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The $46-Billion Questions Await State's Voters

Ballot measures would release a torrent of spending on California's infrastructure but test the public's stomach for more debt and taxes.

September 08, 2006|Michael Finnegan | Times Staff Writer

They argue that the surge in California's population will otherwise overwhelm the state's infrastructure -- a line of attack that they believe will counter concerns about the immense cost.

"We've got a good case to make," said Paul Hefner, a spokesman for Let's Rebuild California, the committee promoting the four bond measures.

Opponents have not mounted a substantial campaign, but ballot measure strategists say it will still take a major push to pass such a giant bond package.

"Anybody who thinks that's going to be a slam dunk, I think they're going to be surprised," said Rick Claussen, a strategist who led the campaign that defeated Proposition 82, filmmaker Rob Reiner's June ballot measure to raise income taxes on the wealthy by $2.4 billion a year to pay for universal preschool.

The June election did not portend well for the November bond proposals. In addition to the preschool proposal, which lost 61% to 39%, voters rejected, by 53% to 47%, Proposition 81, a $600-million library construction bond that had no organized opposition.

So far, with no ads airing on the bonds, the oil and tobacco industries threatened by other ballot measures have dominated television advertising.

"The targeted industries are not going to take it lying down," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn., which opposes seven of the ballot measures and is neutral on others.

Chevron Corp., Aera Energy LLP, Occidental Oil and Gas Corp. and other energy companies have spent millions on ads against Proposition 87, which would tax California oil drillers up to $485 million a year to establish a $4-billion alternative energy research program.

Voters can expect to be confused: Industry ads say the measure would curb California oil production and lead to increased importing of more expensive foreign oil. The extra cost "will lawfully be passed on to the rest of us in higher gas prices," one ad says.

Proponents, however, point out that the measure would bar oil companies from passing the cost of the tax to consumers through higher pump prices.

Hollywood film mogul Stephen L. Bing, Silicon Valley venture capitalist Vinod Khosla and other supporters are spending millions on spots promoting the measure, which they say would cut air pollution and produce cheaper energy.

"The voters will hear both sides loud and clear," said Steve Smith, a Yes on 87 strategist.

Meanwhile, Philip Morris USA Inc., R.J. Reynolds Tobacco Co. and allies are spending millions to kill Proposition 86. It would increase tobacco taxes by $2.1 billion a year to raise money for hospital emergency services, nursing education, health insurance for children, cancer research and other medical programs. The state's 87-cent-a-pack tax on cigarettes would rise to $3.47.

The tobacco industry portrays the initiative as a money grab by hospitals and an invitation to collusion in fixing prices for medical care. Hospitals and medical groups have plowed millions into the Yes on 86 campaign but so far have spent minimally on their first ad, which urges voters to "stand up to big tobacco" to improve public health.

Claussen, a No on 86 strategist, said the campaigns to defeat tax proposals in November would benefit from a rise in voter skepticism of ballot measures. Labor unions heightened that public reluctance last year, he said, by urging voters to examine a "hidden agenda" behind Schwarzenegger's special election initiatives, all of which went on to lose.

"You're going to see a lot more scrutiny from voters," Claussen said. "People start to put two and two together and say, 'Gee, this money's got to come from somewhere.' "

michael.finnegan@latimes.com

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(BEGIN TEXT OF INFOBOX)

Money measures

The 13 proposals on November's ballot have huge fiscal implications for California and its residents:

Proposition 1A: Would protect the state gas tax from being used for anything but transportation improvements, except in the case of severe economic hardship. Requires loans of sales tax revenues to be repaid within three years.

Proposition 1B: A $19.9-billion bond issue for transportation and safety projects. It would cost about $38.9 billion over 30 years, counting interest.

Proposition 1C: A $2.8-billion bond issue to provide housing and emergency shelters. The bond would cost an average of $204 million per year over its 30-year life.

Proposition 1D: A $10.4-billion bond to relieve public school crowding and repair old schools. The bond would cost the state $20.3 billion in principal and interest.

Proposition 1E: A $4.1-billion bond to rebuild and repair flood control structures. It would cost $8 billion over 30 years.

Proposition 83: Increases penalties for violent and habitual sex offenders. Net costs would be up to $200 million annually within 10 years, and potentially several hundred million dollars more in construction costs.

Proposition 84: A $5.4-billion bond to pay for water, flood control, park and conservation projects. It would cost $10.5 billion over 30 years to finance the bond.

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