Seven initiatives to watch that threaten California prosperity

VotedVoters may face as many seven ballot measures damaging to California’s business and political climate in November. Any one of these measures should motivate millions in opposition spending by affected industries. More than a few are likely to qualify for the ballot.

Conventional wisdom teaches that gubernatorial elections deliver older and more conservative voters to the polls, which normally drives liberal and anti-business initiative entrepreneurs to aim their measures for presidential election years, like 2016 or 2020. But this formerly reliable rule has crumbled in the face of a low qualification threshold, interest group imperatives, and impatient wealthy donors. It’s open season on the deep pockets!

Increase taxes

In 2016, California voters extended top income tax rates (already the highest in the nation) through 2030, increased tobacco taxes by $2-a-pack, and imposed new taxes on marijuana use and production. Elsewhere, voters in hundreds of local jurisdictions raised sales, property and excise taxes for a variety of municipal or school services.

For certain unions and special interest groups, this isn’t enough. Two proposed ballot measures would impose multi-billion-dollar tax increases on businesses and upper income earners.

The United Healthcare Workers union has proposed a one-percent income tax surcharge on all income over $1 million, which would raise up to $2.5 billion annually for various health care programs. Wealthy taxpayers would pay a top rate of 14.3%, well above the highest income tax rate of any other state.

A coalition of liberal interest groups is circulating a split roll property tax proposal, requiring that nearly all commercial and industrial properties, except production agriculture, be assessed to full market value, and then reassessed every three years thereafter. Tax bills for business would increase by $10.5 billion a year.

Worsen housing crisis

California’s notorious housing shortage contributes to many social ills, including poverty, long commutes, air pollution, and flight of middle class jobs and job seekers. Tenant advocates, backed by the head of the Los Angeles AIDS Healthcare Foundation, are circulating a proposal that would exacerbate this shortage by repealing long-standing limitations on rent control.  Far from alleviating the housing shortage, this proposal would simply allow local politicians to benefit some existing renters at the expense of future renters and homeowners.

Regulate industries

A measure purporting to improve consumer control over personal internet privacy promises to be among the hardest fought and most expensive ballot battles. A San Francisco investor proposes requiring businesses to provide to consumers upon request a copy of any personal information it has accumulated and allows consumers to opt-out any or all collection of their personal information – even if not personally identifiable. This measure undermines widespread business models in the industry and likely reduce many services now available to internet users.

United Healthcare Workers is also soliciting signatures for a measure to establish price controls for privately-operated kidney dialysis treatment. Intended to create leverage on dialysis clinics to increase unionized staff, passage of the measure would increase overall costs by shifting dialysis treatments from clinics to more expensive venues like emergency rooms or hospitals.

Stall economic development

For more than two decades, excise taxes on California gasoline and diesel remained flat, contributing to the erosion of purchasing power of those tax revenues and creating a backlog of maintenance and operational improvements for roads and highways. In 2017, the Legislature and Governor agreed on a $5 billion annual boost in transportation revenues to repair roads and bridges and add capacity in some of the most congested corridors.

A San Diego politician has proposed repealing the excise tax increases and subject future increases to statewide voter approval, which would freeze in place hundreds of planned transportation improvements throughout California, without a plausible replacement revenue stream.

Disrupt state governance

A Silicon Valley millionaire is again attempting to qualify a measure to break apart California, this time into three separate states, centered on the Bay Area, Greater Los Angeles and San Diego/Orange County, with the rural area divided among the new states. The new states would obviously create new and unpredictable winners and losers – economically, socially and politically. Rather than working to knit the fabric of our state more tightly together, this proposal would tear it apart.

Initiative proponents will begin submitting petitions to counties in May for signature verification. It is not too soon to begin educating affected business and industry leaders about the consequences of these proposals.

resident of the California Foundation for Commerce and Education.

This article was originally published by Fox and Hounds Daily


  1. “A coalition of liberal interest groups is circulating a split roll property tax proposal, requiring that nearly all commercial and industrial properties, except production agriculture, be assessed to full market value”

    This petition was presented to me at a Wal*Mart as an initiative to help educate children. When questioned if it threatened Prop 13 he replied that it had nothing to do with Prop 13. I read out loud the portion that explains it does.

    I move that we mandate black box warnings on all petition presenters.

  2. Andrew Kessel says

    Sorry, SB1 is a an assault on commuters and the working poor and middle class, and had it had no public vote. Not all the money will go to roads and bridges…far from it. If Carl DeMaio gets this up for s vote in November…thank God.
    Plus, there are other state splits that are more viable than the one mentioned, such as the State of Jefferson, etc. Many want to break away from the stranglehold of the coastal areas that will continue keep a Democrat supermajority in power, regardless of the outcome. I can see the reasoning in that.

  3. A split in the state is the only way for any conservative to have a voice in what is happening with their tax dollars. California as it stands is going down fast. It is time to act and not just talk about a split.

  4. How did CA destroy itself?
    Slowly, and then Suddenly!

  5. I’m just glad I’m leaving. About 95% moved and the house goes on the market in the next few weeks. I’ve lived in Kalifornistan for 56 years, but I won’t be looking back.

  6. Will the rank-and-file Democrat voter approve all of these issues?

  7. Carl DeMaio formed a non-profit called Reform California. It is a signature gathering effort in order to repeal the gas taxes and also the Auto and truck registration fees and give the citizens an opportunity to defeat them at the ballot box in the future. It should have been this way to start with but the !$#&^#$%@ knew that would never pass. Anyone can sign a petition at Please do.

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