California Ballot Propositions + State & Local Races Fall 2014-10-26

[Notes to Readers, which is often related topically to posts, can be found via this link.]

As promised, there follows a discussion of the statewide ballot propositions along with statewide races.  I also offer some comments/thoughts/recommendations about races for office in San Francisco and a few selected Bay Area localities.  Again, the discussion that follows is long, as you will see at the end, you will have to do some of this yourself.

First the state ballot propositions.

Proposition 1 is an extremely ambitious, $7.545 billion bond issue that will be used to address the state’s chronic water shortage.  The proposition is championed by Governor Brown and is addressed at perhaps the most single pressing issue in our state. 

As I mentioned in last week’s post on local ballot propositions (here’s a link), bond issues are not my ideal way of spending public money and the $360 million annual interest charge on these bonds is a great illustration why.  That’s $360 million less that the state has available for other running expenses.  In this instance, however, that expense is apparently mitigated by what the ballot summary characterizes as “a couple of hundred million dollars annually” (on average) in local government savings.  (But note further that $425 million in existing bond indebtedness for water projects will be “redirected” for the purposes of Proposition 1, so we’re actually talking about an $8 billion plan here.) 

While $360 million is a lot of money, it’s interesting to note that it’s only one 1/3 of 1% of the current General Fund budget according to the Legislative Analyst.  This is one big place, California.

About half the money will be administered by the California Water Commission – the Legislature will not be involved.  $5.7 billion can only be spent if matched by (mainly) local governments.  So we’re talking about a massive infrastructure spending program here.

While this is a huge amount of debt/obligation to incur, it is clear that current revenues cannot by themselves address California’s chronic water problems and that infrastructure spending of this type is necessary.  We’re not talking here about some cosmetic or feel-good measure that was put on the ballot by a special interest group.  Water and the problems related to water are probably the biggest issue confronting California’s future. 

I therefore recommend a “yes” vote.

Proposition 2 creates a “rainy day” fund of 1.5% of General Fund revenues annually (up to 10% of total General Fund revenues) and requires that half of that money be used to pay down state debt and unfunded liabilities.  Under certain circumtances additional money can go into the fund from personal capital gains tax revenues and also into a dedicated K-12 school reserve fund.  The proposition also regulates maximum budget reserves school districts can maintain.  There are provisions authorizing emergency spending under certain circumstances.

Proposition 2 would replace an existing rainy day fund provision that, in general terms, was far looser both in terms of how money was collected and how it was spent.

This is the other ballot proposition that is supported by Governor Brown, apparently in lieu of a personal reelection campaign that he is almost certain to win in a walk.

I recommend a “yes” vote.  This ballot proposition introduces some badly-needed financial discipline into the state revenue collection system and helps smooth out the peaks and valleys resulting from uneven economic cycles. 

There is no Proposition 3 (nor any other propositions up to and including non-existent Proposition 44).

Proposition 45 makes decisions regarding health insurance rates “or anything else affecting the charges associated with health insurance” subject to the approval of the state Insurance Commissioner.  (One exception -- it does not apply to large group employer group health plans.)  It also prohibits insurance companies from determining policy eligibility or rates based on lack of prior coverage or credit history (although existing law and practice basically address this issue already).

It’s pretty clear what is going on here.  This is an effort to assert state control over the cost of health insurance and to try to insert some transparency into the process (by also requiring insurance companies to provide sworn statements attesting to the accuracy of information provided to justify rate changes).

I recommend a “yes” vote.  There is something of a clash here between the freedom of businesses to operate in the marketplace and the public interest when it comes to matters that vitally affect Californians.  We see an example in the way utility rates are set (a private company, PG&E, has its rates regulared by the state Public Utilities Commission) and the Insurance Commissioner already regulates the cost of automobile insurance.  Health care is just too important not to have this degree of regulation.

Reviewing the ballot arguments was interesting as well.  Attacking the proposition because it would centralize rate setting authority in “one politician” is really a non-starter for me.  As noted, this already happens in connection with auto insurance and the sky has not fallen in.  The proponents’ ballot argument also notes that most of the money spent fighting Proposition 45 is contributed by the big health care insurers, not exactly a selling point as far as I’m concerned.  (I call this the “cui bono” test (“cui bono” means “who benefits” in Latin)).  The opponents also seem disingenuous arguing that this proposition is stripping power from any existing state “commissions” since those commissions do not have authority to cap health insurance rates. 

Proposition 46 is a contest where you have to decide who you dislike more, so-called “trial lawyers” or health care insurers.  Between them there is not a lot to like.  Let me explain.

