Legislative Committee
Taxation Committee
Propositions 1A, 1B, 1C, 1D, 1E and 1F qualified for the ballot after the
January 2009 Board of Directors Meeting. In March, upon recommendation of
the Leadership teams of the Taxation and Legislative Committees, C.A.R.'s
Leadership team adopted a “NOT REAL ESTATE RELATED” position on all of the
May 19, 2009 Special Election ballot measures.
Proposition 1A, 1B, 1C, 1D and 1E were not approved by the electorate
during the May 19 Special Election. Proposition 1F, however, was approved
by the voters.
PROPOSITION 1A: State Budget. Changes California Budget Process.
Limits State Spending. Increases "Rainy Day" Budget Stabilization
Fund.
Summary: Under this proposition, “unanticipated” revenues (i.e.,
revenues that exceeded the amount expected based on revenues received by
the state over the past ten years) would have been directed to meet the
funding obligations under the state constitution for K-14 education, fill
the existing budget reserve to its target (which would have been increased
from 5% to 12.5% of state revenues) and to pay off any budgetary borrowing.
Only after these payments were made, could “unanticipated” revenues have
been used for other purposes. In addition, the tax increases included in
the February 2009 budget package would have been extended as follows: the
1% sales tax increase would have been extended one year through 2011-12,
the Vehicle License Fee increase from 0.65% to 1.15% would have been
extended two years through 2012-13, and the Personal Income Tax increase of
0.25% would have been extended two years through the 2012 tax year.
Pro: Proponents argue that Proposition 1A will stop out of
control spending and provide meaningful, long-term reform that will help
stabilize future state spending. They further argue that the creation of an
enhanced rainy day fund will allow the state save during good times so
money will be available during the bad.
Con: Opponents argue that Proposition 1A is comprised of
complex formulas and fine print that will invite unintended consequences
and behind the scenes manipulation. Instead of making our budget process
more transparent and accountable, Proposition 1A will do the exact opposite
of what is purported.
Note: In 1979, C.A.R.'s Board of Directors adopted a "FOR"
position on Proposition 4 (Gann Spending Limit), which was approved by the
voters. The Gann Spending Limit amended the state constitution, and limited
the amount of tax revenues the state can spend each year; however, the
limit has been well above the state’s level of spending and has not been a
factor in budgeting.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
PROPOSITION 1B: Education Funding. Payment
Plan.
Summary: Proposition 1B would have provided school and
community college districts with supplemental education payments totaling
$9.3 billion in lieu of the amounts that might have been required for the
fiscal years of 2007-2008 and 2008-2009 under Proposition 98. These
payments would have been paid over seven years, beginning with the fiscal
year 2011-2012. Proposition 1B would have provided greater discretion to
the Legislature and Governor regarding how these payments would have been
distributed between K-12 education and community colleges. Up to $200
million of the funds appropriated during the fiscal year 2011-2012 could
have been used for school district equalization funding. Proposition 1B was
linked to the passage of Proposition 1A.
Pro: Proponents argue that because education spending has
been cut by over $12 billion, Proposition 1B is necessary in order to set
up a repayment plan that will ensure schools and community colleges are
paid back as economic conditions improve.
Con: Opponents did not submit an argument against
Proposition 1B to the Secretary of State.
NOTE: C.A.R.'s Board of Directors, at its October 1988
meetings, adopted an "AGAINST" position on Proposition 98, which was
approved by the voters. Proposition 98 established a minimum level of
funding for school and community college districts, which is achieved using
both the state General Fund and local property tax revenues.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
PROPOSITION 1C: Lottery Modernization Act.
PROPOSITION NUMBER PENDING: California State Lottery. Legislative
Constitutional Amendment.
Summary: Proposition 1C was a compilation of 3 measures that were
placed on the ballot during the 2007-2008 Legislative Session. SCA 12
(Perata) would have authorized the Legislature to sell the future revenues
of the California State Lottery to a designated a third-party that would
have been authorized, by the Legislature, to carry out the securitization
and to issue the debt obligations. Beginning with the 2009-10 fiscal year,
AB 1654 (Committee on Budget) would have made technical and statutory
changes to the California State Lottery by authorizing the lottery to
modernize its operations in order to improve its financial performance.
