Summaries of March 26, 1996 Ballot Propositions
Click here to see Cal-Tax's positions on these measures.
Seismic Retrofit Bond Act of 1996
Legislative Statute (SB 146, Maddy)
Sponsor: Senators Ken Maddy and Bill Lockyer, Assembly Members Doris Allen, Willie Brown
and Jim Brulte
- Would authorize the sale of $2 billion in general obligation bonds for the seismic retrofit of
state-owned highways and bridges, including $650 million for toll bridges.
- Should this measure fail on the March 1996 ballot, this statute requires the same $2 billion
authorization to automatically be placed on the November 1996 ballot.
After the 1989 Loma Prieta earthquake caused collapses of the Cypress viaduct on Route 880 and
a section of the Bay Bridge, the Legislature enacted legislative priorities for the seismic retrofit of
highway bridges throughout the state. Caltrans identified 1,039 bridges in need of retrofitting at a
cost of approximately $722 million, funded from the State Highway Account (gas tax revenue).
Following the 1994 Northridge earthquake, Caltrans identified an additional 1,330 highway
bridges in need of seismic retrofitting. The Legislature placed an unsuccessful $2 billion general
obligation bond on the June 1994 ballot, with $950 million earmarked for seismic retrofitting of
highways and bridges. The remainder would have been directed to repair of damage and housing
assistance for the Northridge earthquake. Proposition 1A was defeated, getting 47.5% of the vote.
Retrofitting of the 1,330 highway bridges identified in Phase II carries a price tag estimated at
$1.35 billion. The retrofit of eight state-owned toll bridges (six in the San Francisco Bay area)
will cost an additional $650 million, totaling $2 billion. To date, it has been assumed that the
State Highway Account would pay for the highway bridge retrofitting and toll revenues would
pay for the toll bridge retrofitting.
Work has begun on Phase II projects, funded from the State Highway Account. In addition, $56
million in toll bridge retrofitting funding has been authorized through March 1996, funded 20
percent from the State Highway Account and 80 percent from the Toll Bridge Revenues Account.
If approved by voters, funds already expended from the State Highway Account for Phase II
projects and the $56 million for toll bridge projects would be reimbursed from bond proceeds.
Assuming 25-year bonds are sold at an interest rate of 6 percent, the total cost would be $3.6
billion ($2 billion in principal, $1.6 billion in interest). The average annual payment from the
General Fund would be about $142 million. (This is a static analysis. It does not consider that
investment in public facilities creates an economic stimulus which creates private sector jobs.
Higher levels of employment resulting from public facilities investment will partially offset debt
service costs associated with borrowing during development and construction stages.)
Support arguments signed by: Kirk West, president, California Chamber of Commerce; George
Deukmejian, former governor, State of California; Richard Andrews, director, State Office of
Emergency Services; George Housner, professor emeritus, California Institute of Technology;
Maurice Hannigan, retired commissioner, California Highway Patrol, and Glen Craig, former
commissioner, California Highway Patrol.
- Without raising taxes, Proposition 192 will protect Californians from potential damages from
- California residents and commerce benefit from the measure by removing risks and
transportation problems presented by unsafe bridge and overpass structures.
- Proposition 192 will create jobs and boost our economy.
- Needed transportation projects are being delayed in order to complete seismic retrofit projects.
Bond funding would allow both programs to remain on track.
Opposition arguments signed by: Assemblyman Bernie Richter, Assemblyman George House
and Assemblyman Bruce Thompson.
- Proposition 192 is a $2 billion bond that will cost taxpayers billions to repay.
- Seismic repairs can be financed by freezing the growth of run-away bureaucracies, using
previously authorized bonds, or other proposals put forward by taxpayer groups and
Property Taxation: Purchase or Change in Ownership: Parent-Child Transfer Exclusion.
Legislative Constitutional Amendment (ACA 17 of 1994, Knowles)
Sponsor: Assemblyman David Knowles
- Would amend the Constitution to exempt real property transferred between grandparents and
grandchildren, if both parents of the grandchildren are deceased as of the date of the purchase
or transfer, from reassessment by excluding such transfers from the term "change of
- Would apply to purchase or transfers of ownership occurring on or after the date upon which
this amendment is approved by voters (after March 26, 1996).
- Would apply to the purchase or transfer of the principal residence of the grandparent and the
first $1 million of the full cash value of other property.
- The exemption for the principal residence of the grandparent would not apply if a grandchild
had previously received a principal residence, or interest therein, that was exempt from
reassessment through a purchase or transfer from a parent. Rather, the full cash value of the
grandparent's principal residence could apply to the $1 million exemption of all other real
property transferred from parents and/or grandparents.
Under Proposition 13, real property in California is taxed on the basis of its acquisition value,
and is reassessed when there is a change in ownership or when new construction occurs. "Special
valuation" provisions have been created since passage of Proposition 13 for a variety of
circumstances. Voters approved an amendment in November 1986 (Proposition 58), which
allowed the Legislature to exempt from reassessment property transfers between parents and
State Government: Existing law would require the state to backfill any property tax loss to
schools, which would be about half of any local property tax loss.
