CAR Explains November ballot initiatives

Published: September 27, 2010

Option:C.A.R. Ballot Position Options:

1. FOR: This ballot measure is consistent with C.A.R. policy and its passage could be beneficial to the real estate industry.
2. AGAINST: This ballot measure conflicts with C.A.R. policy and its passage could have a harmful effect on the real estate industry.
3. NEUTRAL: This ballot measure may be real estate related, but C.A.R. has chosen not to take a position.
4. NOT REAL ESTATE RELATED: This ballot measure may be significant, but is deemed to not be related to property or real estate transactions

PROPOSITION 19: The Regulate, Control and Tax Cannabis Act of 2010. Initiative Statute.

Summary: This ballot measure permits individuals that are 21 years of age or older to possess and transport up to one ounce of marijuana for personal use. Cities and counties would be permitted to restrict the sale of marijuana within its boundary; however, the citizens would still maintain the right to posses and consume marijuana. The proposition permits the cultivation of marijuana on private property in an area not to exceed 25 square feet per residence or parcel and requires the property owner’s approval for cultivation on leased and rented properties. Cities and counties would be permitted to alter the above provisions by increasing the amount of marijuana that may either be possessed by an individual or cultivated in a residence or on a parcel. Local governments would also be permitted to license and regulate the sale and cultivation of marijuana by placing limits on zoning, location, size, and hours of operation. Additionally, cities and counties would be permitted to tax the commercial production and sale of marijuana in order to recoup any direct or indirect costs associated with this activity. The Legislative Analyst estimates that state and local governments may save tens of millions of dollars annually on the costs of incarcerating marijuana offenders. There are unknown, but potentially major tax revenues to state and local government related to the production and sale of marijuana products.

Pro: Proponents argue that California’s law criminalizing cannabis has failed, despite spending decades arresting millions of non-violent cannabis users. Cannabis, according to proponents, has fewer harmful effects then either alcohol or cigarettes, which are both legal for adult consumption. It is also argued that there is an estimated $15 billion in illegal cannabis transactions in California each year, and that taxing and regulating cannabis, like alcohol and cigarettes, will yield billions of dollars in revenue for the state.

Con: Opponents argue that the measure is vague and provides little guidance to local governments with regard to the regulation of marijuana and is in conflict with federal law that maintains that the possession and cultivation of marijuana is an illegal activity. Additionally, opponents argue that legalization would bring with it additional substance abuse in the state, and the long-term public costs associated with that would vastly exceed the relatively modest amount of new revenue legal weed might bring in.

NOTE: C.A.R.’s Board of Directors, at its June 2010 meetings, adopted an “AGAINST” position on this proposition

Position: ___ FOR      _X_AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 20: Voters First Act for Congress. Initiative Constitutional Amendment.

Summary: Proposition 11, which was approved by the voters in 2008, created the Citizens Redistricting Commission which is responsible for developing the redistricting plans for the state legislature and Board of Equalization. Current law permits the legislature to develop the redistricting plans for Congressional districts. This proposition proposes to transfer the authority to develop those districts to the Citizens Redistricting Commission.

Pro: Proponents argue that there is a serious conflict of interest when legislators are allowed to draw district boundaries for themselves or their friends because they divide up neighborhoods and communities to create districts where they are virtually guaranteed reelection. This measure will assure a balanced, inclusive process that produces fair districts, making politicians more accountable to voters, and stops California’s Congressional delegation from being controlled by the party in power.

Con: Opponents argue that measure gives the final say for redistricting to an unelected 14-member “redistricting commission,” and won’t keep politicians out of redistricting, but will instead let them hide behind a tangled web of bureaucrats picked for their political ties.

NOTE: C.A.R.’s Board of Directors, at its June 2010 meetings, adopted a “NOT REAL ESTATE RELATED” position on this proposition

Position: ___ FOR      ___AGAINST      ___NEUTRAL      _X_NOT REAL ESTATE RELATED

PROPOSITION 21: State Parks and Wildlife Conservation Trust Fund Act. Initiative Constitutional Amendment.

Committee: Taxation and Government Finance Committee

Summary: Current funding for the establishment and maintenance of California State Parks is provided by the General Fund, park user fees, portions of the state’s gasoline tax and previously approved bond funds. Proposition 21 creates the State Parks and Wildlife Conservation Trust Fund. Funding for the State Parks and Wildlife Conservation Trust Fund would come from an additional annual surcharge of $18 which will be added to every vehicle licensing fee charged on or after January 1, 2011. Those vehicles that are subject to the surcharge will have paid for the “State Park Access Pass” and will receive free admission to, and parking at all parks in the State parks system. This charge, however, does not apply to commercial vehicles, permanent trailers or mobilehomes. These funds will be used solely for the operation and benefit of current State park facilities, the creation of new parks and the protection of California’s forests, waterways and wildlife areas. The State Parks and Wildlife Conservation Trust Fund is subject to annual audits by the State Auditor and will also be regulated by the Citizens Oversight Committee, which will be established to review the audits and report on the act’s implementation and effectiveness.