Instead of capping payouts at 50%, at least 50% of total annual revenues
would have been returned to the public as prizes. Revenues allocated to
public education would have increased from 34% to 37%, while revenues for
administrative expenses would have been reduced from 16% to 13%. The
measure would have established both the Lottery Assets Fund and the Debt
Retirement Fund within the State Treasury. Net revenues remaining after
prize payouts, administrative expenses, gambling programs, and revenue
securitization would have been transferred to the Debt Retirement Fund. AB
1741 (Committee on Budget), while not included in Proposition 1C, would
have taken affect if Proposition 1C was approved by the voters. This bill
would have authorized the securitization of lottery revenues and permitted
the Director of Finance to designate a portion of lottery revenue assets
for securitization and sale in order to generate additional funds that
would have been deposited in the Debt Retirement Fund. The measure would
have permitted the Infrastructure and Economic Development Bank to sell the
lottery revenue assets to a special purpose trust, which would have
included 6 directors consisting of 5 State Public Works Board members and
the Director of Finance, which would have issued the bonds.
Pro: Proponents argue that Proposition 1C will immediately
raise $5 billion in new revenues without increasing taxes, while protecting
funding levels for schools currently provided by the lottery.
Con: Opponents argue that Proposition 1C should be left as
the voters originally intended it to be because they had a clear
understanding of how the program would function when it was approved 25
years ago. Voters knowingly placed restrictions on the operation of the
lottery in order to limit its size and scope.
NOTE: C.A.R.'s Board of Directors, at its January 2009
meetings, adopted a "NOT REAL ESTATE RELATED" position on all of the
measures encompassed in Proposition 1C.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
PROPOSITION 1D: Protects Children's Services Funding. Helps Balance
State Budget.
Summary: Proposition 1D would have temporarily redirect a
significant portion of Proposition 10 funds to offset existing state
General Fund costs. The proposition would have amended the California
Children and Families Act to temporarily allow Proposition 10 revenues and
unspent reserves to be used to fund other state health and human services
programs (e.g. foster care, health coverage, Medi-Cal, Healthy Families,
state preschool, and child care) for children up to the age of five. The
proposition would have made permanent changes by increasing the State
Children and Families Commission general program fund from 2% to 6% by
deleting of a 6% mass media allocation, required the local county
commissions to submit annual audits and expenditure reports to the county
board of supervisors, and permitted a county controller to borrow local
commission funds for the county's general fund.
Pro: Proponents argue that Proposition 1D is a
common-sense solution to California's budget crisis that will protect
important services for children under the age of 5.
Con: Opponents argue that Proposition 1D will cut
effective preschool and early education programs that are key to children's
long-term success in school and eliminates proven anti-smoking programs
that keep families healthy and lower healthcare costs that burden every
taxpayer.
NOTE: C.A.R.'s Board of Directors, at its October 1998
meetings, adopted a "NOT REAL ESTATE RELATED" position on Proposition 10,
which was approved by the voters. Proposition 10 created a state and county
commission under the California Children and Families Act that implements
early childhood development and smoking prevention programs. The measure
also imposed an additional excise tax on cigarettes of 50 cents per pack,
and increased the tax on other tobacco products.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
PROPOSITION 1E: Mental Health Services Funding. Temporary.
Reallocation. Helps Balance State Budget.
Summary: Proposition 1E would have allowed for the temporary
redirection of some Proposition 63 funds to support the Early and Periodic
Screening, Diagnosis and Treatment Program for mental health services.
Proposition 1E would have redirected $226.7 million in 2009‑10, and between
$226.7 million and $234 million in 2010‑11 from programs funded though
Proposition 63. These revenues would have been used to offset state costs
that would otherwise be borne by the General Fund.
Pro: Proponents argue that while Proposition 1E will
redirect funds from the Mental Health Services Act to the state's Early and
Periodic, Screening, Diagnosis and Treatment program for the next two
years, which provides mental health services to children, the measure will
not reduce the level of Mental Health Services Act services currently being
provided.
Con: Opponents to Proposition 1E argue that the amount of
money this measure transfers to the state general fund is a small fraction
of the state budget. The Mental Health Services Act programs created under
Proposition 63 are saving the state valuable resources by reducing pressure
on our overburdened jails and prisons and should not have its resources
depleted.
NOTE: C.A.R.'s Board of Directors, at its October 2004
meetings, adopted a "NOT REAL ESTATE RELATED" position on Proposition 63,
which was approved by the voters. Proposition 63 provides state funding for
certain new or expanded mental health programs through a personal income
tax surcharge of 1 percent on the portion of a taxpayer’s taxable income in
excess of $1 million.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
PROPOSITION 1F: Elected Officials' Salaries. Prevents Pay Increases
During Budget Deficit Year.
Summary: This proposition amends the Constitution to prevent the
California Citizens Compensation Commission from approving increases in the
annual salary of elected state officials when the Special Fund for Economic
Uncertainties (created in Proposition 1A) is expected to end the year with
a negative amount equal to or greater then one percent of estimated General
Fund revenues.
