2024 Marchands Against Political Apathy

Welcome to Marchands Against Political Apathy (MAPA) and Our Analysis of California’s Statewide November 2024 Ballot Measures!

A total of 10 propositions this time; the complexity of some of them drove us to drink. Of these 10 measures, three measures are constitutional amendments placed on the ballot by the Legislature (one of which is related to local government general obligation bonds), two are state general obligation bonds placed on the ballot by the Legislature, and the remaining five are citizen’s initiatives – the same number of citizen’s initiatives as 2022 and three less than 2020 (when there was a total of 12 propositions, eight of which were citizen’s initiatives). A new trend for MAPA this year is the importance of both state and local bonds to fund infrastructure improvements, including housing. We hear complaints from our friends and colleagues about the need for government to “do something” about affordable housing, homelessness, aging school facilities, and issues related to climate change. So, are bonds the answer? You get to have a say in this election. We go into some depth on bonds in this MAPA version as a result; voters will continue to make tough decisions about both local and state bonds for a long time to come, so we think it’s worth the investment of your time to understand the bond process. And we hope to learn from you along the way because as we said – it’s complicated! We all need to work together to stay informed and understand the proposals before us as voters.

We start with a “cheat sheet,” which provides only ballot numbers and recommendations. To help defeat apathy, we encourage you to read the entire MAPA guide that follows the cheat sheet. Below each proposition in the guide, we provide a summary of the proposition (copied from the official ballot pamphlet) for easy reference, followed by our “analysis.” Our analysis is informed by reading about the measures, reviewing the proposed language, a little bit of “insider” knowledge from our work in government, and talking with friends and colleagues. As always, we do not claim expertise on many (or even most) of the measures on this year’s ballot. You might know more about a subject than we do! This is an effort to encourage voting, rather than getting people to agree with us. Good luck, and don’t forget to vote!

CHEAT SHEET 

Proposition 2 (Bonds for schools/community colleges): YES

Proposition 3 (Constitutional right to marriage): YES

Proposition 4 (Bonds for drinking water, wildfire prevention, climate mitigation): NO

Proposition 5 (Lower local bond vote to 55% for afford. housing/infrastructure): YES

Proposition 6 (Eliminate involuntary servitude for incarcerated persons): YES

Proposition 32 (Minimum wage increase): NO

Proposition 33 (Rent control): NO

Proposition 34 (Restrict spending of prescription drug revenue for specific entity): NO

Proposition 35 (Permanent funding for some Medi-Cal providers: NO

Proposition 36 (Increase penalties for certain drug and theft crimes): NO

ANALYSIS OF PROPOSITIONS

PROPOSITION 2 – Authorizes Bonds for Public School and Community College Facilities

Marchand recommendation: YES

Who put it on the ballot:  The Legislature

Summary:

• Authorizes $10 billion in state general obligation bonds for repair, upgrade, and construction of facilities at K–12 public schools (including charter schools) and community colleges.

• Provides funding for new facilities to improve school health and safety conditions at existing facilities, and for classroom upgrades (e.g., science, engineering, transitional kindergarten, and vocational classrooms)

• Expands eligibility for financial hardship grants for small and disadvantaged school districts.

• Provides higher percentage of state matching funds to schools demonstrating greatest need.

• Requires public hearings and performance audits.

• Appropriates money from General Fund to repay bond.

Our Analysis:

In November of 2020, voters rejected Proposition 13, a $15 billion bond to improve school facilities and the largest proposed education bond in state history.  The $10 billion Proposition 2 on the 2024 ballot is therefore the second attempt to convince voters to pay for replacement and improvements to public schools in the last five years. (The state has largely spent the funds from the last $9 billion school facilities bond, Proposition 51 in 2016.) Analyses of the 2020 results, such as this article in Cal Matters, cited voter fatigue with both state and local school bonds and the COVID-19 pandemic as the reason for the defeat. In addition to shaving $5 billion off the total amount, Proposition 2 also makes additional changes to increase voter likelihood to support the bond, including a more specific focus on funding facilities in communities without significant financial resources or with the oldest schools. And wonder of all wonders, both the California Republican Party and the California Democratic Party support Proposition 2. It’s nice to see the parties agree on something for once.

As you may recall from previous MAPA analyses, we have some important questions we ask before recommending a vote on a bond. These questions are as follows:

• Did the bond go through the legislative process?

• Does the bond focus on capital projects (e.g. parks, school facilities, water system improvements) which benefit multiple generations?  

• Will the additional bonded indebtedness make the State’s level of indebtedness unaffordable, meaning will it place too much pressure on the State to use General Funds the State could use for other purposes to pay down debt?

• Will the additional bonded indebtedness significantly increase the State’s level of bonded indebtedness compared to other states?

• Are there other funds available for the purpose that would be cheaper for the State to use for this purpose, in other words, is the additional bonded indebtedness “optimal”?

Before we answer these questions and help you understand our yes recommendation, we wanted to highlight the reasons to vote no. This is a large bond at $10 billion. According to the November 5, 2024 Official Voter Information Guide (p.64), the state is currently repaying $80 billion in bonds and the Legislature and voters have approved another $35 billion in bonds the state has not yet sold. The state is currently paying about $6 billion per year to repay these bonds, which is about 3 percent of General Fund revenue (lower than the historical average of 4 percent). Proposition 2 would add about $500 million in bond debt each year for 35 years and increase the State’s bonded indebtedness by approximately 9 percent. If this large of an increase in bonded indebtedness gives you pause, vote no. As you learn more about the state’s bonded indebtedness as part of this analysis, you may find other reasons to vote no as well, such as you do not believe the state’s level of bonded indebtedness is affordable or it is too high relative to other states. So read on.

On the flip side, there is a real need to invest in public school facilities and not all communities can afford the property tax assessments to pay for the local school facility bonds. According to the Public Policy Institute of California, 38 percent of students attend schools that do not meet minimum facility standards and 108 schools had to close between 2015 and 2019 because of broken water pipes, mold, pest infestations, heating system failures, or other facility issues. In addition, a 2017 report by the California Policy Lab demonstrated that newly constructed schools significantly improved student achievement in the Los Angeles Unified School District as measured by standardized test scores, attendance rates, and student effort. Proposition 2 will also help address the issue of removing any remaining lead in school facilities, which is documented to cause significant health issues. (MAPA cannot believe we are still dealing with lead in schools. Enough already.) Given these important considerations and because Proposition 2 “passed” the MAPA bond test described above, we recommend a yes vote. The following provides more detail about Proposition 2 for each element of the MAPA bond test.