Pro: Proponents for this measure argue that the State Parks and Wildlife Conservation Trust Fund would provide a stable and adequate source of funding for State parks which will make them safer, cleaner and keep them available to the public for years to come. It would also provide free day use admission for all vehicles subject to the surcharge, providing better access. Supporters also point out that this measure will allow General Fund monies that were previously allocated to the State parks system to be utilized for other things.

Con: Opponents argue that this surcharge is really a “car tax”. Rather then reducing spending to fit the current budget, politicians are deceptively trying to raise taxes by calling the tax increase a fee. This is a tax increase that does not even benefit some of California’s most pressing funding issues such as education and infrastructure development, the only benefit is to the State parks system. The opposition to this is measure also points out that while the measure would allow for free admission to parks within the State park system, it does not prohibit the State from instituting more fees for services inside the parks, thus leaving the window open for additional park charges on top of the new “fee”.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 22: Local Taxpayer, Public Safety, and Transportation Protection Act of 2010. Initiative Constitutional Amendment.

Committee: Taxation and Government Finance Committee

Summary: This measure proposes to restrict the legislature’s ability to transfer, divert, re-appropriate, borrow or loan local tax revenues. Currently, the State cannot permanently shift local tax revenues, but they can temporarily borrow or redirect some of those revenues. Under Proposition 22 the state would not be able to re-allocate property taxes revenues that go to local redevelopment agencies for any other purpose, nor would they be able to shift property taxes that go to cities, counties or special districts to schools without an order from the Governor due to “severe fiscal hardship” or a two-thirds vote of both houses of the legislature. If these funds were to be re-allocated the revenues must be repaid within three fiscal years. The measure also restricts the State’s ability to borrow or divert local funds allocated from the Highway Users Tax Account, the Public Transportation Account or the Transportation Investment Fund. Although these tax revenues could be re-allocated through a series of public hearings or reduced due to the taxes being repealed the legislature would have to find an alternative source of revenue to replace the diverted funds.

Pro: Proponents argue that the State keeps taking or borrowing funds that are designated for transportation projects. These funds come from taxes that residents pay to local agencies or on things like gas, and the public have voted to allocate these fund to transportation projects, maintenance of roads and public services, such as 9-1-1 services and fire protection. These allocated tax funds are essential to keeping these services running and they need to stay with the cities and counties that need them.

Con: Opponents argue that this measure would take money from schools by putting a restriction on revenues that could be diverted to fund education. Due to its protection of funds designated for transportation, Proposition 22 would also create less available funding for firefighters and other similar programs.  Opponents also claim that the protections provided to redevelopment agencies will allow them to pass property tax money directly to local developers with limited supervision as well as allowing them to continue taking private property by eminent domain. The redevelopment agencies would have free access to property tax dollars and the state would be left out in the cold in a time of economic crisis.

NOTE: C.A.R.’s Board of Directors, at its October 2001 meeting, voted to take a “NEUTRAL” position on PROPOSITION 42 of 2002, known as the Transportation Funding:  Sales and Use Tax Revenues, Legislative Constitutional Amendment, which was approved by the voters. Proposition 42 requires, from 2003 through 2008, that gasoline sales tax revenues be used for state and local transportation purposes and allocated the revenues as follows: 20 percent to public transportation, 40 percent to transportation improvement projects, and 40 percent to local streets and roads improvements. C.A.R.’s Board of Directors, at its June 2006 Meetings, voted to take a “FOR” position on Proposition 1A of 2006, known as the Transportation Funding Protection, which was approved by the voters. Proposition 1A changed the provisions for suspending transfers from the General Fund to the Transportation Investment Fund (TIF) by requiring a Governor’s proclamation in addition to legislation that both suspends the transfer and repays the TIF, with interest, by the end of the third fiscal year of the original suspension. TIF transfers may only be suspended twice within 10 years, and only if the previous suspension has been repaid. The measure also made allocation formula established by Proposition 42, permanent. C.A.R.’s Board of Directors, at its October 2007 Meetings, voted to take a “NEUTRAL” position on Proposition 91 of 2008, known as the Transportation Funding, which was rejected by the voters. Proposition 91 would have eliminated General Fund “borrowing” of transportation funds (except for cash-flow purposes), required the TIF to be repaid within 30 days of the state budget’s adoption, mandated the repayment of funds not transferred to the TIF prior to July 1, 2007, by June 30, 2017 and prohibited the use of TIF funds for uses unrelated to transportation.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 23: Suspension of AB 32. Initiative Constitutional Amendment.

