forced to conclude that it no longer makes sense for the two major parties to control who appears on our November ballots.

There is a little relief on the horizon, in the form of less-gerrymandered districts that the Prop 11 (2008) commission will draw. But that won't affect areas with naturally tilted registration, nor will it help in statewide races. We need a new way to elect public officials.

My favorite method is instant runoff voting, in which voters rank candidates in order of preference, and during counting the last-place candidates are progressively eliminated, and their ballots redistributed based on ranking, until one candidate accumulates a majority. In this system, voters can vote their hearts without fear that they'll be throwing their votes away. You may favor a different election method: Condorcet voting, Home Run Derby, or Spin The Bottle. But guess what! None of those is proposed this year!

What is on the ballot is Prop 14's nonpartisan primaries. As I pointed out above, nonpartisan elections are not scary. We see them all the time when we elect the state Superintendent and local officials, and we saw it in 2003 when we recalled Gray Davis and elected Arnold Schwarzenegger.

That recall campaign was inspirational. Do you remember? The candidates were trying to appeal not just to the rumps of their parties, but to the entire electorate. There were clear visions of how each candidate would serve the whole state, not just the interests of one party wing. Contrast that with what we're seeing in this election's high-profile statewide races: formerly rational candidates veer wildly into the radical fringes, shamelessly catering to their party's "base" in order to secure the nomination, after which they'll miraculously rediscover the political center just in time for the general election. It's dishonest and nauseating, and it only reinforces the general distrust of politicians.

Under Prop 14, candidates will be free to offer a single, consistent message for the entire campaign season. Even better, they'll be courting not just rump party members, but every voter in the state or district, so we're far more likely to get winners that everyone can live with.

Election results without and with Prop 14

It's quite likely that some contests will nominate something other than one Democrat and one Republican. (Opponents of gay marriage may want to avert their eyes here.) Yes, you might see two Democrats, two Republicans, a Democrat and a Libertarian, a Republican and a Green, or even (gasp!) one or two independents.

Possibilities like these actually strengthen the case for Prop 14. Imagine, for example, a heavily Democratic legislative district, say in an urban area like Santa Monica or Berkeley. Under today's system, the most out-there leftist candidate is likely to win the Democrats-only primary, after accusing all the other candidates of being disloyal Fascists who will compromise with the enemy on abortion and oil drilling. That candidate's victory in the November general election is a foregone conclusion because of district registration, which runs 55% Democratic, 20% Republican, 3% Green, 2% Libertarian, and 20% DTS.

Now imagine the same district under Prop 14. The leftist still secures one nomination with a solid majority of Democrats (40% of all votes). But the second nomination goes to a more centrist Democrat, who places second in the nonpartisan primary (30%, made up of equal parts Democratic and DTS votes). Come November, the centrist picks up about one-quarter of the Democratic votes (15% of total), along with all of the Republicans. Libertarians and DTS (42%), who choose what they see as the lesser of two evils. This gives the centrist a resounding, 14-point victory. The new legislator is still a Democrat, but knows she has to work for all the people in the district in order to be reelected. This could mean that she will occasionally reach out to similarly elected Republicans, possibly even agreeing which way is up or what number comes after four. Maybe the gridlock will ease.

There are some serious holes in Prop 14. There is no provision for replacing nominees who die, get arrested, or otherwise drop out of a race; such contests would be essentially over. Also, write-in votes will be prohibited, depriving voters of an occasionally useful tool.

More seriously, under Prop 14 candidates will be allowed to hide their party affiliation on the ballot, and instead be listed as "No Party Preference." This strikes me as dishonest and potentially misleading. But we seem to be able to deal with lack of party identification in nonpartisan races today. I'm betting that opposition candidates will make it abundantly clear whenever there are wolves in sheep's clothing.

Perhaps most critically, under Prop 14 a multi-candidate free-for-all could result in two top finishers who have just a small slice of the vote. For example, a 12-way gubernatorial primary could produce nominees with just 10% each, from any or no party. Will the major parties have the discipline and clout to force "noise" candidates to drop out, assuring the party at least one slot? Or will the contests degenerate into chaos? The nonpartisan 2003 recall election might give us a hint: Even though there were over 100 candidates, 80% of voters voted for one of the top two, and no one has disputed the legitimacy of the winner.