Local Government: According to the Legislative Analyst, because these purchases and transfers
occur infrequently, the property tax revenue loss would not be significant. After several years, the
loss statewide could be about $1 million annually.
Support arguments signed by: Assemblyman David Knowles, Senator K. Maurice Johannessen,
and Assemblyman Bill Hoge.
- Under current law, grandparents can transfer property to their immediate children and then to
the grandchildren without reassessment, but only if the intervening generation is alive at the
time of the transfers. This proposition would correct the unfair situation where such a transfer
is impossible because the parents are deceased.
- Under current law, the transfer of property from parent to child is a proper way of providing
and safeguarding a child's welfare and future. Allowing grandparents to provide for
grandchildren where parents have died is just as proper.
- This measure will have minimal revenue consequence on state or local governments because
it would have infrequent application, but for those families to whom this would apply, this is a
fair and compassionate measure.
Opposition arguments signed by: Gary B. Wesley, attorney at law.
- The automatic reassessment provision of Proposition 13 has caused a gradual but massive
shift of the overall property tax burden from owners of commercial and industrial property to
owners of residential property. Instead of correcting this inequity, this measure would increase
the unfairness of the property tax system and benefit some privileged persons.
- To eliminate the unfairness of Proposition 13, property should be periodically reassessed
while automatically lowering the tax rate so that government would not get more money just
because property values increase.
Prisoners: Joint Venture Program: Unemployment Benefits. Parole.
Legislative Statute (SB 103, Hurtt)
Sponsor: Senator Rob Hurtt
Would prohibit inmates who participate in the Joint Venture Program (JVP), and then are
released from prison, from collecting unemployment insurance benefits based on their work
experience in the JVP.
Under the JVP in the state prison system, businesses may contract with the Department of
Corrections to hire inmates to produce, on the grounds of state prisons, various goods and
services for sale. According to the Legislative Analyst, about 200 inmates participated in Joint
Venture businesses at any one time in 1995.
Businesses participating in the JVP pay the same types of payroll taxes as businesses not
involved in the program, including unemployment insurance taxes. Existing law allows inmates
to collect unemployment insurance benefits after their release from state prison based on their
employment in the JVP.
The reason this measure must be approved by voters is because the JVP was approved by voters
in 1990, and thus any amendments to the program must also be approved by voters.
State Government: According to the Legislative Analyst, the overall fiscal effect of the measure
is likely to be minor.
Support arguments signed by: Rob Hurtt, Senate Republican leader; Jeff Thompson, legislative
director, California Correctional Peace Officers Association; Tom McClintock, taxpayer
advocate; Assemblyman Howard Kaloogian, and Dean Andal, member, State Board of
- Businesses and taxpayers are being fleeced out of more of their hard-earned money due to a
loophole in state law. Released prisoners are perpetrating yet another crime on Californians by
collecting unemployment checks upon release from prison.
- The more unemployment checks cashed by paroled inmates, the higher the unemployment
insurance premiums Joint Venture businesses must pay for all their employees. This cost is an
impediment for businesses involved in the program and for those wishing to participate, and
an affront to taxpayers.
Opposition arguments signed by: Stephen C. Birdlebough, member, Friends Committee on
- Public safety suffers when inmates leaving prison cannot plan on a stable source of minimal
income until they find a job. Victims' rights suffer when inmates are not sufficiently
reintegrated into society to pay full restitution.
- Unemployment is a special problem for inmates released during an economic downturn.
Without financial resources, ex-prisoners are more likely to return to crime to support
- JVP companies already get substantial advantages over other employers and don't need to be
exempt from paying unemployment benefits.
Murder. Special Circumstances.
Legislative Statute (SB 32, Peace)
Sponsor: Senator Steve Peace
- Would add first-degree murder during commission of a carjacking or kidnap-carjacking to the
list of special circumstances that require the death penalty or life imprisonment without
- Would add first-degree murder of a juror in retaliation for, or to prevent the performance of,
the victim's official duty to the list of special circumstances that require the death penalty or
life imprisonment without parole.
Current law imposes a sentence of 25 years to life for first-degree murder, unless one of 19
special circumstances is found to have existed which results in the imposition of the death
penalty or life imprisonment without the possibility of parole. Many first-degree murders are also
special circumstances and therefore carry a death penalty or life imprisonment sentence. Murders
committed during carjacking and kidnap-carjacking are not defined as special circumstances.
However, robbery is a special circumstance, and prosecutors have been able to use the robbery
circumstance in carjacking prosecutions.