The Legislature and the voters provided input. Not only did the Legislature review and approve Proposition 2, but the Legislature also improved the bond language because voters rejected the initial measure in 2020. This is a good example of the importance of voting “no” even when you generally agree with the principle of a bond or other proposition since voter rejection may result in changes to the proposed policy which improves outcomes. The revised bond implements a sliding scale for grant amounts to ensure lower-wealth districts receive a higher proportion of state funding, establishes a program for replacing outdated buildings at least 75 years old, assists small and priority school districts by leveraging a federal grant to provide in-person and ongoing regional support, sets aside 10 percent of funds specifically for small districts, and reduces the local match required for low-wealth districts, among other changes. For more detail about the state process to fund school facility replacement and improvements, see the Senate Governance and Finance Committee analysis.

The bond focuses on capital projects. State general obligation bonds should focus on capital projects that benefit multiple generations, therefore justifying spreading the additional expense across as much as 35 years. MAPA read Proposition 2 and is pleased with the exclusive focus on improving school facilities and constructing new school facilities that benefit multiple generations.

The level of State bonded indebtedness is affordable. According to analysis of Proposition 2 by the Senate Committee on Governance and Finance, the State’s current level of bonded indebtedness is “affordable,” but this is obviously a subjective decision based on available information. When MAPA wrote about bonded indebtedness in 2020, California had about slightly more state debt that it was paying off than now ($83 billion versus $80 billion). In addition, tax receipts for the 2024-25 fiscal year have improved significantly over projections, making us feel more comfortable deeming this bond “affordable” ourselves. You may reach a different conclusion. For a summary of all bonds before the voters over the last 10 years, see the excerpt below from Ballotpedia. Voters seems inclined to support smaller bonds for infrastructure priorities, which may influence your decision about this particular bond.

The level of State bonded indebtedness is not increasing significantly in comparison to other states. California’s ratio of debt to personal income as of 2022 is the third highest of the 10 most populous states at 3.2%, behind Illinois and New York, which is the same as when MAPA last wrote about bonded indebtedness in 2020. California’s debt per capita has increased slightly, from $2,323 per capita in 2020 to $2,458 in 2022. (Note that MAPA is not sure whether these numbers are in the same base year dollars and therefore comparable.) Texas currently has the lowest ratio, followed by North Carolina, Michigan, and Florida; the median for the 10 most populous states is 2.25% or $1,352 per capita. Remember that the state must repay the bond with income to the General Fund, which varies widely depending on the personal income of some of the wealthiest individuals in California.

Other funds are not available and/or the bond investment approaches an optimal amount. Determining the “optimal” level of state bonded indebtedness, or whether the government is investing in the quantity and quality of public capital desired by residents and financing the appropriate share with debt, is difficult. In this case, MAPA believes the state has made its case that local school districts do not have the funds to improve these facilities and need state assistance, plus it is appropriate to spread the cost over multiple generations.

PROPOSITION 3: Constitutional Right to Marriage. Legislative Constitutional Amendment

Marchand Recommendation: YES

Who put it on the ballot:  The Legislature

Summary:

• Amends California Constitution to recognize fundamental right to marry, regardless of sex or race.

• Removes language in California Constitution stating that marriage is only between a man and a woman. 

Our Analysis:

This initiative removes language from the California Constitution added by Proposition 8 in 2008, which limited marriage in California to between a man and a woman. The 9th Circuit Court of Appeals found Proposition 8 unconstitutional in 2012 and the U.S. Supreme Court dismissed an effort to appeal the 9th Circuit Ruling, although on the basis of standing, without reviewing the merits. Then, under Obergefell v. Hodges in 2015, the U.S. Supreme Court in a 5-4 ruling found that laws preventing same sex couples from marrying violated the due process and equal protection clauses of the 14th Amendment. Therefore, Proposition 3 will not have any immediate effect. Rather, in the event our U.S. Supreme Court overturns its prior decision, this would protect the right to same sex marriage in California by amending the constitution to delete the limitation to only those between a man and a woman, and by specifying that the right to marry is a fundamental right.

We do not really believe further analysis is required here but given opponent arguments from the California Family Council and the American Council for Evangelicals, who argue that this is somehow extreme and will lead to marriage between children or between more than two people, we would simply remind folks that the only thing being repealed by this measure is Proposition 8 from 2008. Before 2008, it required consent of parents and an order from the court for juveniles to marry, and this initiative will not change this requirement. It really is just about protecting same sex marriage in the event of a change of opinion from the U.S. Supreme Court. We recommend a yes vote.

PROPOSITION 4: Authorizes Bonds for Safe Drinking Water, Wildfire Prevention, and Protecting Communities and Natural Lands From Climate Risks. Legislative statute.

Marchand Recommendation:  NO

Who put it on the ballot: The Legislature

Summary:

• Authorizes $10 billion in state general obligation bonds for various projects to reduce climate risks and impacts: $3.8 billion for safe drinking water and water resilience; $1.95 billion for wildfire prevention and extreme heat mitigation; $1.9 billion for protection of natural lands, parks, and wildlife; $1.2 billion for protection of coastal lands, bays, and oceans; $850 million for clean energy; and $300 million for agriculture.

• Prioritizes projects benefitting disadvantaged communities.

• Requires annual audits.

• Appropriates money from General Fund to repay bonds.

Our Analysis:

This is a tough one, since Petrea’s firm, Consero Solutions, helps local governments and non-profit organizations develop projects and apply for funds which passage of this bond will help support. But when applying the MAPA bond test (see the analysis of Proposition 2), Proposition 4 falls short because of its size of $10 billion, inadequate review by the Legislature (although the Legislature did approve it), the availability of other sources of funding to pay for climate change priorities, and the inclusion of programs which are not capital projects and do not meet the MAPA test of justifying the expenditure of funds to benefit multiple generations. We also are uncomfortable recommending the addition of TWO large $10 billion bonds to the state’s bonded indebtedness (MAPA supports the $10 billion education bond), given the size of the State’s debt and because the State still has not sold $23 billion in bonds already approved by the voters. While we do not know Governor Newsom’s reasons for signing both Proposition 2 and Proposition 4 to place them on the ballot but then not publicly campaigning for them, we must believe he has some concerns about the state’s level of bonded indebtedness as well given the amount relative to other populous states. MAPA believes the Legislature should work to reduce the size of this bond and ensure it focuses exclusively on capital projects that benefit multiple generations like the $4 billion parks and water bond (Proposition 68) passed in 2018. So we are voting no.

On the flip side, Petrea understands firsthand from her work with local governments the urgency of addressing climate change and improving local water system reliability. She has seen cities and counties work to develop climate action plans to identify priorities to reduce greenhouse gas emissions, including installation of electric vehicle charging stations, placing solar panels on public buildings, upgrading libraries to serve as climate resilience centers during climate-related crises, improving surface water systems to reduce groundwater use, and increasing drought resiliency through development of water recycling systems and aquifer storage and recovery wells, among many other actions. She also is working on helping a disadvantaged community in Yolo County replace a 60-year-old, failing drinking water system with a state grant and working to expand a flood bypass in San Joaquin County to protect cities from increased flooding resulting from climate change. All these actions require significant investments in capital projects which benefit multiple generations and which many cities and counties cannot afford without state assistance (see analysis of Proposition 5, which lowers the voter threshold for local general obligation bonds) and which Proposition 4 may help move forward. If you feel like California cannot wait to further these investments, vote yes.

