The Curse of the Supermajority, California Style: Corporations vs. the Public Interest

Proposition 13 has long been seen as the “third rail” of California politics, until, in 2020, the labor-community alliance behind Proposition 15 sought to reform our state’s commercial property laws.  

The Schools and Communities First initiative would have led to the reassessment of corporate properties while leaving individual homeowners untouched.  This simple effort to make large corporate interests pay their fair share would have resulted in more than $8 billion of annual revenue for California schools and vital social services.  

In sum, it was a game changer.  

The response to this effort to close an egregious corporate tax loophole that has been giving some of the state’s most powerful interests an undeserved windfall for decades was for monied interests to drop $39 million into the No on 15 campaign which consistently lied about the measure, scaring homeowners and small businesses into believing that the reform would affect them when, in fact, it would not have impacted them at all.  

Thus, despite leading in the polls early on, the deceptive No on Prop 15 campaign managed to scare away enough voters to win by a couple percentage points, even as Biden won the state handily.  

At the heart of the opposition effort’s big lie was the argument that small businesses owned by people of color would be shuttered by the measure.  They paid a former NAACP leader, Alice Huffman, handsomely to help in this along with some former labor consultants who switched sides to help protect corporate interests.  

Thus, due to diligent fundraising by the California Business Roundtable, they were able to outspend Yes on 15 by two-to-one on TV ads in the final days of the campaign.  This, combined with weak support or opposition by many prominent Democrats concerned about losing votes for supporting a tax increase on powerful corporations, sealed the deal.  

Despite forming a substantial grassroots effort in the midst of a pandemic that mobilized 24,000 volunteers and 700,000 supporters, the struggle to undo decades of disinvestment in education and public services failed by a painfully slim margin.  And while there are attempts at present to reboot this coalition as well as others to push a separate wealth tax in California, the forces behind the defeat of Proposition 15 are pivoting to offense. 

The California Business Roundtable has already raised $3 million in support of a potential ballot measure to require a two-thirds supermajority for local measures to raise revenue or fees.  If such a measure were to pass, it would make efforts in localities all over the state to support education, build transit, and invest in public infrastructure much more difficult.  

As we have been seeing in Washington, D.C. where the filibuster makes passing progressive legislation next to impossible, this measure would go a long way to pre-emptively killing bold initiatives to fight climate change, improve school systems, or expand healthcare.  

Taking a page from Grover Norquist, this under the radar effort by business interests aims to “starve the beast” of the public sector by imposing an undemocratic supermajority requirement.  

But this is not something powerful interests like to do too publicly because, as their deceptive campaign to kill Proposition 15 illustrates, they know most voters would not support a naked attempt to maintain an unfair economic advantage or protect the rich from taxation. 

 That is why, as the Sacramento Bee reported, a pair of California citizens are seeking to expose the people behind the dark money curtain:

• Two people have filed a complaint with the Fair Political Practices Commission, alleging that wealthy donors are concealing their support for a ballot initiative that would require a two-thirds majority for local governments and voter approval in order to levy new taxes.

• Sandra Beltran, a registered nurse, and Cassondra Curiel, president of United Educators of San Francisco, allege that real estate mega-donors contribute money to the California Business Roundtable Issues PAC, which in turn sends the money to the Californians for Taxpayer Protection Committee, letting the donors avoid disclosure.

• “This practice constitutes campaign money laundering plain and simple. The Fair Political Practices Commission must take immediate action to stop these violations of law. The Commission must conduct a full and thorough investigation of these practices to ensure the integrity of the public disclosure requirements,” according to the complaint, which was filed on Monday.

• The complaint lists several respondents, including Western National Group and Affiliated Entities, the Californians for Taxpayer Protection and Government Accountability and the California Business Roundtable Issues PAC.

The core of their complaint is that by failing to disclose the top donors, these groups are shielding the “massive landholders, mega-developers, landlords and their affiliated corporations who stand to be its biggest beneficiaries.”  

Indeed, some of the big real estate interests behind the measure have land holdings in excess of $14 billion in large metropolitan areas across the state.  If successful, this ballot measure would take away one of the crucial tools California cities have to fund major projects and would instead enshrine the power of the corporate elite by shielding them from ever having to pay their fair share.  

The least California citizens deserve is the opportunity to see who is behind this initiative so they can make an informed decision rather than getting fooled once again by a well-funded campaign of deception.