What A Lucky “13” On The Primary Ballot Says About California Elections

Thursday, February 27, 2020
Image credit: 

Of all the characters involved in next Tuesday’s California primary—the two billionaires whose impossible-to-miss advertising budgets are making it a banner year for local television; the “democratic socialist” who may make the Golden State his biggest delegate haul on “Super Tuesday”—my eye is on Charles Lightfoot III.

Lightfoot’s name is not the California ballot, nor is he stumping for a candidate. But his presence in the California primary—and the cause he espouses—says oodles about the state of Golden State politics.

What Lightfoot is, is an Oakland firefighter. As such, that qualifies him to star in a television ad on behalf of Proposition 13, which proposes $15 billion in long-term “general obligation” bonds for California schools and public facilities (“g.o. bonds,” in Sacramento parlance, are paid off from the state’s General Fund, which in turn is largely supported by taxpayer revenue—California’s constitution requiring that bond issues of $300,000 or more be referred to popular votes for approval or rejection).

About 2020’s Prop 13: if you’re confusing this with the fabled 1978 ballot proposition that placed a limit on taxation of residential and commercial properties, you’re not alone.

But before you play the conspiracy card, there’s a ready explanation.

California’s secretary of state assigns ballot measure numbers before each vote. The last time Californians went to the polls in a statewide election, in November 2018, 11 initiatives were on the ballot (from 1996 through 2016, an average of 18 statewide measures appeared on the California ballot in even-numbered years; that includes 18 in 2016). Numerically, those 2018 ballot measures were designated as Propositions 1–12 (Proposition 9, which aimed to divide California into three separate states, was removed from the ballot by order of the state supreme court).

As “13” is the next number sequentially—and the bond is the only measure on the March ballot—it received what likely will turn out to be a lucky designation.

But why “lucky”?

For two reasons, the first being that some voters—conservatives, in particular—might mistake the bond for the aforementioned tax-limiting initiative. And, yes, some conservatives will be voting in California next Tuesday (President Trump is on the Republican version of the primary ballot, along with six rivals).

The other reason why this year’s Proposition 13 isn’t jinxed: because Californians love to vote for bonds—and seem to pay little heed to the consequences of taking on debt.

Dating back to 1986, California voters have approved general obligation bond measures totaling nearly $168 billion (California’s state budget for the fiscal year ending in the summer of 2017 was $167 billion).

However, as far as general obligation bonds are concerned, what Californians see in front of them on the ballot isn’t what they end up paying off. Bonds require lenders, who are repaid with interest (typically, 5% a year) over the course of several decades. The state typically pays back bond investors over a three-decade period. Assuming that 5% interest rate, the cost of paying off a bond over a 30-year period is closer to $2 for every dollar advertised ($1 for repaying the amount borrowed, plus close to another dollar in interest).

According to this 2019 report by the state’s Legislative Analyst’s Office, California currently has about $84 billion in outstanding General Fund–supported debt; annual debt payments total about $6 billion—that’s double UC Berkeley’s operating budget (the flagship of the UC system, by the way, also dealing with a structural deficit). In addition, voters and the state legislature have approved about $42 billion of General Fund–supported bonds that have not yet been sold.

Moreover, California has racked up another $250 billion of non-voter-approved obligations that cost the state’s General Fund some $11 billion a year, according to the watchdog Govern for California. That includes nearly $101 billion in teacher pensions, nearly $85.6 billion for state retiree health coverage, another $59.7 billion in state employee pensions, plus nearly $3.3 billion for judges’ pensions.

So why do Californians tolerate the idea of paying off interest-fueled debt?

In part, it’s because the California electorate isn’t always plugged in to the details of state politics and policy. An example of this, Gov. Gavin Newsom delivering his State of the State Address last week, late on a Wednesday morning. Why relegate the big speech to a time slot that guarantees little live television coverage? Because the governor and his communications team understand that the average Californian isn’t waiting, with bated breath, for the latest from Sacramento.

But another reason why general obligation bonds are, of late, an easy sell: good luck finding a prominent opposing view.

To its credit, California’s Official Voter Information Guide devotes 10 pages to the pros and cons of the Proposition 13 school bond. The “pros” are up front and hard to miss—more money for school modernization and construction, plus plenty of dollars for charter schools, career technical education, public universities, and community colleges.

The “cons” aren’t as glaring—besides arguments against the ballot measure, a small box pointing out that the specifics of Proposition 13 are $15 billion debt in principal and $11 billion debt in interest, an annual cost of $740 million over a likely 35-year payment period.

Measures the likes of Proposition 13 might face a tougher challenge if Californians took the time to read their voting guides. Or if they took the time to peruse written arguments like this one, which points out the school bond “is a grab-bag of goodies for the well-connected” (for construction trade unions and the contractors that employ them, union-friendly Democrats in the state legislature made sure that Proposition 13 requires the state to give funding priority to projects in districts that sign a labor project agreement).

However, that lengthy written argument against Proposition 13 doesn’t stand a chance in the court of public opinion—in California, the power of television advertising to sway voters.

And that takes us back to Charles Lightfoot III, the bond-advocating firefighter.

The 30-second “First Responder” spot in which he stars doesn’t pull any punches: if approved, Lightfoot claims, the bond will better protect schoolkids come the time of California’s next natural disaster; pipe repairs will lead to cleaner drinking water; asbestos removal will make for healthier schools.

And this added sales pitch, for foes of centralized government: all funds will go to local schools, not Sacramento.

By now, this is a familiar play in California politics. Be it selling or defeating a ballot initiative, turn to society’s “white hats” (teachers, nurses and doctors, first responders, law enforcement) to make the sell to voters.

It’s a movie that’s been playing in California since the special election of November 2005, when special interests aligned against then governor Arnold Schwarzenegger’s reform agenda. Public employees unions, feeling especially threatened by a ballot measure that would have required workers’ permission to withhold dues for political purposes (that year’s Proposition 75), trotted out this ad featuring a nurse, a teacher, and a firefighter all denouncing the celebrity-governor (“he’s not fighting special interests; he’s fighting us”).

The Lightfoot “First Responder” ad first aired almost a month ago (a new ad featuring Gov. Newsom is currently making the rounds). Not counting the barrage of ads from presidential hopefuls Michael Bloomberg and Tom Steyer, the two billionaires in the Democratic field, plus what other local candidates have happened to buy air time, the bond hasn’t been drowned out by other noise on the March ballot.

Add the dynamic of a Democratic-tilted turnout next Tuesday, and a Proposition 13 win is all but guaranteed (Californians have voted on four bonds in the last three election cycles, with each measure receiving at least 55% of the statewide tally), meaning more money for California schools—and for friends of the Sacramento establishment.

Even if Californians will be footing the bill for decades to come.