The following provides more information about each element of the MAPA bond test as it pertains to Proposition 4.

The Legislature and the voters did not provide sufficient input. As a result of stalled negotiations over the bond, the Legislature had to waive multiple rules to ensure the Governor signed Proposition 4 prior to the deadline for placing a bond on the November 2024 ballot. As a result, the policy committees which typically analyze and recommend changes to such bonds did not have an opportunity to review and analyze the final draft. (MAPA likes to read these analyses as part of our research.) MAPA believes additional review by the appropriate policy committees is appropriate and the public deserved an opportunity to have additional input. Perhaps this input would have improved the clarity of the bond and/or focus the bond on the most important priorities to reduce the size.

The bond does not focus exclusively on capital projects. While the bond contains some significant funding for important capital projects, such as improving drinking water systems, groundwater recharge, flood control, parks, and land conservation, it also includes programs not appropriate for a bond because they are temporary programs or expenditures which will expire prior to repayment of the bond in 35 years. MAPA thinks the editorial board of the Santa Cruz Sentinel captured this tension with their opposition to the bond titled “Vote No on Fiscally Irresponsible Proposition 4.” (The Santa Cruz Sentinel received a rating of “least biased” from the Media Bias/Fact Check web site.) State general obligation bonds should focus on capital projects that benefit multiple generations, therefore justifying spreading the additional expense across as much as 35 years. Proposition 4 includes 14 pages of programs in the 2024 Voter’s Guide, longer than any other measure on the ballot. According to the Sentinel, “this measure reads like a shopping list more than a sound policy proposal. Prop. 4 would dole out money to nearly 100 different programs. There’s no sense of priorities or analysis of what would deliver the biggest bang for the buck.” Although it pains Petrea to admit it, we agree.

The level of State bonded indebtedness is affordable. As described in the analysis of the state’s bonded indebtedness for Proposition 2, MAPA believes the State’s bonded indebtedness is affordable. Nevertheless, MAPA is not convinced adding two $10 billion bonds to the State’s bonded indebtedness is fiscally responsible. In addition, the Senate Governance and Finance Committee analysis of SB 867 (which resulted in Proposition 4) states that according to the State Treasurer, the state has issued an average of $7.9 billion of general obligation bonds annually and expects similar issuance amounts in future years. The analysis further states market appetite and debt service payments limit the amount of general obligation bonds the state can sell. As a result, new general obligation bond-funded projects may have to wait to receive the necessary cash. This seems like another good reason to wait on this bond.

The level of State bonded indebtedness is not increasing significantly in comparison to other states. As described in the analysis of Proposition 2, California ratio of debt to personal income as of 2022 relative to other states has not changed much since 2020. Still, MAPA is not comfortable with the amount this may increase if the state adds two $10 billion bonds to the State’s bonded indebtedness.

Other funds are not available and/or the bond investment approaches an optimal amount. As described under the analysis of Proposition 2, determining the “optimal” level of state bonded indebtedness, or whether the government is investing in the quantity and quality of public capital desired by residents and financing the appropriate share with debt, is difficult. In this case, MAPA believes the state has not made the case that bond funds are the best way to fund this long list of climate action priorities when the state has Greenhouse Gas Reduction Fund money from the state’s cap-and-trade program and recently invested General Fund at historic levels in climate action priorities during the recent years of budget surplus. Given these concerns, as well as the belief that adding two $10 billion bonds to the state’s bonded indebtedness is too much, MAPA chooses the school facilities bond for the reasons described in the Proposition 2 analysis.

Proposition 5: Allows Local Bonds for Affordable Housing and Public Infrastructure with 55% Voter Approval. Legislative Constitutional Amendment.

Marchand Recommendation: YES

Who put it on the ballot:  The Legislature

Summary:

• Allows local bonds for affordable housing for low- and middle-income Californians, or for public infrastructure including roads, water, and fire protection to be approved by 55% of voters, rather than current two-thirds approval requirement.

• Bonds must include specified accountability requirements, including citizens oversight committee and annual independent financial and performance audits.

• Allows local governments to assess property taxes above 1% to repay affordable housing and infrastructure bonds if approved by 55% of voters instead of current two-thirds approval requirement.

   

Our Analysis:

This constitutional amendment, placed on the ballot as the result of years of efforts by Assemblymember Cecilia Aguiar-Curry (who represents Yolo County, home to MAPA, in the California State Assembly and now serves as the Majority Leader of the California State Assembly), will make it easier for local governments to pass general obligation bonds for public infrastructure and affordable housing (as well as the associated property tax assessments) by reducing the vote threshold from a 2/3 vote to a 55 percent vote.

A little bit about local government general obligation bonds is appropriate here as background. According to this helpful eight-page guide issued by the California Debt and Investment Advisory Commission (our new favorite commission),  local governments (e.g. cities, counties, school districts, and special districts) must fund general obligation bonds with an ad valorem property tax in the amount necessary to repay debt service. (The State of California, on the other hand, may issue general obligation bonds paid for by the “full faith and credit” of the State’s General Fund, rather than any specific tax revenue – see discussion of Proposition 2 and Proposition 4.) According to the California Debt and Advisory Commission, “With very few exceptions, local government agencies are not authorized to issue full faith and credit bonds. The general obligation bonds of such agencies are typically payable only from ad valorem property taxes, which are required to be levied in an amount sufficient to pay interest and principal on the bonds coming due in each year.” In 2020, voters passed Proposition 39 to lower the voter threshold to 55 percent from 2/3 for school districts to pass bonds for specific purposes with significant oversight. As a result, the amount of school general obligation bond issuance increased significantly; voters can expect the same type of increase if Proposition 5 passes. According to our favorite commission, local government general obligation bond issuance averaged $2.8 billion per year between 1985 and 2005. Between 2006 and 2015 (remember Proposition 39 passed in 2000), local government general obligation bond issuance increased to $8.5 billion annually.