Murder of witnesses, prosecutors and judges in retaliation for, or to prevent the performance of,
their official duty are also special circumstances requiring the death penalty or life imprisonment
According to the Legislative Analyst's Office, this measure would have minor additional state
costs. Potential costs are diminished by the fact that many carjacking murders are currently
prosecuted with the robbery special circumstance, which has the same effect as creating a special
circumstance specifically for carjacking. The added special circumstance for murdering a juror
would have little effect, because that crime occurs infrequently.
Support arguments signed by: Senator Steve Peace, Assemblyman Peter Frusetta, Michael
Bradbury, district attorney of Ventura County; Assemblywoman Susan A. Davis, Assemblyman
Jim Morrissey, and Michael Ferguson, district attorney of Nevada County.
- Proposition 195 updates California's death penalty law to include all currently defined first-
degree murders as special circumstances that allow the death penalty to be imposed. It also
expands the law to allow the death penalty for the retaliatory murder of a juror. These are
heinous crimes that should carry the maximum punishment.
Opposition arguments signed by: Senator Milton Marks, Right Reverend Jerry A. Lamb, bishop,
Episcopal Diocese of Northern California; Mike Farrell, president, M, J & E Productions, Inc.;
Rabbi Leonard I. Beerman, Los Angeles; Jeanette Arnquist, director of human concerns, Roman
Catholic Diocese of San Bernardino, and Sam Reese Sheppard, director, Murder Victims'
Families for Reconciliation.
- The death penalty is a failure. It does not prevent crime.
- The death penalty takes too much valuable time of police and courts, and it diverts resources
away from other government functions that could help prevent crime.
- The death penalty erodes our vision of the dignity of human life. Government policies should
promote awareness of the value of human life.
Legislative Statute (SB 9, Ayala)
Sponsor: Senator Ruben Ayala
Would add first-degree murder by drive-by shooting to the list of special circumstances that
require the death penalty or life imprisonment without parole.
Current law imposes a sentence of 25 years to life for first-degree murder, unless one of 19
special circumstances is found to have existed which results in the imposition of the death
penalty or life imprisonment without the possibility of parole. Many first-degree murders are also
special circumstances and therefore carry a death penalty or life imprisonment sentence. Murders
committed during a drive-by shooting are not defined as special-circumstances.
The Legislative Analyst's Office says this measure would increase state costs, primarily as a
result of longer prison sentences for those sentenced to life imprisonment without the possibility
of parole. Costs are unknown, potentially ranging into several millions of dollars annually.
Support arguments signed by: Governor Pete Wilson, Senator Ruben Ayala, and Greg Totten,
executive director, California District Attorneys Association.
- Murder by drive-by shooting has reached epidemic levels. An average of one young person
per week is shot in Los Angeles, but the problem is not just an inner-city phenomenon.
Victims are often innocent bystanders. Proposition 196 would deter gang members and others
by imposing the highest penalty for this crime.
Opposition arguments signed by: Senator Milton Marks, Robert P. Owens, retired chief of police,
Oxnard; Right Reverend Jerry A. Lamb, bishop, Episcopal Diocese of Northern California;
Michael Hennessy, sheriff, San Francisco, and Wilson C. Riles Jr., executive director, American
Friends Service Committee of Northern California.
- The death penalty has failed to reduce murders and other kinds of violence. Violence
decreases after death penalties have been repealed.
- This measure would place too much emphasis on the location of the shooter - a killer on foot
may not face the same punishment.
- The U.S. Supreme Court requires that there be a meaningful distinction between death penalty
special circumstances and other murders. This measure does not make that distinction.
Wildlife. Mountain Lions.
Legislative Statute (SB 28, Leslie)
Sponsor: Senator Tim Leslie
- Would change the vote requirement (to majority from four-fifths) for the Legislature to amend
or repeal laws passed in Proposition 117 (1990) concerning mountain lions and removes the
provision that those changes be consistent with the purposes of Proposition 117.
- Would eliminate the designation of the mountain lion as a specially protected mammal,
reclassifying it as a game species.
- Would require the Department of Fish and Game to prepare and implement a mountain lion
- Would authorize the Department of Fish and Game to designate persons to remove or kill
mountain lions considered safety threats.
- Would reallocate funds that have been earmarked for mountain lion preservation efforts and
habitat acquisition, specifying that some funds be spent on mountain lion management and
Proposition 117 established special protections for mountain lions and created the Habitat
Conservation Fund (HCF), earmarking $30 million a year from the general fund and various
environmental special funds. The HCF generally provides funds for acquisition of habitat lands
for mountain lions, deer, other rare animals and plants, wetlands, and parks.
Proposition 117 prohibits the killing or taking of mountain lions except when public safety is
threatened, livestock are damaged, or people are attacked. In 1994, 131 lions were killed because
of safety or damage concerns.
