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Both sides' ads misleading on Prop. 26

The measure would require a two-thirds vote in the Legislature to impose fees on industry if the fees funded significantly more than regulating and serving those that pay them. It would also mandate two-thirds voter approval of such fees on the local level.

October 30, 2010|By Patrick McGreevy, Los Angeles Times

Reporting from Sacramento — It's one of the more complicated ballot measures that will be decided Tuesday, and the campaigns for and against it aren't making it any clearer for voters.

By one account, Proposition 26 is about stopping corrupt politicians from feathering their nests. By another, it is a scheme by oil companies to begin polluting at will. Neither is quite right.

The measure mostly addresses an obscure state policy under which lawmakers in Sacramento can impose fees on industries with a simple majority vote, as opposed to the two-thirds approval of the Legislature required to raise taxes or impose new ones. The existing rule is that the state must use the fee for a program related to the industry that pays it.

A fee on oil companies, for example, might go toward an oil spill cleanup fund.

The proposition would require a two-thirds vote of the Legislature if the fees were to pay for significantly more than regulating and serving those that pay them. It would also create a new rule requiring two-thirds voter approval of such fees on the local level.

Opponents have taken issue with an advertisement supporting the measure. It portrays politicians sitting around a table behind closed doors, scheming to quietly increase taxes by calling them fees.

"Politicians are using a loophole to fund big salaries and expense accounts with hidden taxes on food, beverages, gas and many services," a narrator intones as the actors celebrate their fee idea because it will fool voters.

But fees go into special funds that are separate from money used to pay elected officials' salaries and benefits. Proposition 26 would not change that.

Los Angeles County Supervisor Zev Yaroslavsky, an opponent of the measure, called the ad an effort by proponents "to throw as much waste product up against the wall as they can and hope some of it will stick."

The proposition's supporters deny that the ad is misleading, pointing to a state audit of sewer fees imposed by the city of Bell without voter approval.

The audit said that Bell's Sanitation and Sewerage System District overcharged ratepayers and that some of the money was improperly used to compensate city managers. But the audit concluded that existing state law made it improper for the sewer fees to be raised without local voter approval. Proposition 26 is, therefore, irrelevant to that example, opponents say.

Television spots against the measure also confuse matters, warning of billions of dollars in costs to taxpayers. But that's not a sure thing.

The state's nonpartisan legislative analyst concluded that Proposition 26, over time, "could reduce government revenues and spending statewide by up to billions of dollars annually compared with what otherwise would have occurred." Or it might not.

A man in one of the ads against the measure grouses to a woman: "Basically it forces taxpayers, not these special interests, to pay for oil spills and health hazards they cause." Also not necessarily true.

That position assumes the courts would interpret the proposition to require a two-thirds vote to increase fees on oil companies to boost the state's spill fund.

Maureen Gorsen, former general counsel for the California Environmental Protection Agency and a paid analyst for the pro-Proposition 26 campaign, said that if the oil company fees were used to regulate the industry, the measure would not affect them.

Opponents have produced reports to the contrary. But even if the measure would affect the spill fund, lawmakers would have the option of imposing a fee, with a two-thirds vote, on oil companies to replenish it. Proponents of the measure note that the oil spill fund was created with a near-unanimous vote of lawmakers.

Both campaigns are well funded, allowing a steady stream of ads and mail putting their own spins on the measure.

The Stop Hidden Taxes campaign committee has raised more than $15.6 million, including $3.7 million from oil company Chevron. The No on Prop. 26 committee has raised more than $5 million, including $500,000 from the California State Council of Service Employees.

patrick.mcgreevy@latimes.com

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