Some years ago, the health care insurers were able to pass initiative legislation in California that imposed a $250,000 limit on damages based on “noneconomic damages” (think “pain and suffering”) sustained by victims of medical malpractice.  The idea back then was to control medical malpractice insurance rates so that doctors would remain in practice, based on a fear that juries would award outlandish sums for “pain and suffering” as opposed to “economic damages” in the form of out-of-pocket medical expenses, income loss, etc.  The “cap” on “noneconomic damages” has not been increased in years (since 1975) and therefore has not taken inflation into account.  If the ballot proposition were presented on this straightforward basis, there are some fair arguments going both ways.  The Legislative Analyst says that adjusting the $250,000 “cap” for inflation would raise the number to $1.1 million.

Now this matters in a way that is not obvious.  Personal injury lawyers, including those who specialize in suing doctors for medical malpractice, are almost always paid on a contingent fee basis.  So the higher the range of recoverable damages, the higher settlements result (most cases settle before trial), translating into higher fees for the lawyers who handle this type of case.  That is what is really going on here.

(Disclosure and disclaimer.  I do not handle medical malpractice cases and my friends in the law don’t, typically, do so either.  So I don’t have much of a dog in this race.)

But rather than make this a straightforward discussion of the pros and cons of raising the “cap”, to sweeten the deal and show that the “trial lawyers” think the voters are saps, the provision to raise the “cap” is accompanied by all sorts of draconian provisions that target a problem that I rather doubt is a serious one – substance abuse by doctors both personally and for patients through excessive prescription of controlled substances.  I wonder how my colleagues at the bar would feel about similar provisions being applied to them – it’s not exactly a secret that substance abuse is a problem for lawyers.

Again, I’m not sure who I dislike the most here so I decided to look at the ballot arguments.  Not much comfort there either.  The proponents’ argument is ad hominem (it uses the tragic story of an individual family to generalize the desirability of the ballot proposition) and I just love the statement that “Proposition 46 retains the current limit on attorneys’ fees in medical negligence cases.”  As you, my readers, now know, the percentages may remain the same but they will be calculated on higher settlements/verdicts.  So this is incredibly misleading.

In comparison, the “no” arguments make valid points, including the prior failure of the “trial lawyers” to ever ask the Legislature to step in and drug-test doctors and that the Legislature has rejected (according to them three times) efforts to raise the “cap” on “noneconomic” damages.  I’m less impressed with their point that the courts have rejected constitutional attacks on the underlying damage limitations (there are, to me, very serious questions about, if not the constitutionality, at least the fairness of capping jury verdicts).  But, in general, the “no” arguments are far more straightforward and honest in addressing the issues. (But the “no” arguments can be disingenuous, too (for example claiming that the passage of the proposition will “[q]uadruple . . . the limit on medical malpractice awards.”  Not true – this is just the “noneconomic damage” (“pain and suffering”) component of such awards.))

I recommend a “no” vote.  My trial lawyer colleagues are rather well compensated as it is and I’m not inclined to raise the “cap” here by holding the possibly legitimate expectations of victims of medical malpractice hostage to higher contingent fees.  And the disingenuous way the proposition has been packaged, frankly, is disgusting.

Next time around let’s have a straightforward discussion of the “cap” in the context of a fair way to compensate both victims of medical malpractice and the lawyers who represent them.  There are legitimate arguments in favor and against the type of damage limits contained in the current law and they cry out for comprehensive treatment and rational discussion.  But until that happens, I’m voting no.

Proposition 47 would reduce sentencing for certain types of drug possession and other (comparatively) minor public offenses from felonies to misdemeanors and would redirect any resulting savings to mental health and drug treatment programs, to schools and to crime victims.

I recommend a “yes” vote despite the obvious pandering to the voters regarding the use of any savings.  Warehousing someone in state prison is expensive and we all know how the prison system can often be the incubator for the creation of hardened criminals.  State prison time should therefore be reserved for those offenders who really deserve it and from whom the public requires heightened protection.  Plus the savings will be substantial even beyond the reduced state prison costs, for example lessening the load on the criminal court system as misdemeanor cases are typically lest costly to process through the system than felonies are.

Proposition 48 is a referendum on whether the State should permit the expansion of Indian “gaming” (that’s code for “gambling”) in Madera County.  The proposition seeks to ratify a deal by which gambling is permitted on the land of the “North Fork” tribe in exchange for prohibiting gambling on the land of the “Wiyot” tribe that is near a wildlife refuge, in exchange for a revenue sharing agreement, in addition to other equalizing-type or mitigation payments to another nearby tribe that operates a casino.  The issue before the voters is whether such a deal, approved by the Federal Government, the Legislature and the Governor, should go into effect.  (A referendum puts the actions of the Legislature before the people to be either approved or disapproved and referendums involve often expensive signature gathering campaigns to gather the requisite signatures to force a referendum.)