Mountain lion populations have increased from an estimated 3,000 in the 1970s to about 6,000 in
1994. In 1994, there were 322 confirmed incidents of lion-inflicted damage to livestock and pets.
Five people have been killed by mountain lions since 1890, and two of those killings happened in
1994. Other attacks have also been reported, heightening public perceptions of danger.
The measure would reallocate up to $250,000 annually for three years from land acquisition to
the Department of Fish and Game for preparation and implementation of the mountain lion
management plan. After 1998-99, the measure calls for a maximum of $100,000 annually until
2020. The measure also declares legislative intent that an additional amount up to $250,000 per
year be appropriated from other unidentified sources, to be used for public safety and information
programs related to mountain lions.
Support argument signed by: Jack Parnell, former director, California Department of Fish and
Game; Donald Neal, wildlife ecologist; Senator Tim Leslie; Terrence Eagan, former
undersecretary, California Resources Agency; Wayne Long, former chair, California Resource
Conservation Commission, and Steven J. Arroyo, father of mountain lion attack victim.
- Wildlife management has been made difficult because the experts have been precluded from
managing a key predator species. The mountain lion population has doubled, causing
excessive predation on other animal populations, including endangered bighorn sheep. People
are being attacked, public safety is in danger, and livestock are being killed, causing increased
costs to consumers. Special interests caused these problems with Proposition 117, and voters
should restore common sense to wildlife management.
Opposition argument signed by: Senator Henry Mello; Maurice Getty, president, California Park
Rangers Association; Wayne Pacelle, vice president of government affairs, Humane Society of
the United States; Patricia Forkan, president, Humane Society of the United States; Bernadette
M. Ertl, Sierra Club of California, and Jill Dampier, California Park Rangers Association.
- This measure is not about proper wildlife management - it is an attempt to allow trophy
hunting, which is cruel. It could be supported if it only included one line maintaining the ban
on trophy hunting. The gun and trophy hunting lobbies are behind this proposal and only want
trophy hunting for mountain lions legalized. The Department of Fish and Game is "playing
chicken" with the public by not killing dangerous lions under current law provisions.
Elections. Open Primary.
Sponsor: Richard B. Ferrari and Trish Hooper
- Would provide that all persons entitled to vote, including those not affiliated with any
political party, shall have the right to vote during any election for any candidate.
- Would provide for a primary ballot on which names and party affiliations of all candidates are
placed randomly and not grouped by political party. Voters would choose a candidate for each
office, regardless of party affiliation. The top vote getters in each party would then face each
other in the general election.
Open primaries in California are considered one response to increased polarization and
partisanship in the California Legislature. It would also offer a growing number or independent
voters an opportunity to vote in primary elections.
For years, California had a cross filing system where candidates could enter all parties' primaries.
This tended to minimize partisanship but was repealed in 1959. Proposition 198 is analogous to
the current special election procedure where all candidates are listed on a single ballot.
Local governments should realize some savings primarily due to preparation of fewer ballots. Net
savings would be insignificant.
Support arguments signed by: Becky Morgan, former state senator; Senator Lucy Killea; Eugene
C. Lee, director of the Institute of Governmental Studies, University of California (1967-1988);
Dan Stanford, chairman, California Fair Political Practices Commission (1983-1986), and
Houston Flournoy, state controller (1966-1974).
- California's closed primary election system limits voters' choices for candidates within their
own party and excludes 1.5 million independent voters from voting in primary elections at all.
- An open primary will permit voters to select the best candidate, regardless of party.
- An open primary will increase voter participation by providing voters a real choice and
forcing candidates to focus on policy issues instead of partisanship.
- An open primary will force all candidates to listen to all voters, not just those registered in
their own party.
- A 1986 U.S. Supreme Court decision acknowledged that dire consequences predicted by open
primary opponents did not materialize in 29 states that have moved to more open primaries.
Opposition arguments signed by: John S. Herrington, chair, California Republican Party; Bill
Press, chair, California Democratic Party; Bruce Herschensohn, senior fellow, Claremont
Institute; John Van de Kamp, former California Attorney General, and Alison Dundes Renteln,
acting director, USC Unruh Institute of Politics.
- Party members should be allowed to choose their nominee, free from outside influence.
- Political parties engage in a healthy debate about which candidates will lead them. This gives
voters a real choice between different candidates, from different parties, offering different
- Thomas Jefferson advised against the amalgamation of parties and applauded distinct political
parties with clear philosophical differences as "useful watchmen for the public."
- The U.S. Supreme Court has ruled that political parties have the right to determine who votes
in their primaries.
- Open primary is an effort by ambitious politicians to change the rules to serve their own
Mobilehome Rent Assistance. Mobilehome Rent Control Restrictions.
Sponsor: Californians for Mobilehome Fairness
- Would phase out existing state and local mobilehome rent control laws and prohibit new
mobilehome rent control laws. As mobilehome owner sells, transfers or sublets the
mobilehome, rent restrictions would be eliminated.
- Would require mobilehome park management to administer and provide a rent subsidy equal
to a 10% discount on monthly rent to low-income tenants meeting residency requirements.
This requirement would operate when 10% or less of occupied spaces are covered by rent
control or rent subsidy.
