INITIATIVE UPDATE:
Tom Steyer Vows to Fund Cigarette Tax Initiative; Proponents of Ballot Measures Flock to Attorney General’s Office

Billionaire investor, environmental activist and Democratic campaign donor Tom Steyer announced this month that he will provide significant financial backing to a new initiative that seeks to increase taxes on cigarettes and other tobacco products.

Initiative 15-0081, filed by the California Medical Association, California State Council of Service Employees, and the American Lung Association in California, would increase the cigarette tax $2 per pack. Consumers already pay state and federal taxes of $1.88 per pack of 20 cigarettes in California, and the initiative would increase the total bite of this regressive tax to $3.88 per pack.

Mr. Steyer, who until now has been engaged only on environmental policy issues (including Proposition 39 of 2012, which changed corporate taxes to fund energy-efficiency projects at schools), described the initiative as a “David and Goliath” issue, with the billionaire portraying himself as the little guy pitted against the business community.

The cigarette tax hike measure was just one of many filed recently with the Attorney General’s Office. The other proposals include:

Initiative Would Divert Local Bag Tax Revenue. Several local governments in California have passed ordinances that both prohibit shoppers from obtaining plastic bags, and that also tax paper bags at a minimum of 10 cents per bag. An initiative filed October 2 would change this by diverting bag tax revenue to state coffers.

Initiative 15-0074 would establish the Environmental Protection and Enhancement Fund, administered by the Wildlife Conservation Board. Local governments would be required to send any revenue obtained from local bag taxes to Sacramento for purposes of drought mitigation, recycling, clean drinking water supplies, parks, beach cleanup, litter removal and wildlife habitat restoration.

Local ordinances taxing bags cost taxpayers an estimated $400 million each year, according to the initiative’s proponents.

The initiative was filed by Doyle Johnson, who is represented by Nielsen, Merksamer, Parrinello, Gross & Leoni LLP.

Initiative Seeks Greater Transparency in Legislative Branch. The “California Legislature Transparency Act” (Initiative 15-0083), filed October 12 by Charles Munger Jr. and former state lawmaker Sam Blakeslee, would require the Legislature to videotape all floor sessions and committee hearings, and to post the videos – in their entirety, and without any fee for access – on the Internet within 24 hours of the end of the proceedings.

The measure also would give members of the public the right to make video or audio recordings of all open and public proceedings of the Legislature (currently not allowed unless special permission is granted by lawmakers), and would provide that no bill may become law unless it is published on the Internet in its final form for at least 72 hours before the Assembly or Senate votes on the bill. The measure includes a waiver for bills deemed necessary to address a state of emergency declared by the governor.

Government Employee Pension Reform Measure Filed. Pension reform advocates filed two initiatives October 5 – the first (15-0076) would require voter approval of changes to government employee pensions, and the second (15-0077) would cap government contributions to new employees at no more than 11 percent of an employee’s base compensation and 13 percent of a safety employee’s base compensation. The initiatives were filed by former San Jose Mayor Chuck Reed, former Vallejo City Councilwoman Stephanie Gomes, former San Diego City Councilman Carl DeMaio, former San Bernardino Mayor Pat Morris, Pacific Grove Mayor Bill Kampe and Anaheim Mayor Tom Tait.

Mr. DeMaio told the San Jose Mercury News that “skyrocketing pension costs” across the state have taken funds needed for essential services including public safety, libraries and road repairs, and he said his plan “empowers the state voters to do what the politicians have failed to do.”

The Mercury News added: “Government labor groups blasted the proposal as an attack on popular public workers.”

Initiative Would Allow the Trading of Sports Teams Like Stock. On October 8, Zack Ward of the “New Sports Economy Institute”filed Initiative 15-0082, which would give any California resident 18 years or older the right to “trade sports teams like stock in a socially beneficial and carefully regulated marketplace.” In the findings and declarations section of the initiative, Mr. Ward discusses sports betting and daily fantasy sports, and declares them to be “forms of gambling that are positively destructive to society at large.” The findings and declarations describe the benefits of a regulated sports market as an alternative to current sports betting and daily fantasy sports, but do not describe exactly how the trading would work. The initiative states that “a well-functioning sports market will boost economic activity, create jobs and increase tax receipts.”

Mr. Ward, an actor who got his start portraying bully Scut Farkus in the 1983 film “A Christmas Story,” said in a news release: “With enough votes, socially responsible and carefully regulated sports trading markets will become a constitutional civil right for citizens. Then, our legislature will write the laws and fill in the details to make sure everything comes together properly.”

October 22, 2015

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