California voters will be asked to decide 13 ballot measures on the November 7 General Election ballot. Ten of the 13 would raise taxes, authorize the issuance of new debt or define how state funds must be spent.

Five of the fiscal measures, Propositions 1A-1E, were put on the ballot by the Legislature with Governor Schwarzenegger’s support after extended negotiations about the governor’s originally proposed $70 billion infrastructure improvement bond package. Four of these five measures would authorize approximately $37 billion in additional borrowing by the state for roads and highways ($19.9 billion), school construction ($10.4 billion), flood prevention ($4 billion), and low- and moderate-income housing ($2.8 billion). The fifth measure would permanently stop the diversion of transportation funds for funding activities unrelated to transportation.

An umbrella campaign in support of Propositions 1A-1E has been organized by the Governor, the legislative leadership, unions, and the business community. Under the umbrella there are also campaigns on behalf of each measure. Although California voters regularly vote down bond measures, this package of bonds is given a chance of passage because of the Governor’s high profile support and the measures’ bipartisan, deep-pocket backers.

Four of the five other fiscal measures would impose new taxes. Each was qualified for the ballot by registered voter petition drives. These four measures would collectively raise about $3.1 billion to fund health services ($2.1 billion), school reform ($450 million), research on alternative fuels ($380 million), and campaign finance reform ($200 million). The fifth measure would authorize the issuance of up to $5.4 billion in general obligation bonds to improve water quality and flood control.

In addition to the ten fiscal measures, there are measures that would increase the criminal penalties for violent sex offenders, require a doctor to provide notice to a parent at least 48 hours before performing an abortion on a minor, and tighten the circumstances under which the state can take private property with compensation.

The level of campaign funding for the individual measures varies greatly depending on the substance of the measure. Collectively, it is expected that there will be more than $200 million spent in support and opposition to the ballot measures, with some estimating that total expenditures will approach $300 million.

It appears that Proposition 87, which would tax oil production in California and permit the issuance of bonds to fund alternative energy research, will draw the most funding and attention. Contributions for and against this measure alone may top $110 million (or about 30% of the $380 million in new taxes it is expected to generate!). The measure is sponsored by venture capitalist Vinod Khosla, who invests in alternative energy companies. Steve Bing, also a sponsor of the measure, has contributed $43 million to the Yes side, the largest individual contribution ever to a ballot measure. Former President Clinton and Vice President Gore are also supporting the measure. Interestingly, the state’s most prominent newspapers – including the liberal San Francisco Chronicle – have written editorials opposing Proposition 87. Petroleum and taxpayers’ rights interests are financing most of the opposition to Proposition 87. Governor Schwarzenegger also opposes the measure, based on its tax increase. Recent polling suggests that the measure has less than 50% support.

Briefly, the 13 initiatives are:

Proposition 1A
Transportation Funding Protection. Proposition 1A would provide additional protections against the use of transportation revenues and the sales tax on motor fuels from being used to support the state’s general fund. An earlier initiative, Proposition 42, protected transportation funds but made it too easy for the state to borrow the funds for other purposes. Proposition 1A would establish a payback schedule for any loans and allows a loan for a fiscal emergency only twice every ten years.

Proposition 1B
Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006. Proposition 1B would authorize $19.925 billion in general obligation bonds to fund a number of transportation infrastructure projects, including traffic congestion relief on freeways, local street repair, improving seismic safety, public transit, security upgrades at ports and environmental mitigation. The construction trade unions and builders appear to be financing a tailored campaign in support of Propositions 1A and 1B.

Proposition 1C
Housing and Emergency Shelter Trust Fund. Proposition 1C would authorize the state to issue $2.8 billion in general obligation bonds for low- and moderate-income housing ($1.5 billion), infrastructure related to infill housing ($850 million), and housing near mass transit ($300 million).

Proposition 1D
Kindergarten-University Public Education Bond Act of 2006. Proposition 1D would authorize $10.4 billion in general obligation bonds to build and repair school facilities at all levels, splitting $7.3 billion for K-12 and $3.1 billion for higher education. The California Teachers Association is running a significant independent campaign in favor of Proposition 1D.

Proposition 1E
Disaster Preparedness and Flood Prevention Bond Act of 2006. Proposition 1E would authorize $4 billion in general obligation bonds for flood control.