- Would establish priority for and conditions for losing rent subsidy.
- Would prohibit state and local requirements for reductions in rent and limits on increases in
rent to less than specified cost-of-living indices.
- Requires future state rent control to be approved by voters.
Roughly 400,000 California households live in factory-built mobilehomes. Mobilehomes are
most often placed in rented spaces in mobilehome parks. Mobilehomes are difficult and
expensive to move. Typically, mobilehomes are sold when the owners move to another location.
Local rent control laws exist in about 100 cities and counties, limiting the amount of rent
mobilehome park owners may charge those renting space. The laws typically limit increases to
amounts equal to or less than inflation. Some local ordinances allow rent increases when the
mobilehome is sold, transferred or sublet. Rent control laws apply to nearly 150,000
mobilehomes in California.
According to the Legislative Analyst, cities and counties may experience increased costs to
administer phase-out of rent control. Cost savings could also result. Local government would
have decreased responsibility to oversee rent increases. In the long term, local agencies would
experience savings up to several million dollars annually when local rent control is eliminated.
Support arguments signed by: Lewis K. Uhler, president, National Tax Limitation Committee;
Sandra L. Butler, president, United Seniors Association, and Vickie M. Talley, executive
director, Manufacturing Housing Educational Trust of Orange, Riverside and San Bernardino
- Proposition 199 would help stop the decline of affordable housing in California. Over 600
mobilehome parks have closed since 1981. This dramatic decline in park rental spaces drives
up the cost of mobilehome housing and is the result of local rent regulations.
- Mobilehome housing experts indicate that local rent regulations artificially increase the resale
price of mobilehomes by thousands of dollars, making units less affordable. This primarily
affects seniors and younger families who are low-income or fixed-income families.
- California taxpayers have paid over $450 million in attorneys' fees and administrative costs
for 102 different mobilehome rent regulations in California. On an ongoing basis, $45 million
would be necessary each year to continue these regulations. Proposition 199 will end this
waste. Economists, housing experts and taxpayers recognize it is time for change.
Opposition arguments signed by: Dave Hennessey, president, Golden State Mobilehome Owners
League; Mary Tucker, state legislative committee chair, American Association of Retired
Persons, and Lois Wellington, president, Congress of California Seniors.
- Proposition 199 would enable mobilehome park landlords to raise mobilehome rents without
limit whenever they choose.
- 400,000 Californians, mostly senior citizens, own mobilehomes and rent space in a
mobilehome park. Rents can be higher than social security and retirement income. Increases in
mobilehome rental space traps mobilehome owners since it can cost $10,000 to move a
mobilehome and available space is scarce. Mobilehome owners must pay the rent or lose their
homes. Mobilehome owners who cannot pay escalating rents lose the equity in their homes.
- Since the expiration of Los Angeles County's rent control ordinance, an 83-year-old Los
Angeles widow faces loss of her home of 20 years. Rent has risen to $845 per month, while
her social security check totals $783. She faces eviction, repossession of her home and total
disruption of her final years.
- Proposition 199 is phony. It is seeking to protect $330 million in resale value that was gained
when local regulations were adopted. It would wipe out 80 local initiatives and laws passed by
voters and local officials. It would prevent local voters from ever passing another mobilehome
rent protection law. It would give the Legislature all power over mobilehome rents.
- The initiative would not enable administrative funds to be diverted to public safety and other
essential services since rent protection administration is funded by fees paid by mobilehome
and park owners.
No-Fault Motor Vehicle Insurance. Tort Liability.
Sponsor: Alliance to Revitalize California
- Would eliminate liability for auto accident injuries (not property damage) for personal and
commercial vehicles, except for drunken drivers or those committing a felony.
- Drivers' own no-fault Personal Injury Protection (PIP) policies would cover their own costs
(and their passengers' costs) of injuries from auto accidents. This would include medical costs,
lost wages, and other injury-related costs. Standard policies would cover $1 million in
damages, but owners of non-business vehicles could sign a waiver of full benefits and
purchase a minimum policy covering $50,000 per person.
- Motorists could also purchase pain and suffering coverage for themselves and their
passengers. Pain and suffering awards would be determined by a schedule developed by the
state insurance commissioner.
- Property damage liability would not be affected - except that uninsured drivers would be
prohibited from suing for recovery of property damage to their vehicles.
- Uninsured drivers would have no coverage.
- Insurance companies would be required to settle claims in 30 days, with 24% interest on late
payments. Disputes would go to arbitration.
- Businesses and government agencies could self-insure, provided they meet financial
Legal costs in California are high, both for the private sector and for government. Cal-Tax's
California Taxing and Spending publication shows that California state and local governments
rank fourth highest in the nation in spending on the judicial and legal system. These costs are
51% higher than the national average.
Backers of this measure say bodily injury claims make up the bulk of insurance costs and invite
the most fraud. They state that more than $2 billion per year in legal fees - almost 20% of auto
insurance premiums - is paid to auto accident attorneys.
