This article is from Cal-Tax Digest, published
by the California Taxpayers' Association.
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Citing benefits for the economy and taxpayers, the California Taxpayers' Association has endorsed statewide bond measures on the March 7 ballot that would provide needed water projects and enhance the state's parks system. Cal-Tax also supports an initiative to repeal the 1998 increase in the tobacco tax, while opposing an initiative that would allocate taxpayer dollars to fund election campaigns, including ballot initiatives.

Established in 1926, Cal-Tax is a business-oriented, nonpartisan association conducting policy research and advocacy with the dual mission of protecting members from unnecessary taxation and promoting efficient, quality government services.

"These ballot measures could have a profound impact on the future of the California economy," said Cal-Tax President Larry McCarthy. "The bond measures in particular translate into quality-of-life issues by assuring availability of clean water that is critical to future growth in California. This state must invest in its infrastructure. Water, transportation and educational institutions are keys to a sound economic future."

In 1998, Cal-Tax supported the successful $9 billion-plus statewide school construction bond. The organization is hopeful that additional funding for transportation infrastructure will be addressed by the Legislature in time to place a measure on the November 2000 ballot.

Meeting November 18, the association's Board of Directors made the following recommendations on ballot propositions that are considered within the organization's purview:

• Proposition 12. (SUPPORT) The Parks, Water and Coastal Protection Act provides for the sale of $2.1 billion in state general obligation bonds to improve parks. Taxpayer impact: Approval of this bond means that, without raising taxes, desirable parks, water and coastal protection become higher budget priorities for the state. Existing tax dollars will be invested in important public resource assets to improve quality of life and the business climate in California.
• Proposition 13. (SUPPORT) The Safe Drinking Water, Clean Water, Watershed Protection, and Flood Protection Act would authorize sale of $1.97 billion in state general obligation bonds to improve and maintain the state's water supply. Taxpayer impact: Approval of this bond means that, without raising taxes, building water facilities, conservation, clean water and flood control become higher budget priorities for the state. Availability of clean water improves quality of life and the business climate in California.
• Proposition 20. (OPPOSE) The California State Lottery: Cardenas Textbook Act of 2000, which would dedicate 50 percent of unclaimed lottery prize money, interest and other surplus lottery funds to instructional materials. Taxpayer impact: Unnecessarily earmarks lottery education funds, which takes away local discretionary power.
• Proposition 25. (OPPOSE) Election Campaigns. Contributions and Spending Limits. Public Financing. Disclosures, an initiative statute that would limit individual contributions to candidates for state or local office; provide taxpayer funding for qualified candidates and ballot proposition campaigns; ban for-profit corporate contributions to candidates and their campaign committees, and create voluntary spending limits. Taxpayer impact: Annual cost to taxpayers of $40 million or more at the state level and more than $1 million annually at the local level. Would encourage ill-considered, poorly drafted initiatives on statewide ballots.
• Proposition 28. (SUPPORT) Repeal of Additional Tobacco Surtax Enacted by Proposition 10, an initiative statute that would roll back the 50 cents-a-pack cigarette tax increase that was imposed by the Proposition 10 initiative on the November 1998 ballot. Taxpayer impact: The tobacco tax punitively singles out a specific category of consumers for higher taxes, and allows these public funds to be budgeted and spent by unelected special interests. As smoking declines, so will the revenues, but the programs will require more money.

The Cal-Tax Board of Directors also voted to support two referenda that would block 1999 legislation to overturn a state Supreme Court ruling and allow third-party lawsuits against insurance companies. If these referenda qualify, they will be Propositions 30 and 31 on the March ballot.

In evaluating bond proposals, Cal-Tax criteria includes: The bond is for capital outlay or infrastructure, covering land acquisition, and is not to be used for maintenance, operations, non-construction salaries or ongoing costs; non-bond financing is not viable; the project will benefit future taxpayers whose taxes will help retire the bonds over the next 20 to 30 years; statewide bond funds should be used for projects of statewide significance, and interest rates are not abnormally high and the overall debt level will not be excessive.