Do not judge Prop 14 on whether it's perfect. No ballot proposition is perfect. The question to you, my friends, is this: Will nonpartisan primaries improve the current situation, or will it be the same or worse? I believe that, despite its defects, Prop 14 will be a real step forward. It will re-enfranchise millions of disaffected voters, ease legislative gridlock, and make our elected officials answerable to everyone, not just the rumps.



Proposition 15: Public Campaign Financing Pilot Program – YES

Money wins elections. I wish it weren't so. Elections should be about who has the best ideas, not who's the wealthiest or the best fundraiser. But money buys media exposure, which builds awareness and shapes perceptions that win elections.

Because money wins elections, all but the richest elected officials must spend enormous amounts of time and energy raising cash. It distracts them from their real jobs and distorts their priorities. It makes large donors more important than constituents. It leads to the appearance of corruption. And, too often, it actually corrupts.

Prop 15 is a noble experiment to see whether we can stop public office from being all about money. Prop 15 will temporarily implement public financing for the 2014 and 2018 elections for Secretary of State. After we see how that goes, presumably a future ballot proposition will ask us whether to expand it to other offices.

Under Prop 15, candidates for Secretary of State can voluntarily choose public financing. Those who do are prohibited from raising or spending money from any other sources, including personal funds. In return, the state will give them enough cash to mount a credible statewide campaign. That's $1 million for the primary, and $1.3 million for the general election.

If a non-public-funded opponent outspends them, the state will kick in additional "fair fight money" to match the opponent's spending, up to $4 million for the primary and $5.2 million for the general election. This "fair fight money" will match spending not just by opposition candidates, but also by any outside groups trying to influence the election.

So that's a possible $5 million per candidate in the primary, and $6.5 million per nominee in the general election. If there are more than a few candidates, this could add up pretty quickly. Where's the money coming from?

Not from the General Fund. Prop 15 sets up a special account for public campaign finance, funded by a modest $350 fee on state lobbyists. There are over 4,000 registered lobbyists, so the fee will raise around $6 million every four years. Additional funding will come from a voluntary check-off donation on the state personal income tax form. In the event the account becomes depleted before the election, candidates will be allowed to raise private money, up to what they would have received in public funds.

To prevent everyone in California from running for Secretary of State on the public's nickel, any candidates who want public financing must first prove they have a minimum level of support. As proof of this, candidates must collect signatures and token $5 contributions from 7,500 voters. The token contributions are then deposited into the public finance account.

The amounts given above are for major-party candidates. Minor-party candidates can also qualify with just 3,750 token contributions, and are given a fraction of major-party funding. But they can jump up to major-party levels by collecting 15,000 token contributions. 15,000 tokens will also qualify an independent candidate for full public funding for the general election.

Prop 15 has teeth. Violators of its fundraising ban, spending limits or reporting requirements will face fines and jail time.

Public campaign financing, or "clean money," has enjoyed great success in Arizona, Connecticut, Maine and North Carolina. Campaigns in those states are now about policies and ideas instead of high rollers and interest groups. In two of those states, public funding has enabled legislators to break free of the grip of pharmaceuticals lobbyists and pass beneficial prescription drug pricing reforms. Maybe in California it will eventually reduce the influence of banks, oil companies, the Correctional Peace Officers, the National Rifle Association, and so on and so forth.

Prop 15 is just an experiment—a small step. There's really no risk. If it works, we can look forward to a sunnier day in California politics.



Proposition 16: PG&E's Law – NO

The campaign for Prop 16 asks, "Right now local governments in California can spend public money without letting local voters have the final say. Don't voters deserve the right to have the final say on how our money is spent?"

No!

If I've learned anything from 30 years of analyzing ballot propositions, it's that it's a bad idea to ask voters to vote on individual government expenditures. We voters don't have enough information or context to make sensible decisions. Who knows anything about municipal budget priorities?

What's more, we don't care. I don't want to be asked whether my city should spend $50,000 to repair playground equipment in the local park, because (a) I don't know whether that's a reasonable figure, (b) I don't know what else the city could do with that money, and (c) I don't have time for such trivia. I want the city council to know all this stuff, and make these decisions for me. If I cared that much, I'd be on the freakin' city council. As long as services are maintained and taxes are reasonable, leave us alone.