The Legislative Analyst's Office estimates state and local government savings and costs as
The net effect of the above estimates is uncertain, but probably a net savings to state and local
- Health care savings: State and local governments would have reduced basic and emergency
health care costs for low-income persons who have no medical insurance. When these persons
are injured in auto accidents, many of their costs would be borne by PIP insurance, saving
potentially over $100 million annually.
- Loss in vehicle registration revenues: Because the measure requires proof of insurance when
registering a vehicle, some owners may decide to drive unregistered rather than get insurance,
causing registration revenue losses in the tens of millions of dollars, potentially over $100
- Savings from reduced government liability: Drivers who are injured by government
employees driving on government business would be compensated by their own PIP
insurance, producing savings to state and local government in the tens of millions of dollars.
- Loss in gross premiums tax revenue: Total insurance premiums may decrease because of
lower legal costs, causing a reduction in state gross premiums tax revenue. However, premium
revenue may increase if significant numbers of currently uninsured drivers purchase
insurance. The net effect is probably a revenue loss, potentially greater than $10 million
- Decreased health insurance costs for employees: Medical benefits for auto accident injuries
would be paid first from PIP insurance before medical insurance, leading to a potential
reduction in employee medical insurance premiums for state and local governments.
- State administrative costs: Costs to develop regulations and ensure compliance would be
about $15 million initially, and about $10 million annually.
Private companies would likely realize savings from reduced liability costs, especially companies
with large vehicle fleets. Proponents claim that companies will save the entire cost of their
current auto liability insurance because employees' bodily injury claims would be covered under
workers' compensation insurance. Medical insurance costs could decrease also, since PIP
insurance would pay benefits first for auto accident injuries.
Support arguments signed by: Jennifer Frank, director, Voter Revolt to Cut Insurance Rates;
Andrew Tobias, winner, Consumer Federation of America Media Service Award; Jim Conran,
executive director, Consumers First, and M. J. Hannigan, former commissioner, California
- Proposition 200 removes lawyers and lawsuits from most auto accident cases, saving millions
of dollars. RAND Corporation says that this proposal could reduce insurance premiums by
- In California, injury claims are filed in 67% of accidents, compared to 29% nationally -
California is swamped with phony claims.
- This proposal ensures that you get compensated more quickly and fairly.
- Children, pedestrians, and bicyclists are covered automatically. Drunken drivers can still be
- Uninsured drivers will not be a problem; they won't be able to sue.
Opposition arguments signed by: Wendell Phillips, president, California Council of Police and
Sheriffs; Dr. Eugene Mitchell, president, Consumer Federation of California, and Harvey
Rosenfield, author of Proposition 103.
- This measure makes every accident your fault. Good drivers will pay for bad drivers. You will
have no recourse against reckless drivers, even if they kill your child.
- It puts decisions about how much you pay back in the hands of insurance companies.
- In other states with some form of no-fault, insurance rates went up faster than in California.
Other states are repealing their no-fault laws.
- The measure has too much fine print, would restrict your medical options, and would be
partially administered by the Department of Motor Vehicles. It has no guarantee of lower cost.
Attorneys' Fees. Shareholder Actions. Class Actions.
Sponsor: Alliance to Revitalize California
- In any shareholder derivative or securities class-action lawsuit, the losing party would pay the
winner's legal expenses. This would not apply to individual, non-class-action lawsuits.
- Named plaintiffs or their attorney would be required to post a bond to secure their potential
liability for legal costs, unless the named plaintiffs represent at least 5% of the class.
- The court would have the option of charging the losing party's attorney rather than the losing
- The court could waive the liability of an individual member of the losing party if the lawsuit
was substantially justified and if requiring that member to pay would be unjust.
When a corporation's stock price fluctuates, investors sometimes sue the company to try to
recoup their losses, claiming that the company did not provide proper information to investors.
Shareholder litigation is a growing and serious problem, especially with younger companies
which have more volatile stock prices. Silicon Valley high-technology companies have been
significantly affected by these lawsuits, causing losses of millions of dollars.
Recently enacted federal legislation makes similar changes to federal court procedures, and this
measure seeks to change California state court procedures to ensure that future shareholder
lawsuits do not simply shift from federal courts to the state courts.
According to the Legislative Analyst's Office, the fiscal effect of this measure is unknown, but
probably insignificant, since few of these cases are tried in state courts. This analysis was written
before the federal law was approved, and does not account for potential shifts of cases from
federal courts to the state courts if this proposal is not enacted.
Support arguments signed by: Charles Schwab, CEO, Charles Schwab & Co.; Kirk West,
president, California Chamber of Commerce; Lewis K. Uhler, president, National Tax Limitation
Committee, and Alan Shugart, chairman, Seagate Technology, Inc.
