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Propocalypse: The Governance Crisis Provoked by Direct Democracy

This year, as Californians head to the polls, like every general election, voters will be asked to decide on a slew of questions instrumental to how the state will finance crucial projects and govern pressing issues. Ballot measures may seem like a way for voters to enact laws by popular consent and serve as a check against the state legislature, but many ballot measures have been thoroughly corrupted by special interests. And while it may be easy to pin the blame on the influx of money in politics, the whole story is much more complicated: a complex narrative of well-intentioned reforms, popular revolt and a takeover by special interests.

There are two types of measures that can be placed onto the ballot for direct vote: constitutional amendments, which directly change or add to the California constitution, and state statutes, which act in force as laws. These measures can either be legislatively-referred, where two-thirds of the state assembly and the state senate agree to refer a statute, amendment or bond over $300,000 for voter approval; or citizen-initiated, where ballot measures can qualify given that at least 5 percent of the number of voters in the last gubernatorial election sign a petition in support of the proposed measure (8 percent for constitutional amendments).

While California is not alone in its use of direct democracy — all 50 states use various forms of direct democracy at local levels of government, 23 other states use it at the statewide level and the country of Switzerland is governed by a direct democracy — California’s system is uniquely inflexible. California is the only state that does not allow the state legislature to directly alter laws created by initiative (unless specifically allowed in the original proposition); the only way to change laws passed by ballot initiatives is through another ballot initiative. This has led to devastating consequences for the state government: first, any issue passed by ballot initiative effectively takes governing power away from the legislature, creating a highly inefficient system prone to poorly executed laws that the legislature must work around rather than alter; second, an influx of money has inundated the process, where any person or industry with three to six million dollars can pay firms to gather the required number of signatures.

How did we get here? In a vastly oversimplified history, the Progressive Era swept in a wave of politicians eager to quash corruption who helped pass the citizen-initiated ballot initiative in 1911. And while there were some impactful ballot initiatives, from 1912–1969, on average, less than 2.5 propositions qualified each year.

In the late-1960s and 1970s, an easier signature gathering process in conjunction with a taxpayer revolt opened the floodgates for ballot initiative abuse. Barriers that some argued set too high a bar for citizen participation were not just lowered but obliterated: signatures requirements were lowered; ballot initiatives were now allowed in primary as well as general elections; signature gathering was permitted in shopping malls; and voters no longer needed to know their precinct number to sign a petition. Proposition 13, the controversial measure that capped property taxes, mandated a two-thirds legislative vote for any new tax, and sparked a wave of similar “tax revolts” across the country, proved that ballot initiatives could be a legitimate form of governance.

These events spawned an “initiative industrial complex” that slowly but surely began to dismantle the authority of the state legislature. Why spend money backing political candidates who may or may not enact legislation in your favor, and could be overturned in the next legislative session? Ballot measures, if passed, became untouchable by the state legislature, and could only be amended or repealed by future ballot measures. Indeed, with these relaxed qualification requirements and newfound proof of success in Proposition 13, citizen-initiated ballot initiatives blossomed: 24 ballot initiatives qualified in the 1970s, 44 in the 1980s, and 61 in the 1990s. From 1911–2012, only 33 percent of ballot measures were citizen-initiated, with the rest being introduced by the state legislature; but in the 1990s, 44 percent were citizen-initiated, and in the 2000s, this rose to 64 percent. Special interest groups took notice — in 1996, for the first time in state history, more money was spent on ballot initiative campaigns than state legislature campaigns. John Burton, former chairman of California Democrat Party, frustratingly expressed, “It was put in place to protect the people from the special interests; it’s now become a tool of the special interests to screw the people.”

The consequences have been devastating, and many of California’s contemporary problems can be tied back to the abuse of this system. Lack of funding for schools? Blame the aforementioned Proposition 13 and the subsequent chain of propositions it spawned that tied the hand of state and local officials, creating a messy budgeting system untouchable by legislators. A constant revolving door of state legislators that lack institutional knowledge? Blame Proposition 140, which instituted term limits and led to a drastic reduction in nonpartisan legislative staff. What about the looming pension crisis, perhaps the biggest financial issue the state will face in the upcoming decades? Proposition 162 limited the ability of legislators to control the state pension board. And don’t forget about criminal justice (or rather, the lack thereof): state spending on prisons tripled and the incarceration rate quintupled from 1970 to today, largely due to the 1994 Proposition 184, popularly known as the Three Strikes Law, which mandated a minimum 25-year sentence to criminals convicted of their third felony offense, even if non-violent (56 percent of “strikers” were in prison for nonviolent offenses in 2004).

