California voters also have the task of studying and voting on 12 statewide propositions.
Understanding propositions can prove to tax the brain and be confusing to the average voter. This is an attempt to help explain what they are all about.
Prop. 1 – Issues $4 billion in bonds for housing programs and veterans’ home loans. Passage would give the state permission to borrow $4 billion to fund affordable housing construction and rental and home loan subsidies.
The money would be used to build and renovate rentals ($1.8 billion), to offer home loan assistance to vets ($1 billion), to construct additional housing in dense urban areas and near public transit ($450 million), to offer down payment assistance and other aid to low- and moderate-income homebuyers ($450 million) and to provide loans and grants for agricultural workforce housing development ($300 million).
California faces an unprecedented housing crisis and we are told that more than 55,000 people will meet their housing costs while desperately needed affordable housing is built. That may sound good but it comes at a hefty price. According to the Legislative Analyst’s Office, the state’s nonpartisan budgetary scorekeeper, paying back the bond with interest will run the state government an extra $170 million annually for the next 35 years on average. This is roughly equivalent to about a tenth of one percent of the state’s current general fund—or what the state spent on its juvenile justice program this year. The total cost of the bond is expected to be $5.9 billion.
Democrats generally support Prop. 1 while Republicans oppose because of the heft borrowing costs.
Prop. 2 – Allows the state to use revenue from the 2004 millionaire’s tax for $2 billion in bonds for homelessness prevention housing. Specifically it would fund supportive housing (affordable housing with on-site social and medical services) for those suffering with mental illness. That debt would be repaid with money previously set aside for county-run mental health services.
If Prop. 2 passes, the state will divert roughly $120 million each year from designated mental health treatment funds to pay off the bond. In other words, the state would be spending this money no matter what. Consider that for over a year a pending lawsuit has been holding up the state’s plan to fund supportive housing with county mental health dollars. Counties are now sitting on millions of dollars reserved for the homeless and are unsure how to spend it. Rather than wait out the court battle, state lawmakers are taking the question to voters.
Prop. 3 – Gives the state approval to issue $8.9 billion in bonds for water-related infrastructure and environmental projects. Specifically it would spend $2.5 billion on watershed protection, $2.1 billion on water supply improvements including wastewater treatment, $1.4 billion for habitat restoration, $1.1 billion on groundwater management, $500 million on flood protection projects, and $1.2 billion to upgrade and repair water infrastructure, like canals and dams.
Again, anytime the state borrows money and pays it back with interest, the cost is always higher. The Legislative Analyst’s Office says paying back the bond with interest will run the state government an extra $435 million annually for the next 40 years on average. This is roughly equivalent to about a third of one percent of the state’s current general fund. The total cost of the bond is expected to be $17.3 billion.
Keep in mind on June 5 California passed a $4.1 million bond to fund water infrastructure and new parks. Bonds may provide long-term, recession-proof, dedicated streams of cash to upgrade and update its aging infrastructure. But not only have taxpayers foot the bill in the past for big water bonds, they did it again in early June! And the state still hasn’t spent all of the money it borrowed in 2014 with Prop. 1. There are additional concerns about how the money will be spent. Some say state taxpayers should not have to pay for regional projects, like canal repairs, that are usually paid for by local water agencies.
Prop. 4 – Children’s Hospital Bond. It would allow the state to borrow $1.5 billion to fund renovations, expansions, and upgrades at hospitals that treat children. Most of the funding is reserved for the state’s eight private non-profit children’s hospitals ($1.08 billion) and the five hospitals run through one of the University of California campuses ($270 million).
Again, borrowing means higher costs. Thus borrowing $1.5 billion actually costs $2.9 billion. The Legislative Analyst’s Office says paying back the bond with interest will run the state government an extra $80 million annually for the next 35 years on average.
The California Children’s Hospital Association regularly turns to the taxpayer for financial help. In 2004, voters backed a $750 million bond to fund similar infrastructure projects. Four years later, they approved another $980 million in borrowing. This year’s proposal looks similar, just bigger.
Proponents say pass it because kids deserve the best possible care. They also note that with constantly changing medical technology hospitals can’t pay to keep up because children’s hospitals are dependent on the low reimbursement rates from Medi-Cal, the state’s public insurance program for low-income residents. These bond funds would allow the state’s health care providers to make these necessary investments.
Opponents, such as the Republican Party, ask why should taxpayers throw more money at hospitals, many of which are privately-owned and operated? And if they insist on doing so, why not use existing funds rather than borrow?
