This morning I took a look at the Democratic and Republican parties endorsements, and found that I agree with Democrats on 6 out of 11 Propositions, and agree with Republicans on 6 out of 11 Propositions as well. I guess that makes me a moderate. Interestingly, Democrats and Republicans agree on three Propositions (2-Yes, 3-Neutral, and 7-Yes). I disagree with both parties in one of these cases, Proposition 3, where I oppose and both parties are neutral.
In general, bond issues have a lot more credibility when they go through the legislature like Propositions 1 and 2, and thus have been considered in the context of the full state budget. Voters should be highly skeptical of bond propositions that go directly to voters to seek public subsidies like Propositions 3 and 4. The enormous size of the water bond ($9 billion, 50% larger than the combined total of legislatively backed housing bonds) is a good example of the fiscal problems of special interest financed bond initiatives.
| Proposition | CBPR | Dem | Repub |
| 1 | Yes | Yes | No |
| 2 | Yes | Yes | Yes |
| 3 | No | Neutral | Neutral |
| 4 | No | Yes | No |
| 5 | No | No | Yes |
| 6 | No | No | Yes |
| 7 | Yes | Yes | Yes |
| 8 | No | Yes | No |
| 10 | No | Yes | No |
| 11 | Yes | No | Yes |
| 12 | Yes | Yes | No |
Proposition 1: Yes. Proposition
1 authorizes $4 billion in bonds for various affordable housing programs. The availability and affordability of housing
is a worsening problem across all of California, and is arguably the State’s
biggest economic challenge. The cost of
developing affordable housing is extremely high in California, more than double
some other states, and thus the funding in this bond will not deliver as much
housing as it should. While it is
tempting to vote no until stronger actions are taken to reduce costs, the need
for affordable housing is so great that we support the bonds.
Proposition 2: Yes. Proposition
2 authorizes $2 billion for housing programs for individuals with mental
illness. It passed the California Senate
unanimously, and the Assembly 72-1. This
bond deserves support, although we urge further actions to reduce the cost of
developing affordable housing in order to maximize the benefits of this
funding.
Proposition 3: No. Proposition 3 would authorize $8.9 billion in
bond borrowing for a variety of water related projects, and creates an
unjustified subsidy from the state’s greenhouse gas cap and trade program for 4
designated water agencies supporting the bond, including the Metropolitan Water
District and Westlands Water District.
While a portion of Proposition 3’s funding would go to needs that are worthy
of state public funding, the majority of Proposition 3 is terrible policy that
provides undeserved subsidies to special interests that represents California
water politics at its worst. Since 2014,
the legislature and Governor Brown have supported over $11 billion in new water
related bonds in 2 separate elections, including the $4 billion Proposition 64
in June 2018. Thus, most of Proposition
3 consists of poorly justified subsidies that couldn’t make it through a
legislature and Governor that have been very supportive of water spending. In addition to the enormous size and weak
justification of the Bond, the hidden inclusion of an energy subsidy for water
agencies that divert and pump water uphill from the environmentally troubled
Delta is reason enough to vote no on Proposition 3.
Proposition 4: No. Proposition
4 would authorize $1.5 billion in bonds for children’s hospitals and was placed
on the ballot by a petition funded by an association of children’s hospitals
that would receive the subsidies. While
children’s hospitals are valuable institutions in California, funding them
through state general obligation bonds is poor public policy.
Proposition 5: No.
Proposition 5 would expand the property tax limitations from Proposition
13 for California homeowners over the age of 55, by allowing them to transfer
the lower property tax bill of their current home to any other home they
purchase in the state. Proposition 5
would address one of the negative consequences of Proposition 13, inefficient
“house lock” that occurs since moving often triggers higher property tax bills
for homeowners because the new home is assessed at its current market
value. Proposition 5 eliminates this
perverse incentive, and thus would have a positive effect. Unfortunately, Proposition 5 solves a
Proposition 13 problem by further increasing the large tax burden inequities
embedded in Proposition 13.
Proposition 13 is inequitable because homeowners with
similarly valued homes pay vastly different property tax bills based on when
they purchased the home. It conveys
large tax benefits on older homeowners who bought their houses decades ago, as
well as those who had fortunate market timing and bought during the dips of
California’s roller coaster real estate cycles.