Committee: Land Use and Environmental Committee

Summary: In 2006, the California Global warming Solutions Act of 2006, or AB 32, was enacted by the legislature. This legislation proposed to implement rules and regulations designed to reduce California’s Green House Gas (GHG) emissions to 1990 levels by 2020. This process of reducing GHG’s is slated to begin in 2012. Proposition 23, known as the “California Jobs Initiative”, proposes to suspend the implementation of those rules and regulations until California’s unemployment rate, which currently hovers around 12%, is 5.5% or less for four consecutive quarters. State agencies would not be allowed to implement any of the regulations proposed under AB 32 and many of the regulations that have already been adopted would be suspended.

Pro: Proponents argue that AB 32 will cost millions in increased energy rates, both for homes and businesses resulting in higher costs passed on to consumers for goods and services. In addition, proponents content that businesses will be hit hard by increased energy costs and will be forced to lay-off employees or move their business out of state. To meet the goals of AB 32, an increase in energy taxes is imminent for new energy investments required to meet GHG reduction goals. These investments could increase energy and administrative costs, reducing the funding available for other programs.

Con: Opponents argue that the measure threatens public health by allowing continued air pollution. Current economists forecast that the states unemployment will remain above 8% for at least 5 years, if not longer, thus a temporary suspension of AB 32 could result in none of the GHG reducing regulations being adopted until the 2020 deadline. Opponents say the passage of Proposition 23 would jeopardize California based clean energy businesses, clean energy jobs and stifle investment in clean energy, which could have amounted to cost savings for businesses and more jobs for Californians. Opponents state that this proposition is an effort by large oil companies to reduce state environmental regulations and the companies costs at the expense of the people of California.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 24: Repeal Corporate Tax Loopholes Act. Initiative Constitutional Amendment.

Committee: Taxation and Government Finance Committee

Summary: In 2008 and 2009 legislation that affected how corporations were taxed was instituted by the Legislature and the Governor. The first allows a corporation to use their company’s net operating loss (when a business has less income then deductions) to reduce a previous year’s state taxes or to reduce future taxes for up to 20 years starting on January 1, 2011. The second would allow a corporation that has received tax credits to apply any unused credits to another affiliated corporation. Finally, multi-state businesses would have the ability to choose between two formulas to determine their level of income for the California portion of their business. This proposition would repeal each of those measures.

Pro: Proponents argue that this measure is the “Tax Fairness Act”. This measure will do away with tax cuts provided to businesses to the detriment of education and public services funding. Proponents say that these tax benefits affect a small portion of California’s businesses, while providing large breaks to out of state corporations. These tax breaks depleted State revenues that could be used to prevent the cuts to local programs that this financial climate is forcing legislators to make.

Con: Opponents argue that small businesses in California are already struggling in this economy and Proposition 24 would increase their taxes, driving them out of business and costing the state jobs. Not only would this measure penalize California based businesses but it raises taxes on businesses that were trying to expand to California, which would further decrease job growth. Loss of jobs means a loss of revenue that would further limit the funds available for education and social programs.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 25: Passing the Budget on Time Act of 2010. Initiative Constitutional Amendment.

Committee: Taxation and Government Finance Committee

Summary: Currently two-thirds of each house of the legislature must approve a budget bill in order for it to be enacted. Proposition 25 would change this requirement and instead allow a budget to be passed by a majority vote in both houses. If the legislature failed to enact a budget by the budget deadline, the legislators would receive no pay, reimbursement or per diem until the budget is passed with no retroactive payments. The Legislative Analyst’s Office states that the measure does not specifically address the legislative vote requirement for increasing state taxes, but it does indicate that it is not the intention of the measure to change the existing two-thirds vote requirement.

Pro: Proponents argue that the Legislature cannot seem to pass a budget on time, which hurts businesses, local and state improvement projects, communities and state workers and halts projects while legislators argue. Allowing a budget to be passed with a majority vote provides an opportunity to break the stalemate while still preserving the two-thirds vote requirement for tax increases. Legislators would also be encouraged to pass a budget on time because of the irretrievable loss of pay that would be imposed upon them if the budget is late.

Con: Opponents argue that this measure would make it easier for legislators to increase taxes without a two-thirds vote by disguising them as fees and enacting them with the budget. They also says that Legislators could more easily add increased perks for themselves and their districts into the budget and it would eliminate the right of voters  to use the referendum process to force a vote on taxes disguised as fees.  Opponents argue that this measure could be used to circumvent Proposition 13’s two-thirds vote requirement for taxes giving the legislature free reign to raise any taxes.

