Friday, February 26, 2010

Calif Prop 16, Taxpayer Right to Vote Act, smells funny

An ad showed up on my gmail account that was intriguing: "Yes on Proposition 16. - www.taxpayersrighttovote.com - Protect Taxpayers Right to Vote. Voting is Our Right!" Since I believe in the right to vote I was curious what this is about. For example why is "Tax Payer" connected with concern over the "Right to Vote"? In America any citizen is eligible to vote regardless of whether they're paying taxes or not (except -- in many states convicted felons are not allowed to vote even after they've served their time). In any case what I found is even more curious and an example of corporate faux grass roots activism.

The website is a simple one pager with this plea:

Help protect your right to vote. Right now local governments in California can spend public money or incur public debt to take over private electric businesses without letting local voters have the final say in the decision. In tough economic times like these, voters deserve the right to have the final say about how our money is spent. Join us to protect the Taxpayers Right to Vote – Yes on 16.

Uh.. "take over private electric businesses" is very curious especially connected to "letting local voters have a final say". Reading further into the web site I find that the issue is that governments make plans to build local electric systems to replace privately owned utility companies. The phrase "private electric businesses" is pretty strange but what it means is the electric utility. Namely companies like PG&E. And, if you gaze at the bottom of the page is this disclaimer: "Paid for by Yes on 16/Californians to Protect Our Right to Vote, major funding from Pacific Gas & Electric Company, a coalition of taxpayers, environmentalists, renewable energy, business and labor." Let me guess the ratio of PG&E money to other groups is on the order of 90%?

Reading on further the web site makes several claims. By passing proposition 16 "ensures that voters will have the final say—by requiring a vote—when local leaders decide to spend public dollars or incur public debt to go into the retail electricity business." And "it will help communities design alternative energy programs that are more likely to have strong community support and be successful." And "By requiring a local vote, this initiative will increase, not diminish, local control." It also warns that when local governments "enter the retail electricity business" the cost can run into millions or billions of dollars due to the capital required.

Obviously this web site is attempting to appeal to "small government", "low taxes", "rein in government spending" memes being spun around by conservatives.

But let's turn to the actual proposition and see what it says. It is on the Qualified Statewide Ballot Measures list and slated for the June 2010 election. That site has a PDF containing the ballot measure. I've attached the PDF to this posting.

Based on a California law requiring two-thirds majority voter approval before tax increases, the initiative declares that governments should be required to meet the same voter approval standard before "using public funds, borrowing, issuing bonds gauranteed by ratepayers or taxpayers, or obtaining debt or financing to become an aggregate electricity provider." It goes on to state that governments often start such plans without voter approval, and that the source of funds is electricity rates or taxes.

I find it rather curious that the initiative explicitly focuses on electricity providers. Why doesn't it also focus on other activities that governments enter into that also use funds sourced from taxes? Could it be that this is a thinly veiled attempt by PG&E to launch what looks like a voter initiative but is instead a corporation abusing the voter initiative system?

The purpose is to require government to gain voter approval (two-thirds majority) before starting such a project. However they word it the other way around. In their wording the initiative is about guaranteeing a right to vote on these matters. It seems to me a curious wording that implies that somehow an existing right to vote on something has been taken away or that there's a threat our right to vote on things is being threatened. Instead this initiative has a purpose to expand the range of things on which voters must consider.

The initiative would add a new section to the California Constitution. This is where the requirement would live, in the California Constitution.

In my opinion this is a bad initiative by itself even before considering the corporate funding of the initiative. It forces a two-thirds majority requirement that would be nigh on impossible to meet. I haven't been following state politics but if there is a 2/3rds requirement before our government can add new taxes then it's no wonder that the states finances are in such a problematic state.

The thrust of this initiative appears to be wholly to the benefit of the incumbent utility companies. These utility companies obviously would be worried about any threat to their monopoly position in delivering electricity. When governments enter the electricity business it creates a hole in the service territory where the utility is not delivering electricity, and instead a local city or county is doing so. Therefore by imposing a nearly impossible two-thirds majority requirement the proposition would make it nearly impossible for a local government to enter the electricity business, and the follow-on effect would be to preserve the monopoly position of the utility company.

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