According to the Senate Committee on Elections and Constitutional Amendments’ of ACA 10, the bill that resulted in Proposition 5,  “one of the most common reasons local agencies incur debt is to raise sufficient capital for a project the local agency does not have sufficient cash on hand to immediately finance, such as a public infrastructure project, and promise to pay off the principal and interest on that debt over time. General obligation bonds, in the local government context, refer to bonds payable from ad valorem property tax revenue, which typically require two-thirds voter approval.” Proposition 5 will reduce the voting threshold for “public infrastructure” and “affordable housing,” as defined in Proposition 5, which includes downpayment assistance programs, first-time homebuyer programs, permanently supportive housing for people at risk of homelessness, including those living with mental illness (Petrea is a big fan of this language after her family’s work to save two groups homes for adults living with mental illness in the city of Davis), and facilities or infrastructure needed for the delivery of public services, such as emergency medical facilities, libraries, flood protection, public transit, public health centers, parks, fire protection, police stations, and open space.

We will start with the reasons to vote no on Proposition 5. According to the Senate Local Government Committee analysis of ACA 10 in June 2024, “Relying on bonds to finance these programs and equipment may end up costing taxpayers more compared to financing them with special taxes that do not require interest payments. Lowering the vote threshold just for bonds, and not special taxes, may encourage local governments to finance certain programs and equipment in a more costly manner just to avoid the higher vote threshold of a special tax. Additionally, relying only on bonds means local agencies will have a greater incentive to build new facilities, but still need a 2/3 vote to raise special tax revenue to hire people to staff those new facilities.” If you are concerned the new bond authority will incentivize bonds where local governments should instead propose taxes that require a 2/3 vote, vote no. More importantly, maybe you are worried this new authority will result in additional property tax assessments you cannot afford and/or that will make home ownership more difficult to achieve. We get it. We looked at our property tax bill recently and noted we have nine separate property tax assessments levied by local governments, increasing our property tax bill by 29%. We are happy to pay this amount to support our local governments, although we are frustrated with our local governments’ lack of engagement with the community about how to spend the funds so are personally engaging to increase engagement and oversight. But many individuals do not have the income flexibility to support these types of local investments and/or feel local governments need to improve management of the funds. So, if you personally feel this initiative may increase the number of assessments you have to pay and you cannot afford that risk, vote no.

MAPA supports Proposition 5 because it is written carefully to focus only on capital projects to provide public infrastructure and affordable housing, both pressing needs in California and justifiable expenses for local government bonds because such projects benefit multiple generations, as well as contains significant oversight provisions. (Petrea especially is a huge fan of government oversight, having had to help fix a special district which misused funds because of the lack of oversight.) The rigorous oversight requirements include audits, the appointment of a citizen’s oversight committee, and training for citizens’ oversight committee members. Voters may not have the incentive to vote for projects that benefit multiple generations for the reasons we described above, but we believe local governments need help securing funding to construct such projects when bonds are an appropriate tool. We caution, however, that local governments should only use this new tool if they have sufficient funds to operate the new facilities; Proposition 5 does not allow bond funds to pay for operations. Local governments will still need to convince 55 percent of voters to pass a local bond for construction, which hopefully will include a public conversation about whether sufficient operating funds are available to sustain these projects. So, if you or a family member are hoping to buy your first house, you believe more affordable housing will help address homelessness, or you believe more public infrastructure is needed to address the impacts of climate change or other issues, vote yes. But also volunteer to serve on your local citizen’s oversight commission.

Proposition 6: Eliminates Constitutional Provision Allowing Involuntary Servitude for Incarcerated Persons. Legislative Constitutional Amendment.

Marchand Recommendation: YES

Who put it on the ballot:  The Legislature

Summary:

• Amends the California Constitution to remove the current constitutional provision that allows jails and prisons to impose involuntary servitude to punish crime (i.e., forcing incarcerated persons to work).

• Prohibits the California Department of Corrections and Rehabilitation from punishing incarcerated persons for refusing a work assignment. Allows incarcerated persons to voluntarily accept work assignments in exchange for credit to reduce their sentences. 

Our Analysis: 

The California Constitution contains a provision prohibiting slavery and involuntary servitude "except to punish crime." This constitutional amendment removes this exception, and additionally adds the following language:

(b) The Department of Corrections and Rehabilitation shall not discipline any incarcerated person for refusing a work assignment.

(c) Nothing in this section shall prohibit the Department of Corrections and Rehabilitation from awarding credits to an incarcerated person who voluntarily accepts a work assignment.

(d) The amendments made to this section by the measure adding this subdivision shall become operative on January 1, 2025.

The 13th amendment to the U.S. Constitution prohibits slavery and involuntary servitude “except as a punishment for crime whereof the party shall have been duly convicted,” meaning this constitutional amendment will create a difference between State and federal law. According to the Senate Committee on Elections and Constitutional Amendments analysis of ACA 8, the bill that resulted in Proposition 6, “The California Supreme Court has interpreted the prohibition on slavery and involuntary servitude contained in Article I, Section 6 of the California Constitution to be coextensive with the protection afforded by the Thirteenth Amendment. (Moss v. Superior Court (1998) 17 Cal.4th 396, 418.).” The Legislature placed this constitutional amendment on the ballot at the recommendation of the Reparations Task Force, established by legislation in 2020 to study “the institution of slavery and its lingering negative effects on living African Americans, including descendants of persons enslaved in the United States and on society. Additionally, the Task Force will recommend appropriate remedies of compensation, rehabilitation, and restitution for African Americans, with a special consideration for descendants of persons enslaved in the United States.”

The California Legislative Black Caucus introduced 14 bills in 2024 based on the recommendations of the Task Force, 10 of which passed the Legislature – including Proposition 6. The Legislature considered a similar measure in 2022, but it did not pass because the California Department of Finance estimated it would cost the state $1.5 billion annually to pay minimum wage to prisoners. Proposition 5 contains a voluntary work provision to address this issue and also does not guarantee prisoners will receive minimum wage. According to CalMatters, the state’s prison system employs nearly 40,000 of the 90,000 inmates. These workers complete a variety of tasks such as construction, yard work, cooking, cleaning and firefighting and earn less than 74 cents an hour, although inmate firefighters can earn as much as $10 a day. Many of the implementation details are yet to be worked out and lawsuits are expected.

The East Bay Times (received a “left-center” bias rating from Media Bias/Fact Check) states that “potential litigation could ensue as inmates try to push the boundaries of what constitutes a work assignment.”  If you think more work is needed to improve this constitutional amendment, vote no. MAPA supports Proposition 6 because it is the result of the work of a multi-year task force, it was reviewed and approved by the Legislature, and even if implementation is messy, it’s the right thing to do. We're voting yes.

PROPOSITION 32: Raises Minimum Wage. Initiative Statute.

Marchand Recommendation: NO

Who put it on the ballot:  Citizen’s initiative, with almost all money ($10 million) coming from a single individual: Joe Sanberg, a wealthy start-up investor (one of first investors in Blue Apron), also co-founded an online financial services company. Considers himself an anti-poverty advocate.