NOTE: C.A.R.’s Board of Directors, at its October 2003 Meetings, voted to take a “AGAINST” position on Proposition 56 of 2004, known as the State Budget, Related Taxes and Reserve Voting Requirements, which was rejected by the voters. This proposition would have reduced the Legislature’s current 2/3 vote threshold to pass a budget to 55 percent. The measure would have forced the Legislature to stay in session until a budget was enacted, and prohibited the consideration of any bill unrelated to the budget. Proposition 56 would have also required 25% of any General Fund surplus to be placed in a reserve fund and prohibited legislators from “bullying” or punishing another legislator for his or her vote on the budget.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 26: Increase the Vote requirement for State Levies and Charges to Two-Thirds. Initiative Constitutional Amendment.

Committee: Taxation and Government Finance Committee

Summary: Current law requires that any increase in taxes must be passed by a two-thirds vote in both houses of the Legislature in order to be imposed. This measure expands the definition of a “tax” to include any charge or levy that does not provide a direct benefit or privilege to the payer, a government service or product, pay for the regulatory costs of the state, allow for the use of state property, or is a fine or penalty imposed for a violation of the law. Any other charges or levies would be considered taxes. If a charge that meets the expanded definition was approved by the Legislature after January 1, 2010, without a passing margin of two-thirds it will be voided within twelve months of its enactment unless the tax goes through the legislative process again.

Pro: Proponents for this measure argue that California’s taxes are increasing every year despite taxpayers voting against tax increases. This measure would make it more difficult for politicians to impose taxes labeled as “fees” on Californians by expanding the definition of a tax.

Con: Opponents argue that this measure will make it more difficult for legislators to pass laws to raise revenue in an already difficult financial environment. Local and state government would lose funds that are being used for basic services or maintaining roads. As it requires already adopted proposals to be repealed, the measure would cause an additional decline in anticipated revenues. It is also being argued that Proposition 26 will cause “fees” that are being paid by large corporations to clean up oil spills, and other pollution to fall under the expanded definition of a “tax” and, so, be more difficult to pass.

NOTE: C.A.R.’s Board of Directors, at its September 2000 Meetings, voted to take a “NEUTRAL” position on Proposition 37 of 2000, known as the Fees, Vote Requirements, Taxes, Initiative, which was rejected by the voters. This proposition would have redefined certain activity fees related to monitoring, studying, or mitigating environmental, societal or economic effects as taxes, thus, requiring a two-thirds vote for adoption.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED

PROPOSITION 27: Financial Accountability in Redistricting Act (FAIR Act). Initiative Constitutional Amendment.

Committee: Legislative Committee

Summary: In 2008 Proposition 11 created the Citizens Redistricting Commission to establish new State Assembly, Senate and Board of Equalization (BOE) district boundaries.  Proposition 27 repeals Proposition 11 and returns the responsibility to create new boundaries for the Senate, Assembly and BOE districts to the State Legislature. The power to determine district boundaries for Congress would remain with the Legislature. The measure requires the Legislature to examine the areas for each office and create districts that are equal in population and geographically congruent. Public hearings and opportunities for the general public to examine the redistricting information will be made available. A cap on spending for the purposes of redistricting will be instituted at $2,500,000. Please see also Proposition 20 which would subject Congressional districts to the Redistricting Commission.

Pro: Proponents argue that the current redistricting process allows for an increase in bureaucracy which causes unnecessary spending that the state cannot afford in this economic environment. The new plan will cap redistricting spending and save the state money. The measure would give voters a voice in the redistricting process that they lack in the current process and the requirement for equal sized districts would ensure that all voters are represented equally.

Con: Opponents argue that the Citizens Redistricting Commission was voted on by the people because they are tired of the legislators dictating their own districts. If this measure passes it will return redistricting power to the Legislature allowing them to continue to gerrymander “safe” districts to protect their jobs.

NOTE: The C.A.R. Board of Directors, at its October 2008 Meetings, voted to take a “NOT REAL ESTATE RELATED” position on Proposition 11 of 2008, which was approved by the voters. Proposition 11 changed the state’s redistricting process. Currently, the Senate, Assembly and BOE redistricting plans are developed by a 14 member Citizens Redistricting Commission, comprised of registered voters (5 Democrats, 5 Republicans, and 4 unaffiliated). Congressional districts, however, remain with the state Legislature. Districts are required to be geographically compact and are not permitted to favor or discriminate against incumbents, candidates, or parties. Redistricting plan certification requires 9 commission member votes in conjunction with voter approval. If the commission does not approve a final map or it’s rejected by the electorate, California’s Supreme Court is required to adjust the redistricting plan to adhere to the district boundary requirements.

Position: ___ FOR      ___AGAINST      ___NEUTRAL      ___NOT REAL ESTATE RELATED


Last modified: September 27, 2010 at 7:42 am | Originally published: September 27, 2010 at 7:42 am
Printed: September 27, 2020