As explained by the Legislative Analyist, a portion of Indian “gaming” revenues is redirected to two special “funds.”  One pays out money to Indian tribes who do not operate large casinos.  The other, among other matters, funds programs for people with gambling problems and mitigates the effect of tribal casinos on local governments.  Obviously the bulk of the profits go to the tribe and the rationale for permitting Indian “gaming” is to enable members of the tribe to benefit and thereby compensate, to an extent, a group that has historically been the victim of discrimination and whose members have had problems obtaining gainful employment otherwise.

Indian “gaming” has been subject to special federal regulation for years, principally designed to prevent exploitation of the “tribes” by non Indian gambling interests.  There is an element of humbug here as some of the “tribes” may have all of 30 members and many of the “tribe” members may have only a fraction of actual Indian descent.  But under the U.S. Constitution, Indian tribes have quasi-sovereign status and therefore “gaming” can be permitted on “tribal” reservations even if prohibited elsewhere in the state in which the reservation is situated.  So one can look at as one of the weird aspects of having a federal (multi-government/multi-jurisdictional) system.

I took a look at the ballot arguments.  I’m impressed that Governor Brown is among the proponents as my respect for him is immense.  But I also was impressed by the “no” argument by Madera County Supervisor David Rogers.  Supervisor Rogers, quoting Senator Feinstein, points out that this expansion of Indian “gaming” breaks some prior commitments not to expand Indian gambling beyond original reservation land (the land here was only recently recognized as tribal land by the Federal Government) and is just designed to give this particular “tribe” a competitive advantage by situating its casino closer to population centers and freeway connections.

I recommend a “no” vote.  I am not a fan of legalized gambling in general.  The jobs that are often created are low paying and, as I’ve noted, some of the “tribes” here border on being jokes in terms of their substance.  Corruption can be an issue and even when it is not, gambling tends to demoralize the communities in which it is situated and gambling addiction is a serious problem.  Now there are forces at the periphery here both pro and con as this is all really about money.  So it’s no surprise that other “no” arguments come from other, rival, Indian “tribes” or financially interested parties.  But I think the broader principle is determinative here.  Legalized gambling is bad, period.

Proposition 49.  Guess what, there isn’t a “Proposition 49” as it was removed from the ballot by order of the state Supreme Court.  This was a proposition that would have put the state on record as opposing the U.S. Supreme Court’s decision in the much criticized Citizens United case, in which the U.S. Supreme Court accorded First Amendment protection to corporate political contributions and overturned years of federal law regulating such contributions.  (Readers interested in my analysis of Citizens United will find it via this link.)  The state Supreme Court ordered Proposition 49 off the ballot, apparently because the state Constitution does not make provision for advisory ballot propositions (a welcome change from the ridiculous “declarations of policy” that pollute the local San Francisco ballot.  See last week’s post (accessible via this link) for a discussion of that issue).  The back story is reported on the KQED website and you can read about it here.

And now for the state and local races.

Some things are easy.  The following are going to win in a walk and I won’t waste time or space explaining why.  I’m referring to Governor Brown, Lt. Governor Gavin Newsom, Attorney General Kamala Harris, Congresswoman Nancy Pelosi, San Francisco Assessor-Recorder Carmen Chu (who is running opposed), SF Public Defender Jeff Adachi (same), State Assembly, District 19 candidate Phil Ting (token opposition) and SF Supervisor (District 2) Mark Farrell (same).

I tend to vote party lines all things being equal so I recommend Democrats Alex Padilla for Secretary of State (replacing the termed-out and health challenged incumbent), Betty Yee for State Controller, John Chaing for Treasurer, Dave Jones for Insurance Commissioner, Chris Parker for the Board of Equalization (District 1), and Fiona Ma for the Board of Equalization (District 2).

I was surprised to see that the Chronicle has endorsed Marshall Tuck over incumbent Tom Torlakson for State Superintendent of Public Instruction.  Here’s a link to the recommendation.  The Chronicle argues that the incumbent has been too deferential to the state teachers unions.  In comparison, the Chronicle says that the challenger, Tuck, has both a proven track record and supports considering sutdents’ test scores as a factor in teaching evaluations, which the incumbent opposes and which, according to the Chronicle “cost the state federal dollars.”  While I was put off by some of the radio commercials I heard by the Tuck campaign while driving back from a court appearance (why I am supposed to be persuaded by childrens’ squeaky voices telling me what a great candidate Tuck is escapes me entirely), some shaking up of the status quo seems to be in order here.