- Proposition 201 stops unscrupulous lawyers from filing frivolous suits against companies
generating the most new jobs for California, the high-tech companies. Lawyers use
professional plaintiffs to sue multiple companies. One such plaintiff was in 38 different
- In one year, one lawyer took almost $250 million out of the California economy. Lawyers get
big fees, but shareholders only get a few cents per share from these settlements, providing a
big incentive for lawyers to instigate these suits.
Opposition arguments signed by: Howard L. Owens, legislative director, Congress of California
Seniors, Inc., and Leah Kane, chair, Keating Victims Association of Leisure World, Laguna
- Proposition 201 would weaken protections for pension investments and would hurt seniors.
People would have to pay a deposit to sue erring companies.
- Companies which have settled suits for investor fraud put up money for this measure. This
measure would make it difficult for small investors to sue big corporations for misconduct.
Attorneys' Contingent Fees. Limits.
Sponsor: Alliance to Revitalize California
- If a defendant in a tort action offers an early settlement (within 60 days of receiving a
plaintiff's demand), and the plaintiff accepts, plaintiffs' attorneys would be limited to
contingent fees of 15% of the settlement.
- If an early settlement were offered, but not accepted, and the plaintiff wins a subsequent
judgment or settlement, plaintiffs' attorneys' fees would be limited to 15% of the early
settlement offer, plus an unlimited percentage of any amount in excess of the early settlement
- If a defendant did not make an early settlement offer, the fee limitations would not apply.
Backers of this measure say that large contingency fees (33% to 50%) are an incentive for
attorneys to file numerous frivolous lawsuits in hopes that a few suits may "hit the jackpot." The
expenses caused by a high volume of lawsuits are borne by both the private and public sectors,
requiring greater tax resources to be dedicated to courts, rather than to more productive public
spending, and exposing companies to large financial risks.
In concept, this measure could lead to reduced litigation costs for both the public and private
sectors by providing an incentive for early settlement of litigation. It may reduce the number of
"nuisance" lawsuits by reducing attorneys' monetary incentives to file those suits.
Support arguments signed by: Mary Anderson, executive director, California Business
Roundtable; Garry DeLoss, former executive director, Utility Consumer Action Network;
Thomas Proulx, author of Quicken personal finance software, and Michael Johnson, policy
director, Voter Revolt to Cut Insurance Rates.
- Proposition 202 would stop unfair legal practices and runaway lawsuits from costing more
California jobs and money. Seven lawsuits are filed every minute of each day in California -
far too many phony claims.
- One of every five lawyers in the United States lives in California. This measure would
encourage quicker settlement of legitimate cases and let victims keep a greater share of
- The courts would be less clogged and frivolous lawsuits would be reduced. This measure only
applies to cases with early settlements, so the lawyers deserve less, because they did less
Opposition arguments signed by: Candace Lightner, founder, Mothers Against Drunk Driving;
Harvey Rosenfield, director, Foundation for Taxpayer and Consumer Rights; Michael Shames,
executive director, Utility Consumer Action Network, and Lois Wellington, president, Congress
of California Seniors.
- Proposition 202 limits consumers' attorneys' fees but doesn't do a thing to limit the lawyers for
the big companies, drunken drivers, Charles Keating types, insurance companies, and
manufacturers of dangerous products.
- Contingent fee attorneys are on the consumers' side and shouldn't be restrained while the
business lawyers can keep charging high rates. Rich corporate interests put this on the ballot
to keep consumers from suing them.
Public Education Facilities Bond Act of 1996
Legislative Statute (AB 1168, Campbell)
Sponsor: Assemblyman Robert Campbell
- Would allow the sale of $3 billion in general obligation bonds for local schools and state
higher education facilities. Local school districts would receive $2.025 billion and $975
million would be used for higher education facilities.
- Within the $2 billion proposed for K-12 schools, the measure would provide the following
- No more than $900 million for portable classrooms; reconstruction or modernization projects
including wiring for educational technology; air conditioning for year-round schools;
acquisition of relocatable child care and development facilities for extended day care services;
high priority roof replacement; school security upgrades; abatement of hazardous asbestos and
lead in school facilities; classrooms for severely handicapped pupils; special projects for
districts impacted by the locating or expanding of state and federal prisons, and project
funding for small school districts.
- No more than $100 million for seismic retrofit.
- No more than $25 million for projects that involve joint use of school facilities.
- Would require the Board of Governors of the California Community Colleges to consider
historic significance of buildings that are to be renovated.
- Would require higher education authorities to submit a five-year capital outlay plan and
seismic retrofit priority schedule before receiving any bond proceeds.
- Would require that any funds remaining from previous school construction bond measures
(about $45 million) be transferred to the State School Building Lease-Purchase Fund to be
apportioned by the State Allocation Board according to the Leroy F. Greene State School
Building Lease-Purchase Law.