Prop. 5 – Portable Real Estate Tax Break. This one requires a brief explanation. Currently the state allows homebuyers and owners who are 55 or older, or severely disabled to move into equal or smaller housing in the same county while not paying the higher tax bill that comes with it. Remember that the Jarvis-Gann Tax Initiative (Prop. 13) bases property taxes on the purchase price and not current market value. That means older homeowners are paying less in taxes than say someone who buys the same house today.
Prop. 5 would allow the same older or disabled homeowners to take a portion of their lowered property tax base with them if they sell their home and move anywhere in the state. Here’s how it works: someone who buys a more expensive house would no longer be required to pay property taxes based on the full market price of the new home, as they would be now in many cases. Instead, the new taxable amount would only increase by the difference in market price between the new and old home.
Likewise, someone who moves to a less expensive house would actually see their property fall, dodging a higher property tax bill based on the full market rate of the new property. Instead, their assessed value would decline by the percentage difference in price between the new and old property.
The Legislative Analyst’s Office says local governments and school districts would lose $1 billion annually in foregone tax revenue. The state government would be required to backfill most of these costs, increasing state spending by a roughly equivalent amount. Some school districts in areas with high property taxes (roughly 5 percent across the state) would not be made entirely whole.
Prop. 13 has kept property tax bills low for longtime homeowners despite skyrocketing real estate prices, but it also discourages people from moving, since property tax assessments are usually reset when you buy a new home. The California Association of Realtors introduced the ballot measure, arguing that it will free up necessary inventory for young families by making it easier for empty nesters to downsize.
Those in favor (realtors, the Howard Jarvis Taxpayers Association and California Republican Party) say many homeowners are penalized for moving and that empty-nesters across the state are living in houses and large apartments that are bigger than their needs. They say there are plenty of first-time homebuyers and young families who could use all that extra space. Encouraging the first group to sell to the second is a win-win.
Opponents (like Democrats and the California Teachers Association) say of all the ways to address the state’s housing crisis, this is one of the least direct and most costly. Prop. 5 won’t increase the housing supply and won’t subsidize rents; it merely switches homes from one group to another. Meanwhile, it costs the state an extra $1 billion while handing tax breaks to senior owners.
Prop. 6 – Gas Tax Repeal. This proposition would erase the $52 billion fuel tax and vehicle license fee hike enacted by Gov. Brown and the Legislature in 2017. It also requires public vote on future increases.
Last year, California’s Democratic-led legislature approved Senate Bill 1, raising the state excise tax on gasoline by 12 cents per gallon, or a 40 percent increase. SB 1 is designed to provide about $52.4 billion over the next decade, with the funds going to repair and maintain highways, local streets and bridges as well as for investments in mass transit. Part of the funding also came from boosting registration fees on vehicles by $25 to $175, with the increase depending on the value of the car.
While most agree the state has neglected to fund and maintain roads, bridges and other transportation infrastructure, opponents say Californians already pay some of the highest taxes in the nation, including one of the highest state gas taxes. Republicans like GOP gubernatorial candidate John Cox feel lawmakers should be forced to trim spending and improve efficiency before asking drivers for more money.
Proponents like Lt. Gov. Gavin Newsom point out that California hasn’t raised its gas tax in decades and the state’s transportation infrastructure is following apart. They say the notion that state and local governments could still make these necessary investments without this funding source just by “trimming the fat” is fantasy.
Prop. 7 – Daylight Savings Time Forever. Passage would repeal the 1949 law that created Daylight Savings Time. If passed, the Legislature would be able to pass a law – with a two-thirds majority – finally nixing the biannual tradition of moving clocks backward and forward every spring and fall. Congress would also have to approve.
Some theorize that messing with our clock could affect energy consumption and worker productivity, but it’s not clear how or by how much. Resetting our clocks every year is antiquated, annoying, and bad for our health, say supporters of Prop. 7. Eliminating this tired tradition would improve the quality of our sleep and allow us to enjoy some extra afternoon daylight between November and March.
Those who want to keep status quo say Daylight Savings Time may be annoying, but being on separate clock from the rest of the country half of the time is liable to be even more inconvenient. Plus, more dark mornings in winter would likely lead to more traffic accidents in the hours when children are going to school and adults are on their way to work.