Here is a closer look at the propositions on which Cal-Tax has positioned:

Water. The $1.97 billion bond includes $630 million for supply, reliability and infrastructure, and a significant portion would be used as state matching funds for projects that have local or federal support. About $70 million would be set aside to make drinking water safe; $292 million is for flood protection; $468 million for watershed protection; $355 million for clean water and recycling, and $155 million for conservation.

Using statistics from the Department of Water Resources, supporters of the bond measure say it will provide enough additional water to serve 8 million people.

Cal-Tax has signed a ballot argument in support of this measure.

Parks. The $2.1 billion in bonds for park improvements includes $388 million to cities, counties and park districts, based on population; $200 million to purchase open space, and $100 million for park improvements benefitting low-income and at-risk youth. The state Department of Parks and Recreation would receive $545 million. More than $600 million would go to various conservancies that protect Lake Tahoe, the Santa Monica Mountains and other regions, plus threatened and endangered species.

Years of under-funding have left state and local parks with inadequate facilities. No bonds have been approved for parks in 11 years. "We must invest in these important assets to enhance and preserve their value," Mr. McCarthy said.

Cal-Tax has signed a ballot argument in support of this measure.

Campaign Finance. An initiative measure, Proposition 25 seeks to limit campaign contributions to $3,000 from an individual to a state or local office ($5,000 for statewide constitutional offices), and place limits on the time funds can be raised by candidates. There would be voluntary spending limits, with Assembly candidates limited to $300,000 for the primary and $400,000 for the general election; Senate candidates $500,000 for the primary and $800,000 for the general; governor $6 million for the primary and $10 million for the general; ballot initiatives $6 million per election; and, for political parties, up to 25 percent of the candidates' voluntary spending limit.

This initiative, sponsored by Ron Unz and Tony Miller, would limit contributions of certain groups, such as businesses, labor, political action committees, and political parties, and thereby unfairly restrict their participation in the political process.

The measure also would tilt the playing field in favor of proponents of appealing but deceptive initiatives. Such initiatives typically require relatively little spending by proponents but large sums by opponents to educate the public.

Cal-Tax is part of a coalition opposing this measure and will sign a ballot argument against it.

Tobacco Taxes. Proposition 28 repeals the 50-cents-a-pack cigarette tax increase enacted in November 1998 by Proposition 10, which Cal-Tax opposed. The tobacco tax is regressive, imposing a burden on the public regardless of ability to pay. While popular to burden tobacco companies, the tax is not paid by the companies, but rather by those who choose to smoke.

In fact, Proposition 10 has created a new state bureaucracy shielded from legislative oversight and constitutional spending limits, and spends almost all the money on programs unrelated to smoking.

This initiative is sponsored by Ned Roscoe, owner of Premium Tobacco Stores, Incorporated.

Lottery Funds. Sponsored by Assemblyman Tony Cardenas, Proposition 20 was placed on the ballot by the Legislature to give education additional lottery funding from unclaimed prizes, interest or lottery surplus funds. This is in addition to current law that gives education 34 percent of the proceeds. The measure dictates that the additional money, an estimated $80 million in 1999-2000, be spent on instructional materials, such as textbooks.

While Cal-Tax supports additional spending on education, the measure is opposed because it would take away local discretion to spend lottery revenues by unnecessarily earmarking lottery education funds.

Cal-Tax made no recommendations on bond measures dealing with libraries, forensic crime laboratories and veterans' homes. Noting that Cal-Tax supports additional funding for libraries, crime labs and veterans homes, the organization disagrees with borrowing to fund these programs in light of the state's multi-billion-dollar budget surpluses. Mr. McCarthy said funding of these programs should be provided through the regular government budget process.

A position on Proposition 26, which would make local school bonds easier to pass, was pending. This initiative would lower the threshold for voter approval of local school bonds from two-thirds to a simple majority.