Summary:

• California’s minimum wage is currently $16 per hour. This measure increases that minimum, as follows:

• Employers with 26 or more employees would pay $17 hourly for the remainder of 2024 and $18 hourly beginning on January 1, 2025.

• Employers with 25 or fewer employees would pay $17 hourly beginning January 1, 2025, and $18 hourly beginning January 1, 2026.

• Thereafter, as existing law provides, the minimum wage annually adjusts for inflation.

• In addition to the generally applicable minimum wage described above, current laws establish a higher minimum wage in specified industries. This measure does not amend those laws.

Our Analysis:

It is complicated to figure out California's current minimum wage. As stated in the summary above, it is nominally $16 an hour, although it is indexed to inflation so is scheduled to increase to $16.50 in January. But the state has also recently enacted different minimum wages on specific industries: fast food workers have a $20 minimum wage (and there is now a fast food council with the ability to increase this wage by as much as 3.5% per year to keep pace with inflation), and workers in hospitals and certain other health care settings also have a new minimum wage law that will ultimately bring the minimum wage up to $25 (it will be implemented in steps). Then there are the 40 cities and counties that have enacted local minimum wage laws that are higher than the state’s. Emeryville is currently the highest at $19.36, West Hollywood is at $19.08, and San Francisco, Berkeley, Mountain View, and Sunnyvale are all over $18. Most of these wages will continue to increase with inflation.

Even for workers still making $16 per hour, there is bound to be wage pressure as businesses compete for entry level workers who can earn $20 at McDonald’s or $25 as a dishwasher at a hospital. With the inflation index pushing the base minimum wage to $17 soon, this is just a $1 dollar bump to the base wage in an environment where the minimum wage is already higher in many locations. In fact, labor unions and other advocates for a living wage reportedly asked Joe Sanberg (the person behind this initiative) to pull this from the ballot, as they would like to see a minimum wage that more closely reflects a living wage. According to the Massachusetts Institute of Technology’s living wage calculator, the living wage in California is $23.81 for a working couple with one child, and $21.24 for a single adult with no children (this is an average and would be higher in high-cost areas). The age distribution of low-wage workers is interesting as well. On a graph, it looks like a U: the majority of low-wage workers are either under 25 (29%) or over 50 (27%), with the next highest age group, from 25 to 29, at 12%. All other age groups represent 9% or less of low-wage earners. So, not all minimum wage earners are teenagers; there are a lot of older workers reliant on the minimum wage. This may be enough reason for you to vote yes.

What effect does increasing the minimum wage have on the economy? As with all things, it depends on who you ask, and what data sources you use. A 2023 report from the Congressional Budget Office projected increasing the federal minimum wage from $7.25 an hour to $17 would reduce employment by about 700,000 jobs. That’s .4% of the overall workforce. UC Berkeley’s Center on Wage and Employment Dynamics (which has a reputation of being pro labor), released a study last year that found that restaurants, retail stores and other small businesses generally do not cut jobs and may actually benefit when governments raise minimum pay, partly because the higher wage makes it easier to recruit workers and retain them, and turnover rates go down. Of course, businesses themselves do not agree, and after the adoption of the $20 minimum wage at fast food restaurants, there was a flurry of stories about chains closing down locations. For those of you who have not been inside a fast food restaurant recently, you are increasingly likely to find yourself entering your order into a machine rather than having a worker take your order. The City of West Hollywood, which had the highest minimum wage until surpassed by Emeryville earlier this year, commissioned a survey of their business community, and 43% of those surveyed reported layoffs or reduced employee hours in response to the minimum wage ordinance, though many businesses also acknowledged improved employee satisfaction and that it is easier to recruit and retain workers.

Where do we come down? We are not convinced that what amounts to a $1 increase in the base minimum wage is going to make much of a difference one way or the other. We also not sure why we are even being asked to vote on this, given all the legislative activity recently on minimum wage increases. Seems to us like a way for some rich guy who we don’t know anything about to raise his profile, and that makes us a little uncomfortable. On something like this, we default to our starting position: if the Legislature puts it on the ballot, we start with yes and see if there are good reasons to oppose it. If it ended up on the ballot through a paid signature collection process, it is the opposite: we need to be convinced there was a good reason to bypass the Legislature. This initiative fails this test, and we recommend voting no.

Proposition 33: Expands Local Governments’ Authority to Enact Rent Control on Residential Property. Initiative statute.

Marchand Recommendation: NO

Who put it on the ballot:  Citizen’s initiative, almost entirely paid for by the AIDS Healthcare Foundation, led by Michael Weinstein.

Summary:

• Current State law (the Costa-Hawkins Rental Housing Act of 1995) generally prevents cities and counties from limiting the initial rental rate that landlords may charge to new tenants in all types of housing, and from limiting rent increases for existing tenants in (1) residential properties that were first occupied after February 1, 1995; (2) single-family homes; and (3) condominiums.

• This measure would repeal that state law and would prohibit the state from limiting the abilities of cities and counties to maintain, enact, or expand residential rent-control ordinances.

Our Analysis:

Another election, another rent control measure. First, a brief summary of the Costa-Hawkins Rental Housing Act law that this proposition is seeking to repeal: Costa-Hawkins was passed in 1995, and restricted the ability of local governments to impose rent control in two primary ways: it prevented cities from imposing rent control on new construction, or on single-family homes and condominiums; and, it prohibited “vacancy control” entirely. Vacancy control, also known as “strict rent control,” is when landlords are prohibited from increasing the rent even when the tenants leave and the unit is vacant. So, to recap, under existing law (Costa-Hawkins), new (ish) construction (anything built since 1995) is exempt from any local rent control ordinance, all single-family homes and condominiums are exempt from rent control, and in those older apartment units that are subject to a local rent control ordinance, the landlord is allowed to reset the rent to the market rate when the unit is vacant.

This is the third election in six years for which Michael Weinstein, President of the AIDS Healthcare Foundation has single-handedly funded a signature gathering effort and campaign to expand the ability of local governments to enact rent control ordinances. In 2018, he spent more than $21 million funding Proposition 10 to repeal Costa-Hawkins, but it was defeated 59% to 41%. In 2020, he tried again, spending $23 million on Proposition 21, though this was a modified version that would have permitted rent control ordinances on buildings that were at least 15 years old. Same result: Proposition 21 was defeated 60% to 40%.

This year, he is back to a straightforward repeal of Costa-Hawkins. Proposition 33 would not establish any new rent control policies anywhere in the state. Rather, it would allow local governments the ability to adopt them. Most jurisdictions, even prior to Costa Hawkins, did not have rent control ordinances in place, but the local governments which did enact ordinances tended to have large populations, including Los Angeles, San Francisco, Berkeley, Oakland, and San Jose. There is a recent statewide limit on how much landlords can increase rent in a given year, a law that took effect on January 1, 2020: landlords can only increase the rent each year by 5% plus inflation based on the consumer price index (up to a maximum of 10% per year).