Prop. 8 – Dialysis Clinic Profit Pruning. This would require dialysis clinics to payback any profits over 15 percent of qualifying business costs to insurance companies. Most of California’s dialysis clinics, which serve patients suffering from kidney failure, are owned by two for-profit companies: DaVita Kidney Care and Fresenius Medical Care. The Service Employees International Union-United Healthcare Workers have had their sights trained on the industry for years. They’ve sponsored legislation and floated ballot measures to mandate higher staffing ratios and regulate insurance payments.
Those who endorse Prop. 8 (Democrats and unions) say the two companies are enormously profitable. In 2017, for example, DaVita netted $1 billion. And yet over the last five years, the state Department of Public Health has received 18 complaints per month about health and safety conditions at clinics. Proponents say the state needs to ensure that companies aren’t putting profits over the quality of care and force them to invest more in equipment and training.
Opponents, (Republican Party and California Medical Association) however, say Prop. 8 is just a pressure tactic from a union wanting to organize dialysis clinic workers – and that it’s a poorly thought out initiative. In regulating profit, the measure doesn’t count basic administrative costs, like payroll management and legal expenses, as qualifying costs. This has very little to do with improving patient care. The industry may not be perfect, opponents say, but Prop. 8 could result in clinics closing, putting the lives of the thousands of Californians who need dialysis in jeopardy.
Prop. 10 – Rent Control. This would allow cities to regulate rent.
In 1995 the state Legislature placed a statewide moratorium on rent control laws. It also banned cities from applying existing rent regulation ordinances to new units. Now that the state is facing an affordable housing crisis, some housing advocates want to give cities a tool to put a legal lid on rents.
Proponents (including the California Democratic Party and California Teachers Association) say it’s needed because rents are high and are pricing people out of the state’s big cities. This is a crisis that needs an immediate solution, even as lawmakers work on a longer term fix.
Opponents say artificially tampering with rents by keeping them lower than markets dictate will have the opposite affect – with fewer newer units being built or existing ones maintained or improved because profit margins are gutted. Those opponents include the California Republican Party, California Chamber of Commerce, State Building and Construction Trades Council of California and even Democrat Lt. Gov. Gavin Newsom.
Prop. 11 – Paramedic Break Time. This continues to allow private ambulance services to require their emergency medical service employees to remain on call during meal and rest breaks. Also guarantees technicians additional training and some paid medical health services.
Two years ago, the state Supreme Court ruled that security guards cannot be required to keep their radios on and remain on call while enjoying their meal or break time. A number of private ambulance firms are now facing class action lawsuits in California courts over similar break time violations, including American Medical Response, the company backing the initiative. Those cases are still pending, but the companies involved want a specific exemption written into law.
Proponents, including the California Republican Party, say just like police and firefighters, paramedics need to be on-call to respond to emergencies. This proposition would ensure that workers are compensated for missed or interrupted breaks.
Opponents (including the California Democratic Party and California Teachers Association), say Prop. 11 is being pushed by an industry looking for a special exemption from state labor law.
Prop. 12 – Bigger Cages for Farm Animals. This would ban the sale of meat from animals confined in spaces below specific sizes.
It would place specific size requirements on the coops and cages used to contain breeding pigs, veal calves, and egg-laying hens. It would also require all egg-laying hens be raised in specified “cage-free” conditions by 2022. California businesses would be prohibited from selling any food products that come from animals not raised in compliance with this law, even if they come from out of state.
Why is this on the ballot? In 2008, voters passed Proposition 2, an initiative sponsored by the Humane Society, which requires that farm animals be allowed to stand up and turn around in their cages. After its passage, commercial egg growers insisted that it didn’t require them to go cage-free, while animal welfare advocates argued otherwise. This measure, again backed by the Humane Society, makes these requirements more specific by including square-footage requirements and a specific cage-free clause to be phased in.
Proponents (including the California Democratic Party and United Farm Workers) say Prop. 2 demonstrated that welfare of animals can be improved on farms without jeopardizing the food supply. They say specific cage-size measurements in the law would not allow the agricultural industry to wiggle out of these rules.
Opponents (California Pork Producers Association, Association of California Egg Farmers, Humane Farming Association, People for the Ethical Treatment of Animals, Friends of Animals and the California Republican Party) say farmers across the country will have to completely overhaul operations, possibly driving some out of business while raising the price of eggs, pork, and veal.
Other animal welfare groups like PETA argue Prop. 12 doesn’t go far enough. Specifically, the specific cage size requirements are actually smaller than what’s required under Prop. 2. Plus, this law wouldn’t require egg-laying hens to be raised in cage-free conditions until 2022, something Prop. 2 should have banned by 2015. They want a complete ban on cages and some would argue against eating animals at all.