Tuesday, October 31, 2006

No on Propositions

As I said in an earlier post, California has an initiative process. It sounds like a great idea... any citizen, if he or she is able to get the requisite number of signatures on a petition, can get an initiative placed on the ballot. If the idea has merit and enough people vote for it. It becomes law. Democracy at it's finest, right?

Wrong. Instead, it has become an exercise in he who has the most money gets over. Huge amounts of money is being spent on the initiative process, mostly on 30 second television ads that spin things. Few people have the time or energy to think through long term implications of the initiatives (often including those who proposed them in the first place) and so many people vote according to 7 word tag lines that they've heard over and over again on television. It is a terrible way to make law. Writing laws should be a careful deliberative process without the influence of special interest groups. Instead we have a situation like prop 87 this year which is about a new tax on gasoline extracted in California - which has much lower extraction costs than other states. The oil industry has spent over $52 million into defeating the initiative. A bit more than $45 million has come from the other side for a total of $98 million spent on pushing this one initiative. That is more than is being spent on the governor's race.

Last year prop 73, a parental notification law, was defeated so this year we have prop 85... another parental notification law. And the street talk is that if this proposition is defeated, guess what we'll have next year? Wouldn't those millions of dollars be better spent on a program that reduces teen pregnancy?

A bunch of years ago we had prop 13, a property tax boon for those who owned property and a curse for those who didn't. Essentially your property tax is based on the purchase price of the property and doesn't change significantly as the property increases in value. Again, it sounds great. Allows elderly folk on fixed incomes to keep their homes... etc. But what are the implications? You can have two homes next to one another, built by the same contractor... indeed, they are exactly the same house and one owner pays $2000 a year in taxes while the neighbor pays $12000. The first paid $200,000 for the house and the second bought it last week for $1.2 million (the median price in Santa Barbara). People don't sell their homes because moving causes a huge jump in taxes. So... that lowers the stock available to purchase which artificially increases the prices. And if your family is growing,rather than move and take the tax hit, you enlarge your home (which does bring a tax increase albeit a much smaller one), removing the smaller housing stock from the market and again making it more difficult for people to get into the market. You can figure out what the tax structure did to the infrastructure and to the schools... I'm guessing that when this prop passed, very few people thought about those implications. And now, it would be impossible to change because those folk with houses for a length of time don't want to lose their tax advantage.

So, I'd like to see an initiative on the ballot next year... an initiative to do away with the initiative process. I can see the special interests coming out on that one.

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