The AIDS Healthcare Foundation/Michael Weinstein doubled down this year, putting in over $41 million toward this initiative (which brings the total since the 2018 initiative to more than $85 million). The next highest donor to the “Yes” campaign only kicked in $600,000 (LA City Councilmember Kevin De Leon, from a campaign account), so this really is just Michael Weinstein in terms of financial support, though the California Democratic Party is among the supporters. Despite putting in twice as much as his previous initiative efforts, he is once again outgunned by a 2 to 1 margin by the “No” campaign, led by the California Apartment Association ($56 million) and state and national Realtor groups ($27 million).

We recommended a no vote on the two prior rent control initiatives and see no reason to change direction this year. Rent control can be a huge help for those who are already housed, but does not help those who need housing, and can be counterproductive, discouraging new construction and leading to higher overall rents. The consensus of economists seems to be that housing costs will not come down without a lot of new housing construction, and rent control is counter to this objective. To repeat what we said two years ago: Some people may decide to vote yes because California rents are way too high, this initiative provides for local control, and because it will take too long to reduce rents through new construction alone. Despite these arguments, we recommend a no vote because we think expanded rent control is likely to discourage the construction of much-needed new housing and therefore negatively affect renters in the long run.

Proposition 34: Restricts Spending of Prescription Drug Revenues by Certain Health Care Providers.

Marchand Recommendation: NO

Who put it on the ballot:  Citizen’s initiative, almost entirely paid for by the California Apartment Association

Summary:

• Requires health care providers meeting specified criteria to spend 98% of revenues from a federal discount prescription drug program on direct patient care.

• Applies only to health care providers that: (1) spent over $100,000,000 in any ten-year period on anything other than direct patient care; and (2) operated multifamily housing reported to have at least 500 high-severity health and safety violations.

• Penalizes noncompliance with spending restrictions by revoking health care licenses and tax-exempt status.

• Permanently authorizes the state to negotiate Medi-Cal drug prices on a statewide basis. 

Our Analysis:

You may have noticed the repeated references to Michael Weinstein and the AIDS Healthcare Foundation (AHF) in our analysis of Proposition 33. Well, Proposition 34 is the reason why. After shelling out many millions of dollars fighting what is now three rent control initiatives in six years, the California Apartment Association decided to go on offense and draft an initiative trying to take away a primary source of AHF’s funds.  Proposition 34 is rather deceptive, and never mentions the AHF, but it is the only entity that meets Proposition 34’s convoluted definition of “prescription drug price manipulator.”The underlying program that serves as the basis for this initiative is what is known as the “340B Drug Pricing Program.” This is a federal program that is intended to support safety net hospitals and clinics caring for low-income and underserved populations by discounting the cost of outpatient drugs. Pharmaceutical manufacturers are required to provide eligible hospitals and clinics with drugs at significantly discounted prices, and these eligible hospitals and clinics are then able to charge insurance companies the normal price for the drug. The money the hospital/clinic makes from the difference between their discounted drug acquisition cost and what they charge payors is intended to go toward supporting the mission of the hospital/clinic and improve access to care. AHF is a nonprofit organization that operates clinics and pharmacies caring for people living with HIV and AIDS, and participates in the 340B Drug Pricing Program. While there are other clinics that do these things, AHF is the only one that also meets all the other criteria spelled out in the initiative, such as having spent more than $100 million over a ten-year period on purposes that do not qualify as direct patient care, and being an owner-operator of “highly dangerous properties” (defined in the initiative as being an apartment owner where there have been numerous health and safety violations”). If this initiative passes, AHF would be the only clinic or hospital participating in the 340B Drug Pricing Program that would be required to spend at least 98% of their net revenue from the 340B program on direct patient care, submit reports to the state to show compliance, and face the loss of their license as well as other severe penalties for noncompliance.

We (Vince) are not fans of AHF/Michael Weinstein, and not just because we are tired of having to keep relearning stuff about rent control. We are also a little bothered by all the money AHF is spending on rent control, even if they argue that supporting affordable housing for those living with HIV and AIDS is a core part of caring for this population. However, for purposes of this analysis, we do not feel the need to wade into all of the allegations that are included in this initiative against AHF. The 340B Drug Pricing Program has its critics, and they include those who think there isn’t enough transparency or accountability into exactly how hospitals and clinics spend the money they make from the program. We don’t have the bandwidth to look into the allegations that AHF is a bad landlord. For purposes of this analysis, it is sufficient to know that this is an initiative that is targeting a single entity in California because the California Apartment Association doesn’t like that this entity is pushing for rent control. This is a terrible use of the initiative process. While we recommended a No vote on the rent control initiative, this does not mean we think AHF should be subject to an initiative designed to silence their voice. To the extent the 340B Drug program is being abused, this should be dealt with in a manner that affects all eligible entities equally. We do not support legislation that singles out one individual/corporation for disparate treatment from the law. We recommend a no vote.

Proposition 35. Provides Permanent Funding for Medi-Cal Health Care Services.

Marchand recommendation: NO

Who put it on the ballot:  Citizen’s initiative, led by the California Medical Association, Planned Parenthood, and Service Employees International Union (SEIU). After the initiative qualified, however, SEIU stepped away (reportedly due to the opposition of the Governor). The major donors to the ballot measure campaign are the California Hospital Association, Global Medical Response (ambulance operator, better known by one of their subsidiaries American Medical Response), the California Medical Association, with smaller contributions from a variety of other medical provider associations, including the California Primary Care Association, the California Dental Association, and Planned Parenthood, among others.

Summary:

• Makes permanent the existing tax on managed health care insurance plans (currently set to expire in 2026), which, if approved by the federal government, provides revenues to pay for health care services for low-income families with children, seniors, disabled persons, and other Medi-Cal recipients.

• Requires revenues to be used only for specified Medi-Cal services, including primary and specialty care, emergency care, family planning, mental health, and prescription drugs.

• Prohibits revenues from being used to replace existing Medi-Cal funding.

• Caps administrative expenses and requires independent audits of programs receiving funding.

Our Analysis:

This one is complicated, but we will try and simplify as much as we can here.  Under the Medicaid system (Medi-Cal in California), the federal government matches every dollar a state spends (sometimes the federal match is higher than 1 for 1, but again, we are trying to simplify). Due to how expensive the Medicaid program is, states generally try and maximize the amount of federal dollars while minimizing the state’s General Fund cost. One of the tricks to doing this is to implement a “managed care organization (MCO) tax.” A state will levy a tax on health insurance companies on a per enrollee basis, then “spend” this money by giving the tax back to the insurance company in the form of higher rates, and then collect the match from the federal government based on this “spending” even though no General Fund dollars were used. Let’s say, for the sake of simple math, the tax is $100 per Medi-Cal enrollee, and Blue Shield has 200,000 Medi-Cal enrollees. Blue Shield would pay a $20 million tax to the State of California, California would give $20 million back to Blue Shield to spend on their Medi-Cal enrollees, and then the state reports to the federal government that it has spent $20 million and wants its $20 million dollar match. Ta-da! California has $20 million it did not have before, and Blue Shield was made whole! Yes, it’s a shell game, or money laundering, or whatever you want to call it, but everyone understands what is happening and is in on it.