Rather than being shut out of the process completely, state legislators have been forced to compromise with initiative-backers to maintain some semblance of control. In 1998, Netflix CEO Reed Hastings led and financed a ballot initiative campaign that would lift the cap on the number of charter schools — the state preemptively passed a bill doing exactly that so that it would not lose further ability to govern. More recently, the American Beverage Association spent over $7 million sponsoring a ballot initiative that would have required a two-thirds vote by the electorate to raise local taxes and a two-thirds vote by the state legislature to pass revenue-generating bills (the state already needs a two-thirds vote to raise taxes due to Proposition 13, this would have extended that supermajority to encompass nearly all other fees or charges). A compromise was made and the ballot initiative was withdrawn shortly after lawmakers reluctantly passed a bill that banned soda taxes until 2031, with Assemblyman Jim Wood (D-Santa Rosa) calling the ballot initiative campaign a form of “extortion” and Sen. Scott Wiener (D-San Francisco) equating the beverage industry’s use of the ballot initiative to a “nuclear weapon.” Even people with “good” intentions, or perhaps, consumer-oriented rather than industry-driven intentions, have used this process to take the legislature hostage. Alastair Mactaggart, a wealthy Bay Area real estate agent, spent $3.5 million collecting signatures to qualify a ballot initiative that mandated sweeping changes to internet consumer privacy laws, including the disclosure of information businesses collected from its users, and the prohibition of selling user data. The initiative was widely popular, gathering over 600,000 signatures, well over the 385,000 threshold, but was sharply criticized by the tech industry as “unworkable.” To ensure more flexibility, legislators instead worked out a compromise bill that appeased both Mactaggart and tech companies, who were unwilling to spend millions on a possible losing campaign.

Bond measures also present their own issues in the ballot initiative narrative. Proposition 3, an $8.9 billion bond for water infrastructure, has been derided as a “pay-to-play” initiative by Mathews, as the largest contributors to the campaign are mainly agricultural special interest groups in the Central Valley that would receive a bulk of the bond money. The state legislature attempted to appease their funding ambition by introducing a $4 billion water bond with Proposition 68 in the June primaries, which passed, but Proposition 3 remains on the ballot, potentially tripling the funding from $4 billion to a total of nearly $13 billion. The Sierra Club, a politically powerful environmental advocacy group, is one of the strongest opponents to Proposition 3, arguing that in addition to the pay-to-play aspect, the funding has little public oversight and could even fund projects detrimental to the environment. Even bonds that have wide-ranging support, such as Proposition 4, which authorizes $1.5 billion for children’s hospitals, have seen over $10 million spent by the same hospitals that will reap the bond money.

Propositions have also been used to propel political careers and movements. Former Govs. Reagan, Wilson and Schwarzenegger all sponsored propositions in conjunction with their gubernatorial campaigns. Venture capitalist Tim Draper, whose most recent ballot initiative to split California into three states was struck by the California Supreme Court, also spent $23 million sponsoring a school voucher ballot initiative in 2000 — its defeat ended any speculation surrounding his political aspirations. Others have been more successful, such as Rob Reiner, an actor from “All in the Family,” who sponsored a 1998 proposition that raised tobacco taxes and established a commission to fund early childhood development and smoking prevention programs. Not so coincidentally, Reiner was appointed to head the commission in 1999, resigning in 2006 amid accusations that he had improperly spent commission funds campaigning for another ballot initiative he was sponsoring to fund preschools.

The most recent iteration of the politicization of ballot initiatives has come in the form of Proposition 6, a repeal of the freshly-passed gas tax increase. Perhaps no one knows this better than former State Senator Josh Newman, who was recalled earlier this year, ostensibly for his support of the gas tax. Newman has pointed out that he was only one of the 81 total legislators that voted for the gas tax, but nonetheless, was targeted, “Since I was the Democrat who had most narrowly achieved victory in the last election cycle, in a district which that had been historically dependably red.” Indeed, Republicans have openly used Proposition 6 to drum up political support in hope that their success translates down-ballot; Republican gubernatorial candidate John Cox even incorporates Proposition 6 in his platform. In addition to repealing the gas tax, Joe Mathews, author of California Crackup, warns that a potentially more sinister effect would be the requirement that any future vehicular or fuel fee increases would have to be submitted as a ballot initiative for voter approval, further stripping power from the legislature.

Additionally, special interests have attempted to use ballot initiatives as a cover to reduce damages in expensive lawsuits. After paint companies were found liable for removing lead paint from over 200,000 homes, a feat estimated to cost around $400 million (the case was later settled for $60 million), three of the largest paint companies filed a ballot initiative that would have instead authorized $2 billion in bonds to remediate the issue and resolved any liability the paint companies had. After a contentious back-and-forth with the state — Attorney General Becerra titled the initiative “Eliminates Certain Liability for Lead-Paint Manufacturers” and the state legislature introduced legislation making it easier for people to sue paint companies for cleanup costs and to hold the companies legally liable — the initiative was withdrawn in exchange for legislators dropping their bills. Furthermore, Proposition 11, which would require EMTs and paramedics to remain on-call during breaks, would undercut a 2016 state Supreme Court ruling that mandated that work breaks must be completely off-duty. The American Medical Response, the largest ambulance firm in the country, has spent almost $22 million in support, a mere fraction of the potential $100 million class-action lawsuit they face if the proposition fails.

