President’s Message: The Law of Unintended Consequences: What Really Happened in California on November 4

Neither party intended the most significant consequence of the recent election — the coming initiative tsunami in California. We have frequently discussed in this space the death of the Republican party in California, the futility of candidate-centric political action and, most important, the fact that the national Republican party has long since written off California. In this message we will discuss the political impact of the recent election.

The California Money Train

At the national level, both parties have come to see California as a place to raise money. Republicans are the worst offenders. They not only will not put any money into California, they want to make sure that nothing happens in California that would drain money or political energy away from their other projects. That’s why they put the hit out on Tim Donnelly last May in favor of politically androgynous and erstwhile 2008 Obama supporter, Neel Kashkari. Donnelly wouldn’t have won, but he would have rallied the troops, fought hard and energized his party. The real problem for the Republican establishment, however, was that a Tea Party Constitutional Conservative would have become the de facto leader of the California Republican Party just as they were fueling up the 2016 presidential money train with Karl Rove, Jeb Bush and Jim Brulte at the controls. The last thing they wanted was Californians spending money on California issues and candidates. So to quell any political uprising among conservatives, they quickly replaced Donnelly with someone you will never hear from again.

So far, so good. Problem solved. Back to business as usual. And then something happened that no one saw coming.

2014 Voter Turnout Shocker

Jerry Brown was always going to be the next governor. The Republican establishment had conceded the fact. That left both parties free to spend their money elsewhere. Hence, neither party spend much time or money getting out the vote. The political professionals on both sides anticipated lower turnout, but no one would have predicted what actually happened much less the epic, unintended consequences of a record low voter turnout. When the smoke cleared, it was apparent that voter turnout in 2014 was only half of 2010!

The Coming California Initiative Tsunami

The unintended consequence of this record low voter turnout will be the impact on the initiative process in California. Because the number of signatures required to qualify an initiative for the ballot is linked by the California constitution to the number of votes for governor, the cost and effort to get an initiative on the ballot has been cut in half. Let me explain.

To qualify an initiative, proponents of a statewide initiative must obtain valid signatures equal to 5% of the number of persons who voted for governor in the last election. (N.B. Initiatives amending the state constitution require 8%.) On Monday, that meant collecting approximately 500,000 valid signatures. In practice, this meant gathering 750,000 – 800,000 signatures because of the high number of bad signatures. All of this has to be done in a five month period. It is a daunting and expensive task. The conventional wisdom was that it required professional signature gatherers, political consultants and about $2 million dollars just get something on the ballot. Never mind passing it. While we never fully agreed with that view, it was certainly true that qualifying a statewide initiative required resources that were beyond the reach of any citizen volunteer organization. It also meant that the same big money donors who were shutting down California’s electoral process were in a position to shut off the money to any initiative they didn’t like.

All of that changed quite literally overnight on November 4th, 2014. By Wednesday morning, the number of valid signatures required dropped by half from 508,000 to 269,000 (!). This means that the gross number of signatures proponents have to gather to allow for bad signatures dropped from 800,000 to 400,000. The number of signatures that have to be gathered over the five month qualification period dropped from 160,000 to 80,000 per month; from over 5,300 signatures per day to under 2,700. To paraphrase Joe Biden, the most eloquent man ever to be Vice President, this is a BFD!

Local Impact Even Greater

The impact is not limited to statewide initiatives. The same 5% formula applies to local initiatives dealing with a tax, fee, charge or assessment. As you know, TeaPAC and CTLC have been very involved in the local initiative process. We have developed a strategy for attacking taxes at the local level using the local initiative process. The number of required signatures was already low. It is now negligible. As you can see from the chart below showing selected cities, voter turnout for the governor’s race was off significantly in every city in Los Angeles County. We can now do twice as much, twice as fast.

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 TeaPAC and CTLC: The Great Initiative Machine

Because initiatives will be cheaper and easier to qualify, they will dominate California politics for the next four years. Both liberal and conservative groups will seize the opportunity to bypass the state legislature and set the political agenda for California. Many of these will hit the ballot in November 2016. They will suck tens, even hundreds of millions of dollars out of the system just as both parties are trying to elect the next president. At the same time, the unions and democrats will have to defend against dozens of efforts to repeal local utility taxes. Their jobs and their union dues will be under unprecedented pressure.

TeaPAC and CTLC are already at the forefront of this effort. We started this effort three years ago and have provided leadership, organization and logistical support for several initiatives. We set the pace and we set the example. TeaPAC has already reorganized and rebranded itself as The Great Initiative Machine. Our time has come. We are now in our 6th year of continuous political action. No one else is as prepared as we are to lead and, more importantly, to manage this effort.

The Continuing Crisis of Citizenship

As we have said many times, our crisis is surely a crisis of leadership; but it reflects any even deeper crisis of citizenship. We citizens must take personal, individual responsibility for turning our country around. Those of us in business and the professions have an even great responsibility to become involved in civic affairs. We have the education and experience we need to show others the way. The good news is that we can act now. We don’t have to wait until we control the White House or the California legislature. We don’t have to beg, plead or cajole a local city councilman or state legislator for relief. It’s our money and we can take it back anytime we want. That’s the law. That’s what the initiative process is all about. All it takes is your personal commitment in time, money and effort.

Let’s Get Busy: Meeting this Tuesday, November 11

Your next step is to come to our next meeting this Tuesday, November 11, 2014 at 7:00PM at the Romanesque Room of the historic Green Hotel located at 50 E. Green Street, just east of the corner of Fair Oaks and Green Street. You will find convenient, inexpensive public parking across the street. See you there.

Huzzah!!

Mike Alexander

President
TeaPAC
California Tax Limitation Committee (CTLC)