The Executive and Associate Director of CBPR both bought houses in 2010
near the bottom of the market, and would likely benefit handsomely from
Proposition 5 in a few years as we become eligible empty nesters. While we would personally benefit from
Proposition 5, we oppose it because it perpetuates and expands Proposition 13’s
inequities and distortion of California’s real estate markets and local public
finance. The “house lock” incentives
could be addressed by reforming Prop. 13 to reduce its inequities rather than
by expanding them.
Proposition 6. No. Proposition
6 would repeal gas and vehicle taxes passed by the legislature in 2017 to fund
transportation projects around the state.
While we don’t generally favor tax increases and understand that the
high cost of motor fuels imposes a heavy cost burden on many Californians,
these taxes are an appropriate and fair approach to funding much needed
transportation improvements. Fuel and
vehicle taxes are far more economically efficient than funding transportation
with general fund revenues (primarily income and sales taxes) as many
Proposition 6 advocates have argued.
Proposition 7. Yes. Proposition 7 would start a process that
could lead to year round daylight savings time (DST) with federal
approval. The proposition would potentially end twice
yearly time changes and their associated disturbance to sleep patterns. While
the energy saving benefits of DST are questionable, increasing evidence shows
the sleep disruption from the time changes may be associated with a range of
social costs ranging from pedestrian, motor vehicle, and workplace accidents to
workplace productivity losses and declines in student learning. The
proposition’s adoption of year-round DST would also facilitate potential
increased consumer impacts in shops and restaurants as well as outdoor
recreational activities because of the extra-daylight. Plus, if Tom were to recommend a no vote his
wife and son would combine their late-night and early morning preferences to
ensure he is sleep-deprived no matter what the time change.
Proposition 8. No. Proposition
8 would regulate prices charged by dialysis clinics based on the cost of
care. In general, attempts to limit
prices by law reduce economic efficiency, reduce the supply of goods and
services and can have many unintended consequences. Prop. 8 has been supported and funded by
labor unions seeking to unionize staff of dialysis clinics, and is opposed by
the owners of dialysis clinics, and many major medical professional organizations
in the State.
Proposition 9. “Three Californias” initiative was
removed from the ballot.
Proposition 10. No. Proposition
10 would greatly expand the ability of local governments to enact rent controls
on residential property. Economic theory
and decades of research are clear that rent control reduces the quality and
quantity of rental housing over time, leads to an inefficient allocation of
rental units by reducing mobility and encouraging overconsumption of housing by
those who are able to secure rent controlled apartments. California’s affordable housing crisis is
severe, and the desire for rent controls to create some immediate relief and
cost savings for some is understandable.
On the other hand, the many harms caused by rent controls accumulate
more slowly over time and the research is clear that it will do more harm than
good for California’s housing market in the long-run.
Proposition 11. Yes. Proposition
11 would allow private ambulance companies to require their employees remain on
call during meal and rest breaks. This
is current practice, but a recent ruling in a lawsuit requiring uninterrupted
breaks for private security guards, is expected to end the practice of on-call
breaks by ambulance companies.
Eliminating on-call breaks would significantly increase the cost of maintaining
current EMT service standards, requiring increased staffing that would raise
health insurance and local government costs.
Proposition 12. Yes. Proposition
12 would require cage-free housing for egg-laying hens by 2022, and increase
required space for breeding pigs and veal calfs. Interestingly, UC-Davis agricultural
economists have been silent on the economic effects of this bill after
receiving withering criticism and a lawsuit from the Humane Society over a
study of the costs of 2008’s Proposition 2, which increased space requirements
for hens but did not go as far as the current proposition to require cage free
production. Economic studies have shown
Prop. 2 raised egg prices in California by between 50 cents and $1 per
dozen. The cost of living index data we
collect for the Stockton and Sacramento areas finds that eggs are more than
twice the price seen in many other parts of the county, a much higher cost
differential than any other grocery product we survey. Proposition 12 will likely further increase
the cost of eggs in California and its costs will be disproportionately felt by
low-income households. However, the
California cost difference will likely decrease over time as major retailers
and restaurant chains around the country have announced plans to shift to cage
free eggs that will change production methods across the industry. Surprisingly, the most public opposition is
not from the agriculture industry or consumer activists, but animal welfare
activists who claim the Prop. 12 does not go far enough. While concerned about the cost to low-income
households, we recognize the legitimacy of growing animal welfare concerns and
that an industry shift is already underway.
Plus, if Jeff were to recommend a No vote, his wife and kids would have
him sleeping outside next to his backyard chicken coop.