Ironically, different special interests have even ended up fighting against each other. In 2016, I wrote about Propositions 65 and 67, two dueling measures over the fate of the prohibition on single-use plastic bags. The main narrative framed the battle as David-esque environmentalists vs. the Goliath of well-funded plastic companies, who spent tens of millions of dollars in their campaigns. However, an oft-overlooked actor was grocery store industry, including Safeway and Ralphs, who spent hundreds of thousands of dollars supporting Proposition 67, likely due to the 10 cent per bag fee pocketed by grocery retailers. This year, Proposition 8, which seeks to limit dialysis clinic revenues represents an analogous battle, this time between the healthcare union SEIU-UHW and kidney dialysis companies. This ballot initiative has become the most expensive of all time, with a whopping $111 million spent opposing the measure, funded mainly by DaVita and Fresenius, two of the country’s largest kidney dialysis companies that rake in over $3 billion in profit from California alone. And while it may be easy to dismiss an industry accused of profiteering, fraud, and negligence, SEIU-UHW is no poster child. Critics accuse the union of weaponizing the process in order to make it easier for employees to unionize — SEIU-UHW has filed 4 statewide initiatives and 7 local initiatives just this year, and numerous other measures in 2012, 2014, and 2016. Proposition 10, which would lift the ban on rent control, also parallels this fight, with real estate companies spending $74 million to oppose the measure, while the AIDS Healthcare Foundation, a group notorious for spending millions on ballot measures that have little to do with AIDS, has spent over $22 million supporting the measure.

Ballot initiatives, while designed to promote direct citizen input, have been so thoroughly abused that the wealthy no longer need lobbyists to serve as the middleman to enact favorable legislation — they can simply write ballot initiatives that dictate their will unto a helpless government. Is there potential for relief? Without a fundamental shift in campaign finance law, the affluent will always possess a disproportionate influence in government. But California does have many ways to limit this abuse.

A problem this big has many potential avenues: the League of Women Voters compiled a list of 48 possible reforms proposed by various organizations. Some range from unrealistic (reinstalling the Fairness Doctrine) to impractically subjective (requiring initiatives to be written with arbitrary word limits and language that the “average” citizen could understand). Others would likely violate current campaign finance legal precedent (limiting campaign contributions and banning paid petition circulators) or even increase the costs of the ballot initiative process (increasing signature requirements).

There are, however, noteworthy solutions that would ameliorate many of the fundamental issues of citizen-initiated ballot measures. Procedurally-altering measures that would demand supermajority legislative votes should also have to pass by the same voter supermajority. To eliminate any further legislative-hostage situations, legislators should have a formal means of negotiation with initiative sponsors. This could mean allowing legislators to propose changes to ballot measures before an election, and if no compromise is reached, permitting legislators to place a legislatively-referred counterproposal next to the original ballot measure. Pay-for-play may always exist as long as money continues to influence political elections, but in order to deter people from uncritically voting for such measures, bonds should be self-financing, requiring some type of tax or fee increase to offset their borrowing. Ballot measures should also not be allowed to overturn court rulings and eliminate legal liabilities. Finally, and most importantly, ballot measures should not be put on a special pedestal, effectively untouchable by state lawmakers. This has severely hampered the state’s ability to govern and is a practice unique to California. State legislators should be allowed to amend laws passed through ballot initiatives. To prevent legislators from subverting the will of the people, other states require a supermajority vote to change ballot initiative laws or require some type of waiting period before a measure can be amended.

However, most of these procedural changes would themselves require ballot initiatives to manifest. In today’s political climate, in which 72 percent of Californians generally support the ballot initiative process and 60 percent believe ballot initiatives lead to better decisions than legislation from elected officials, reform may only seem like a pipe dream. But 78 percent of Californians do support a compromise process between the legislature and initiative sponsors, and 38 percent want major reforms to the entire system. This is not to say that ballot initiatives have been a total failure, as they have served as an important check on the state legislature in some matters: Proposition 11 in 2008 and Proposition 20 in 2010 eliminated party-led gerrymandering by assigning redistricting efforts to a nonpartisan committee rather than state legislators. But former State Sen. Newman perhaps said it best: “If the purpose of elections is to hire civic-minded men and women to represent our interests in Sacramento, why are we being asked to do their work for them at the ballot booth in the form of a seemingly never-ending flow of confusing and often misleading propositions?” It is unclear whether such a reform-minded proposition will ever be put on the ballot. One thing is clear: unless Californians wise up to the inefficiencies of the initiative system, special interests will continue to govern at the expense of the legislators we elect to represent us.

Featured Image Source: Fountain Hills Chamber of Commerce

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