Of course, it’s more complicated than this. Because the feds must approve it, they want it to be a legitimate tax, and just taxing Medi-Cal enrollees and making health plans entirely whole again is clearly not a legitimate tax. Specifically, the feds require the tax to be “generally redistributive,” and the amount of the tax cannot be directly correlated to Medi-Cal payments. One of the ways to make it a (somewhat) legitimate tax (“redistributive”) is to require the tax to also be levied on non-Medi-Cal enrollees (we’ll call them commercial enrollees). There is obviously no federal match for commercial enrollees, so we apply a minimal tax on commercial enrollees (truly minimal: it is a small fraction of the tax on Medi-Cal enrollees). Health insurance companies can just recoup this minimal tax from a slightly higher insurance premium, so the health insurance companies have generally agreed to the MCO tax legislation.

Since the initial MCO tax was authorized in 2009, it has been renewed several times and modified somewhat each time. Each time California passes a new version of the MCO tax, the state submits the tax plan to the federal government for approval. The Legislature passed the current MCO tax in 2023 and the tax will expire at the end of 2026. It is projected to raise around $8 billion per year.

Medi-Cal provider rates (what doctors and hospitals get paid) have always been low relative to other payors, and because many of these rates have not been adjusted in many years (decades for some rates), providers struggle to provide care to Medi-Cal patients. Over the years we have greatly expanded who qualifies for Medi-Cal, so that more people have insurance, but since we have not meaningfully increased rates for physicians and other outpatient services, it is straining the system. When negotiating this most recent MCO tax, Governor Newsom promised to use a lot of the proceeds to increase provider rates. But then the state budget outlook worsened, and he walked this promise back and instead directed more of this money to offset General Fund expenses. In effect, it turned into a bait and switch: he got everyone to agree to an MCO tax based on a promise to raise Medi-Cal rates, and then once the tax was adopted, switched gears and used those funds in large part to balance the budget.

Which finally brings us to this initiative. Provider groups, led by doctors and hospitals, drafted this initiative to make the tax permanent (subject to federal approval), and to require the proceeds to be spent on increasing provider rates.

While we support increasing provider rates, and making the tax permanent would provide for greater stability in the Medi-Cal program, there are several issues of concern. First, the rates that are increased by this initiative are by and large directed toward those who could afford a seat at the table, rather than based on any kind of analysis of where rate increases are most necessary. The groups that funded this initiative (California Medical Association, California Hospital Association, Planned Parenthood, private ambulance companies) decided where the revenue should be directed. While overall provider rate increases would be higher under this initiative than under the currently approved MCO tax, there are some programs or provider types that received increases under the currently approved MCO tax (negotiated between the Legislature and the Governor) that are not targeted for increases by this initiative, including private duty nursing, certain long-term supports, and community health workers (though this latter group will eventually receive funding if the tax raises sufficient revenue). While there is no listed opposition in your voter guide, there are groups opposed, including the League of Women Voters, The Children’s Partnership, and the California Pan-Ethnic Health Network, all groups with which we are aligned more often than not.

Secondly, given we have argued against ballot box budgeting in the past, we would be remiss not to point out this is yet another example of ballot box budgeting. By directing the expenditures of this tax revenue, we are tying the hands of those we elect to make spending decisions. It is not just that this initiative requires the state to spend funds on provider rate increases rather than using the funds to offset General Fund support of the Medi-Cal program as a whole, which of course will require General Fund cuts elsewhere in the budget; it will also make it harder to provide increases to those who did not get a seat at the table and were left out of this initiative. With the MCO tax revenue already dedicated to certain providers and programs, and with the resulting hit to the General Fund, it is hard to imagine finding additional General Fund dollars to direct to those left behind.

The last concerning issue, and potentially more problematic, is a provision limiting the tax on commercial enrollees to $2.50 per enrollee per month. For context, under the current MCO tax, the tax rate on Medi-Cal enrollees maxes out at $274.00 per enrollee per month in 2026, while the tax rate on commercial enrollees maxes out at $2.25. Proposition 35 maintains the same basic tax scheme in perpetuity and contains language prohibiting the tax rate on commercial enrollees from exceeding $2.50 per month. The problem is that when the feds approved the current MCO tax, they included a letter warning California that while our tax scheme met the current statistical requirements for being “generally redistributive,” those current requirements did not actually produce a very redistributive effect, and they warned that new rules might be coming. From the Centers for Medicare and Medicaid Services (CMS) letter to California:

“California’s tax derives revenues mainly from Medicaid services (instead of non-Medicaid services) and uses these revenues as the state’s share of Medicaid payments. Accordingly, we are concerned that this tax program fails to be “generally redistributive in nature.” For the reasons described above, the result of the statistical tests, in these instances, do not appear consistent with either the definition of generally redistributive or reflective of the expected results based on the intended design of the statistical test. Therefore, CMS intends to develop and propose new regulatory requirements through the notice-and-comment rulemaking process to address this issue. […] Please be advised that any future changes to the federal requirements concerning health care-related taxes may require the state of California to come into compliance by modifying its tax structure.”

Based on this warning, in the future, the tax rate for Medi-Cal and commercial enrollees may need to be more closely related. But given Proposition 35’s strict limit of $2.50 per enrollee per month for commercial enrollees, the only way to do this under Proposition 35 would be to drastically cut the Medi-Cal enrollee tax rate, and therefore dramatically reduce the actual benefit of the MCO tax. Proposition 35 does contain a mechanism to amend its provisions, including this cap on commercial enrollee tax rates, but it would require a ¾ vote, rather than current law’s 2/3 vote requirement that applies to all tax measures. Getting a 2/3 vote on a tax increase is always a negotiation. Raising this requirement to a ¾ vote would significantly raise the bar, possibly jeopardizing the whole MCO tax program if the feds follow through on their threat. It is true many states rely on an MCO tax to help fund their Medicaid program, and it will be controversial for CMS to severely restrict this mechanism for drawing down additional federal matching funds, but if there is a change of administration, I wouldn’t want to predict how this plays out.