On state judicial races, California follows a system where justices of the state Supreme Court and the Court of Appeal do not run in contested elections.  The idea is to make judicial races non-partisan (which, considering the increasing politicization of such races throughout the rest of the country strikes me as a very good idea).  Instead the voters vote whether to retain or not retain a given justice.  Not surprisingly, absent some major political controversy, the justices on the ballot generally win in a walk and there are no controversial justices on the ballot and none that I would recommend voting against in any event.  The newest justice, who has not yet faced the voters, is Justice Mariano-Florentine Cuellar.  He is stunningly qualified.  So is Justice Goodwin Liu.  Jerry Brown definitely knows how to pick judges.  So these are easy “yes” votes, in addition to long-standing incumbent Justice Kathryn Mickle Werdegar.  The Court of Appeal justices facing the voters all deserve a "yes" vote, as well.  Not a clunker in the lot.

On candidates to the local superior court (Department 20), Daniel Flores has the more impressive endorsements but I don’t know him or the other main contender, Carol Kingsley, professionally.  So I’m not taking a position here.  The Chronicle is endorsing Carol Kingsley, for what that is worth (here’s the link).

One interesting local race is Assembly District 17, pitting two termed-out San Francisco Supervisors against one another.  I’m referring to Board of Supervisors President David Chiu vs. David Campos.  I’m not a voter in District 17, but if I was, I would vote for David Chiu.  While both candidates share very close “progressive” political philosophies, Supervisor Chiu has a record as a consensus maker who can reach out and work with others; Supervisor Campos does not.  So this would have been an easy vote for me.  Don’t worry about the campaign mailers that depict each candidate as the modern day equivalent of the Devil Incarnate – this has been a year where the mailers have been even more over the top than usual. 

Almost all incumbents up for reelection to the Board of Supervisors are likely to win.  I have no strong feelings about the only race that appears to be even slightly contested, pitting incumbent Supervisor Malia Cohen in District 10 against challenger Tom Kelly.  Cohen seems to be doing a good job and I suppose I would vote for her if I lived in the district.  The SF Chronicle recommendations include some good summaries and you can access them here and here (the Chronicle agrees with me about Supervisor Cohen).

On the SF Board of Education, I don’t have much skin in the game these days so my interest level is not very high.  As far as I can tell, incumbent Hydra Mendoza is doing a good job.  The Chronicle endorsed both her and incumbent Emily Murase.  (Here’s a link to the general list of Chronicle endorsements, including the Board of Education.)

On the San Francisco Community College Board, my rule is simple.  Throw the bums out.  With the possible exception of John Rizzo (and Chris Jackson), the incumbents have been instrumental in creating the mess that is now San Francisco City College.  While discussion of City College deserves its own blog post (which maybe I’ll get around to some day), here are the Chronicle’s endorsements.

On the BART (“Bay Area Rapid Transit” agency) Board of Directors, I recommend Nick Josefowitz.  The incumbent, James Fang, is a well connected Republican do-nothing who recently pandered to the voters outrageously by joining the then striking BART workers’ picket line during the recent transit strike (like he had nothing to do with all this).  Fang has been on the BART board since 1990 and is as responsible as anyone for the problems plaguing the transit agency.  Time to clean house.

On the Oakland mayoral race, who to vote against is easier than deciding who to vote for.  Incumbent Mayor Jean Quan has been an unmitigated disaster.  While the Chronicle endorses businessperson Bryan Parker (here’s the link to the endorsement), I am frankly concerned that too much diffusion of anti-Quan votes will allow the incumbent to squeak back into office due to the impact of ranked-choice voting.  I therefore recommend voting for the anti-Quan candidates with the biggest name recognition and chance of success, followed by Parker.  So my thought would be to vote for Rebecca Kaplan as first choice, Libby Schaaf as second choice, and then Parker.  Anyone but Quan but focused on electing someone.  

The only other race I’m inclined to comment on is the election for U.S. Representative in District 17 (roughly Santa Clara County).  High tech darling Ro Khanna is running to unseat long-time Congressman Mike Honda.  I recommend voting for Honda.  Maybe it’s my age but it does not sit well with me that a conscientious, decent, hard working member of Congress is being attacked because he is somehow insufficiently in touch with the aspirations of Silicon Valley.  The subtext here is that Representative Honda is too old for the job.  But nothing in his record supports that conclusion and as far as I'm concerned, age can often confer a certain wisdom that the impetuousness of youth does not compensate for.  Ro Khanna, in the fullness of time, likely merits consideration for public office, but not now and not this race.

Dear readers, I’m weary.  So if you want to distill the above into a cheat sheet for your use, I’m going to leave that to you.  Back to the day job.

[Ed.:  I did my post on local ballot propositions (for San Francisco) last week (October 19) and you can go to that entry after you have finished looking at this week's offering.  You can also access it via this link.]

Regards.

Bob White