Proposition 83
Sex Offenders. Sexually Violent Predators. Punishment, Residence Restrictions and Monitoring. Proposition 83 would amend “Jessica’s Law,” increasing the criminal penalties for violent and habitual sex offenders and child molesters. It would prohibit known child molesters from living within 2,000 feet of a school or park and would provide that they be monitored by global positioning satellite systems. Proposition 83 would also expand the definition of "sexually violent predator" and allow for indeterminate civil commitment for certain offenders. This measure is sponsored by Senator George Runner and Assemblywoman Sharon Runner and is supported by Governor Schwarzenegger. Politically, the measure is expected to draw conservative voters to the polls, thus helping GOP turnout on election day.

Proposition 84
Water Quality, Safety and Supply. Flood Control. Natural Resource Protection. Park Improvements. Bonds. Proposition 84 would authorize $5.4 billion in general obligation bonds to develop safe drinking water, enhance water quality and supply, strengthen flood control, and provide for state and local park improvements. This measure is in addition to the flood control bond provided for in Proposition 1E.

Proposition 85
Waiting Period and Parental Notification Before Termination of Pregnancy. Proposition 85 would require that a physician notify a parent of a minor at least 48 hours before performing an abortion on the minor. This measure is quite similar to Proposition 73, which was defeated on the November 2005 Special Election ballot. Similar to Proposition 83, this measure is expected to boost conservative turnout for the general election.

Proposition 86
Tax on Cigarettes. Proposition 86 would increase the tax on cigarettes from 87 cents to $2.60 a pack. This would raise $2.1 billion in revenue when fully implemented, declining over time. The increased tax revenue would be dedicated to healthcare, including funding of emergency hospital care, children’s healthcare and nursing education. As with Proposition 83, this measure is attracting a lot of money on both sides. The American Cancer Society, American Lung Association, and California Hospital Association are promoting the Yes vote, while the opposition is led by Philip Morris and R.J. Reynolds. Other recent attempts to raise the taxes on cigarettes have failed.

Proposition 87
Alternative Energy. Research, Production, Incentive. Tax on California Oil. This measure would amend California’s Constitution and impose a severance tax on oil produced in California to fund a $4 billion program to research and invest in alternative energy sources. It would authorize up to $4 billion in bonds to be sold, backed by the severance tax revenues. (A focused political analysis of Proposition 87 is provided in our Initiative Update above.)

Proposition 88
Education Funding. Real Property Parcel Tax. Proposition 88 would impose a $50 tax on parcels of property in the state to fund class size reduction, the purchase of instructional materials, and provide for increased safety. The tax would raise approximately $450 million. The sponsor of the measure is EdVoice. Since its qualification for the ballot, its sponsors have stopped campaigning for the measure, and it is trailing badly in the polls.

Proposition 89
Political Campaigns. Public Financing. Corporate Tax Increase. Contribution and Expenditure Limits. Proposition 88 would limit the amount that corporations can contribute to candidates and ballot measures in political campaigns. Corporations would be restricted to $10,000 in contributions to an initiative campaign, $1,000 to a statewide candidate who does not accept public funds, and $500 to a legislative candidate who does not accept public funds. Contributions to candidates who accept public funds would be prohibited. The corporate income tax would be increased from 8.84% to 9.04% and the tax on financial institutions would be increased from 10.84% to 11.04% to fund the measure. The measure is sponsored by the California Nurses Association and opposed by the California Chamber of Commerce, California Business Roundtable, and California Teachers Association. If the measure passes, its constitutionality will be challenged in court.

Proposition 90
Government Acquisition, Regulation of Private Property. Proposition 90 would prohibit state and local government from taking private property with compensation through the process of eminent domain to promote other private interests. The government entity would have to use the property for a public purpose such as building a road or a school. It would also require that if the government entity abandons the use that the property was condemned for, the property must be offered for sale back to the original owner. It would further require that compensation be paid to a property owner when substantial economic loss is caused by the adoption of a new governmental regulation. The measure is intended to address the U.S. Supreme Court’s decision in Kelo v. New London, in which a home was taken in eminent domain and then transferred to a developer. The measure is supported by taxpayer and property rights groups. The opponents include local governments and business organizations.