There are good reasons to support this initiative. It represents the best chance for a significant bump in Medi-Cal rates that we might see for a long time, even if the process for determining winners and losers was less than ideal. And passing this in the face of Governor Newsom’s objections might be his just reward for walking back his promises for greater increases from the current MCO tax. In the end, though, our consistent position against ballot box budgeting, and the potential poison pill of the cap on commercial rates coupled with the higher vote threshold, compels us to recommend a no vote.

Proposition 36: Allows Felony Charges and Increases Sentences for Certain Drug and Theft Crimes.

Marchand Recommendation: NO

Who put it on the ballot:  Citizen’s initiative placed on the ballot through signature collection, supported by Crime victims United, the California District Attorneys Association, the California Correctional Peace Officers Association, and the California Republican Party, with major funding coming from large retail companies, including Walmart, Target, and Home Depot.

Summary:

• Allows felony charges for possessing certain drugs and for thefts under $950 – both currently chargeable only as misdemeanors – with two prior drug or two prior theft convictions, as applicable. Defendants who plead guilty to felony drug possession and complete treatment can have charges dismissed.

• Increases sentences for other specified drug and theft crimes.

• Increased prison sentences may reduce savings that currently fund mental health and drug treatment programs, K-12 schools, and crime victims; any remaining savings may be used for new felony treatment program.

Our Analysis:

We are going to be honest here: this one is further outside our comfort zone than most propositions; it is not a policy area where either of us have experience. So, keep that in mind as you read this “analysis.”

Proposition 36 is the latest example of the criminal justice pendulum; after spending the late 2000s through the mid 2010s swinging away from the prior “tough on crime” posture, State policy is swinging back - with a vengeance, based on recent polling on this initiative. The very brief, condensed recent history of criminal justice policy in California is that a series of tough on crime measures, most notably the three strikes law, culminated in a dangerously overcrowded prison system and general reconsideration of whether incarcerating people for nonviolent crimes was good public policy. In 2009, a federal court found the overcrowding in our state prisons to be cruel and unusual punishment (later upheld by the U.S. Supreme Court) and ordered the state to reduce the prison population. In response, legislation enacted in 2011 shifted the imprisonment of non-violent and non-sexual offenders from state prisons to local jails, and made counties, rather than the state, responsible for supervising certain felons on parole (these changes are referred to as “realignment”). Then, in 2014, Proposition 47 changed certain crimes from felonies or “wobblers” (crimes that can be prosecuted either as a misdemeanor or a felony, at the discretion of the prosecutor) to instead be misdemeanors. More specifically, Proposition 47 reclassified some drug possession crimes, as well as property offenses with a theft value of $950 or less, to misdemeanors, and created a specific category of misdemeanor shoplifting, again tying it to thefts of no more than $950. People incarcerated in state prison for these offenses could petition for release. Proposition 47 also directed the savings from the reduced state prison expenses to go to fund diversion programs, including mental health and drug abuse treatment, as alternatives to incarceration. Funds derived from prison savings were also provided to victim services grants as well as reducing truancy in K-12.

Proposition 36 reverses some key provisions of Proposition 47 and makes other changes to increase prison sentences for certain drug and theft crimes. Regarding drug offenses, Proposition 36 would allow people who are arrested for drugs like heroin, cocaine, and fentanyl, and who have two or more prior drug convictions, to be charged with a “treatment-mandated felony” rather than a misdemeanor. Defendants could plead guilty or no contest and enter into a court-approved treatment program, and if successfully completed, the charges would be dismissed. If the person failed to complete the program, they would face up to three years in a county jail or state prison. Proposition 36 eliminates jail as an option for those convicted of selling large quantities of drugs, and instead requires the full sentence to be served in state prison. Similarly, for property crimes with a value of $950 or less, including petty theft and shoplifting, if a person had two prior theft convictions, they could be charged with a felony and receive a sentence of up to three years. Proposition 36 also adds sentence enhancements where the theft or property damage exceeds certain amounts.  Proposition 36 also adds fentanyl to the list of drugs that, when convicted of possessing these drugs while carrying a loaded firearm, increase the prison term from up to one year to up to four years. Finally, the initiative adds a provision requiring courts to warn people that they could be charged with murder if they sell or provide illegal drugs that kill someone.

We all know what is driving this initiative. Many of us have either experienced, witnessed, or heard stories about the “lawlessness” that seems to be afflicting many areas. In Northern California where we live, the stories focus on Oakland and San Francisco. Videos of people running into stores and filling garbage bags and running out with impunity, a rash of car break-ins, and so on. While statistically property crime on a per capita basis is still well below the peaks of the 1980s and early 1990s, there is no question the public in general is frustrated by what they view as an inadequate response by law enforcement, and local and state elected officials. Proposition 47 is often pointed to as a direct cause of the increase in drug and property crimes: by making these crimes misdemeanors, we have removed the incentive for arrest and prosecution.

However, lingering effects from the pandemic may be a bigger driver of crime than Proposition 47. The Public Policy Institute of California, which has been tracking Proposition 47 effects since it was enacted, released an interesting report in September of this year, looking at crime in the aftermath of both Proposition 47 and the pandemic. After the enactment of Proposition 47, prison and jail populations went down and property crimes went up, but not nearly as much as what happened as part of the pandemic response. According to PPIC, “fewer cleared [prosecuted] property crimes after both Proposition 47 and the pandemic led to a rise in commercial burglaries, and a drop in the jail population post-pandemic is also tied to a rise in commercial burglaries. Evidence is clearer that retail theft increased due to pandemic responses by the criminal justice system, and the increases were of greater magnitude than increases due to Proposition 47.”

We are torn on this one. As stated before, we start from a position that initiatives on the ballot because of a paid signature gathering campaign, versus the legislative process, must meet a higher bar for us to recommend a support position. We are generally in agreement with those who argue that placing nonviolent, petty criminals in prison is expensive, and does not necessarily make us safer. We are especially concerned about the loss of tens of millions of funds Proposition 47 dedicated to mental health and drug treatment. And yet. One of the reasons the initiative process exists is when the Legislature is not responsive to an issue of public concern. Even if you believe the uproar about rising crime is overwrought and fueled by sensational media stories, a good portion of the public, including the retail business community, was clearly looking for its elected leaders for a response. It is fair to say the response was tepid until this initiative became a threat. Earlier this year, Governor Newsom signed a package of bills designed to target retail theft that will make it easier to arrest and prosecute serial shoplifters, without going as far as this initiative in rolling back Proposition 47. It is not clear this would have happened had it not been for the threat of this initiative. So, we understand the impulse to support this initiative. If you believe a person with repeated drug possession and/or petty theft convictions should serve time in state prison, vote yes. However, in the end, we can’t bring ourselves to go back to the lock ‘em up era of twenty years ago. It is expensive, and often counterproductive. Additionally, we believe local law enforcement and prosecutors can make more use of misdemeanor penalties, including jail time, without the long-term harms that felony convictions entail. We recommend a no vote.