Pro: Proponents argue that by stopping legislative pay
raises during state budget deficits, the state can save millions of dollars
and bring accountability to the legislature.
Con: Opponents to Proposition 1F argue that it will have
no practical effect and only gives voters the illusion of having made a
difference.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
NOTE: C.A.R.'s Board of Directors, at its March 1990
meetings, adopted a “NO POSITION” or “NOT REAL ESTATE RELATED” on
Proposition 112, which was approved by the voters. Proposition 112 created
the California Citizens Commission that is charged with establishing the
annual salary and benefits for state elected officials. [Note: Until 1992
“NO POSIITON” was utilized to convey that C.A.R. had no position. In 1992,
C.A.R. adopted the “NOT REAL ESTATE RELATED” position to avoid any
perception that “NO POSITION” was an “AGAINST” position.]
June 8, 2010, Primary Election Ballot
Proposition 13: Property Tax: New Construction Exclusion: Seismic
Retrofitting. Legislative Constitutional Amendment.
Summary: This measure was placed on the ballot by the California
State Legislature in 2008. Originally identified as SCA 4 (Ashburn), this
proposition proposes to provide a property tax reassessment exclusion for
all seismic retrofitting components made to an existing structure, and
deletes the 15-year time limit for exclusions under Proposition 23. Put
simply, property owners would use the broader exclusion provided by
Proposition 127, which was approved by the voters in 1990, instead of the
more limited exclusion provided under Proposition 23, which was approved by
the voters in 1984, for any new seismic safety improvements.
Pro: Proponents argue that the proposition will promote
equity among taxpayers who reconstruct or improve structures to comply with
local ordinances relating to seismic safety. Excluding seismic retrofits
from property tax valuation will provide a financial incentive for property
owners to upgrade their unreinforced masonry structures for seismic safety
and will eliminate the disparate treatment between seismic safety
improvements made under Proposition 23 vs. Proposition 127. Additionally,
proponents point out that buildings upgraded under Proposition 23 have
rarely been reassessed after the 15-year period expires.
Con: Opposition to the measure has yet to register with
the Secretary of State.
NOTE: C.A.R.'s Board of Directors, at its January 2009
meetings, adopted a "FOR" position on this proposition.
Position: _X_ FOR ___AGAINST ___NEUTRAL __NOT REAL ESTATE RELATED
PROPOSITION NUMBER PENDING: Political Reform Act of 1974:
California Fair Elections Act of 2008. Legislative Statutory
Amendment.
Summary: Placed on the ballot by AB 583 (Hancock) in 2008, this
measure proposes to create a pilot project of public financing for
candidates for Secretary of State during the 2014 and 2018 elections. The
Fair Political Practices Commission would primarily be responsible for the
administration of the Fair Elections Fund, which will maintain all public
campaign funds. Candidates opting to participate in public campaign
financing will not be permitted to collect private contributions, except
from the candidate's political party. Eligible candidates for Secretary of
State may only obtain public funds if they collect 7,500 five dollar
contributions from registered voters during the exploratory period that,
after verification by the county recorder, will be deposited into the Fair
Elections Fund. Prior to the end of a candidate's qualifying period, which
concludes 90 days before the primary elections, candidates for Secretary of
State would be permitted to accept "seed money" contributions that may not
exceed $100 per donor, with a maximum aggregate total of $75,000. Seed
money contributions may only be spent prior to the close of the qualifying,
or exploratory, period at which point all remaining funds would be
transferred into the Fair Elections Fund. The Fair Elections Fund would
receive additional funding from voluntary contributions made through
individual tax returns and from a $350 annual fee placed on lobbyists,
lobbying firms, and lobbyist employers (adjusted biennially based upon the
Consumer Price Index). The fund could also receive funding from the
Legislature and any source of revenue associated with the General Fund.
Candidates accepting public financing will receive 1 million dollars for
the primary election, 1.3 million dollars for the general election, and
will be required to participate in one public debate during a primary
election and two during a general election.
Pro: Proponents argue that public financing will reduce
the perception of special interest influence on candidates, provide greater
candidate diversity and permit candidates to focus on policy issues instead
of fundraising.
Con: Opposition to the measure has yet to register with
the Secretary of State.
NOTE: C.A.R.'s Board of Directors, at its January 2009
meetings, adopted a "NOT REAL ESTATE RELATED" position on this
proposition.
Position: ___ FOR ___AGAINST ___NEUTRAL _X_NOT REAL ESTATE RELATED