Having disposed of the advertised reason for Prop 16, let's turn to the real reason it's on your ballot: Pacific Gas & Electric wants to protect its business.

PG&E is an investor-owned utility serving most of northern and central California. Being investor-owned, PG&E's main obligation is to its shareholders, to maximize the value of its stock. That means grow, grow, grow.

California law allows blocks of ratepayers to break away from investor-owned utilities, to join existing public utilities or form new ones. Public utilities exist today in Los Angeles (Dept. of Water & Power), Sacramento (Sac'to Municipal Utilities District), and smaller cities such as Palo Alto and Santa Clara.

What do these breakaways do to PG&E's income? That's right: shrink, shrink, shrink.

Breakaways are a direct threat to PG&E's prime imperative. So PG&E has made the shrewd business decision to sponsor an initiative essentially to outlaw them. Prop 16 will require a near-unattainable two-thirds vote of the residents of an area in order to spend any public funds associated with forming or joining a public utility.

Of course I oppose asking voters about the expenditure, for all the reasons I pointed out above. But Prop 16 goes far beyond that by requiring a two-thirds vote, which is completely unjustified. In principle, a simple majority of voters should be sufficient to select a utility.

And in practice, PG&E pours so much money into resisting breakaways that two-thirds will never happen. For example, when three Yolo County cities recently tried to join Sacramento MUD, PG&E spent over $11 million to defeat the ballot measure.

PG&E executives have made it clear they will continue to spend this kind of money to protect their business. After all, their shareholders demand it. But you and I don't have to support them. Vote no.



Proposition 17: Mercury Insurance's Law – NO

Whose Prop this is I think I know:
The Mercury Insurance Co.
They've paid for ballot space right here
To help their income grow and grow.
We voters now must think it queer
To aid this feckless profiteer,
Denying drivers a fair shake
With penalties far too severe.
 
If you have had a three-month break
In cov'rage, you'll be forced to make
A higher payment just to keep
Your car insured. For no mistake!
Prop 17 would try to sweep
Bad drivers, who should pay quite steep
With good ones, who should get it cheap.
So Mercury: Yourself go [bleep].

If it isn't clear from the foregoing drivel, Prop 17 (a wholly owned subsidiary of Mercury Insurance) would allow auto insurers to add a surcharge to the premium of anyone with a three-month break in coverage over the past five years. In states that currently allow this, the surcharge can reportedly be in excess of 200%. The surcharge will be needed to offset a new discount that Prop 17 will allow insurers to give to drivers who have had uninterrupted coverage with any carrier. Currently such a "loyalty discount" is permitted only for policyholders who stay with the same carrier.

What's in it for Mercury? The opportunity to lure low-cost, loyal customers away from other insurers. These tend to be better drivers because of simple attrition: bad drivers, when faced with enormous premium hikes, tend to shop around and move on. Mercury wants the ability to poach other companies' loyal drivers because they generally make fewer claims, so they cost the company less.

Hmmm. An insurance company that wants to insure only people unlikely to file claims. That sounds familiar. Didn't we just do something about that? Oh yeah, that was health insurers refusing coverage for patients with pre-existing conditions. Everybody agreed that was unethical and immoral, so Congress outlawed the practice. Why should it be different for auto insurers?

Many people who have had breaks in coverage have done so for perfectly legitimate reasons: they're new drivers, or have been away at college or in the military, or have been out with an illness. It would be unfair to penalize these drivers with the Prop 17 surcharge.

But even for those who just plain missed their payments, Prop 17 is a bad idea. Car insurance premiums should be based only on directly relevant data, such as drivers' records and miles driven. As the Los Angeles Times points out, this was the whole impetus behind Prop 103, the 1988 insurance reform bill. There's nothing about missing a premium payment that indicates you're a bad driver. If we pass Prop 17 and allow surcharges for lapses in coverage, it's a slippery slope to allowing them for anything else mathematically correlated with higher claims: changes of address, income level, medical history, ethnicity.

One last point: Our insurance system works best when everyone is insured. That's why car insurance is mandatory, after all. If Prop 17 passes, drivers who have lapsed because they simply couldn't afford the premiums will have an even harder time buying auto insurance. This will move us farther from our goal, not closer. It's also appallingly predatory—it's punishing the victim, and should have no place in our state.



 
 
 
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