Since 1982, voters have approved $7.75 billion in state G.O. bond measures for new construction
and modernization of K-12 schools. The most recent statewide school bonds failed on the June
1994 ballot. Those measures were:
According to the Governor's budget summary, K-12 school enrollment will increase between
100,000 and 150,000 pupils a year through the rest of this decade. This places pressure for
expanded school capacity. The Department of Finance estimates total capital outlay need of $30
billion over the next 10 years for K-12 and higher education. The State Allocation Board has
approved (with no funding) priority one and priority two K-12 school projects totaling $960
million. Applications for state funding of new K-12 school facilities total $7.2 billion.
- Proposition 1B: $1 billion for K-12 schools, which barely failed with 49.5 percent yes votes.
- Proposition 1C: $900 million for higher education, which failed with 47.3 percent support.
Higher education enrollments fell after large student fee increases in
the early 1990s. From 1991-92 to 1994-95, enrollment in the UC, CSU, and
CCC systems fell by almost 34,000 students.
However, enrollments are expanding again and are expected to grow by
almost 28,000 students
in 1996-97. The current year brought enrollment increases of about 6,000
Prior to 1986, tidelands oil revenues financed the construction of higher education facilities.
Since then, lower tidelands oil revenues have led to partial reliance on G.O. bonds. Previously
approved ballot measures total almost $2.4 billion. Higher education construction financing has
also been achieved by the use of lease payment bonds authorized by the Legislature. (Lease
payment bonds, because less secure, are more costly to the state.)
Prior to 1990, California was considered a low-debt state. State payments for all kinds of debt
service (including revenue bonds and lease-purchase bonds, as well as G.O. bonds) were 2.5% of
the general fund in 1990-91. That ratio rose to an expected peak of 5.1% during this fiscal year.
The current ratio is considered a moderate debt level compared to other states.
According to the Legislative Analyst's Office, if no additional bonds
are approved, general fund
debt service will begin declining next fiscal year and will be 4.6% of
the general fund in 1998-99. If this measure and the transportation bond
on the March ballot are approved, debt service
would peak in 1998-99 at 5.3% of the general fund, an increase of 0.7%
from the current trend.
California's bond rating has declined in recent years, mostly as a result of short-term budget
deficits. It is possible that a larger debt service burden could cause a reduction in the credit rating
of the state.
If $3 billion in new bond authorizations are sold at 7% interest over 20 years, the total cost to the
General Fund would be about $5.2 billion with annual average payments for principal and
interest of about $260 million. (The official fiscal impact statement is a static analysis. It does not
consider that investment in public facilities creates an economic stimulus which creates private
sector jobs. Higher levels of employment resulting from public facilities investment will partially
offset debt service costs associated with borrowing during development and construction stages.)
Support arguments signed by: Fran Packard, president, League of Women Voters of California;
Lois Tinson, president, California Teachers Association; Kirk West, president, California
Chamber of Commerce; Carol Ruley, president, California State Parent-Teacher Association;
Howard Owens, legislative director, Congress of California Seniors; Dan Terry, president,
California Professional Firefighters.
- To be competitive in a world economy, California must provide first-rate learning
environments for all of its students. Many of California's public education buildings are in
desperate need of repair, and more than half of the schools are over 30 years old. Classrooms
are overcrowded. Schools must be made earthquake safe. Plus, students cannot be expected to
succeed in the information age unless classrooms are equipped with computers and modern
- California's school population is growing, with class sizes nearly one-third larger than the
national average. Also, funds from previous school construction bond acts have been
committed or spent.
- California ranks 50th out of 50 states in computers per student, and this bond issue will help
prepare students for the 21st Century workplace.
- Proposition 203 does not increase taxes. Passage of Proposition 203 conforms to both the
letter and spirit of Proposition 13 and provides desperately needed revenue - without raising
Opposition arguments signed by: Gail Lightfoot, chair, Libertarian Party of California; Ted
Brown, member, Libertarian Party Executive Committee; Pam Probst, teacher.
- Voters rejected a $1 billion school bond and a $900 million college bond in June 1994. Now
politicians want to try again - but now they want $3 billion! They forget the economy is a
mess. Californians are fighting just to pay their bills. We can't afford Proposition 203, which
will raise taxes and government spending. Bonds are not free money, like politicians want you
to think. Proposition 203 calls for taxpayers to pay $3 billion, plus another $2.4 billion in
interest over 20 years. That's right, using bonds almost doubles the cost of any government
project. Instead of biting the bullet now, politicians want our kids and grandkids to pay the
- There are millions of square feet of vacant commercial property in California. Why can't
school districts lease existing buildings instead of undertaking this massive boondoggle?
- Half the state's budget goes to education already. Sixty-four
percent of the education budget
never makes it past the bureaucracy into the classrooms. Public schools
employ 127 non-teachers for every teacher, while private schools only
employ 16 non-teachers per 100
teachers. Proposition 203 means more money to bureaucrats, not students.
- The school establishment pleads poverty - but in fact it wastes huge amounts of money on
administrators and other bureaucrats. There should be plenty of money in each school district's
regular budget to pay for needed projects and maintenance.
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