Tackling the State Props: Part II

Editor’s Note: This is Part II of a three-part series on state-wide propositions on the November Ballot.  Part I covered Proposition 1 through 4 (Oct. 12 edition). Part II covers Propositions 5, Proposition 6 and Proposition 10, and Part III will cover Propositions 7, 8, 9 and 11.  
Two state-level political leaders from Santa Cruz:  John Laird, the current California Secretary of Natural Resources and former three-term state assembly member representing Santa Cruz, and Mark Stone, current state assembly member representing the 29^th District since 2012 and running for re-election,  spoke at separate events last month on the state propositions on the ballot for November election.  
Unlike Propositions 1 through 4, requesting voter approval for bond issues, Propositions 5, 6 and 10 request voter-approval for changes in state law, with different fiscal and social effects determined by different groups. Both John Laird and Mark Stone gave brief overviews of the support, major donors and opposition to the various propositions.  
Proposition 5: Portable Property Tax Break for Seniors: Proposition 5 proposes to expand a “once-in-a lifetime” tax break for seniors to “carry with them” the low property tax of  their existing home (usually because it was purchased many years prior) to a new home with much higher property taxes due to much higher purchase prices.  This tax break is currently allowed, in most counties, only if the sale and purchase of the new home happens in the same county, and the price of new home is equal to or less than the market price of the original home that is sold. Proposition 5 would expand this tax break for buyers, 55 years or older,  “to carry” the low property tax rate of their original home to any county in the state, for an unlimited number of new homes, regardless of the price.  
According to the Legislative Analyst’s Office, the state’s nonpartisan budgetary accounting office, local governments and school districts will lose $2 billion annually ($1 billion each) in reduced tax revenue. The state government would be required to backfill most of these costs, increasing state spending by a roughly equivalent amount. Some school districts in areas with high property taxes (roughly 5 percent across the state) would not be made entirely whole.
John Laird highlighted the primary forces behind Prop. 5 has been the California Association of Realtors and the Howard Jarvis Taxpayers Association. Laird said opponents believe it’s a tax break for the wealthiest of Californians who are already benefiting from lower property taxes, and it would cause extremely difficult revenue shortfalls for local governments. “Supporters say Proposition 5 would help California’s housing crises. That’s a sham,” concluded the editorial board of the Sacramento Bee.
Supporters: California Association of Realtors, John Cox (Republican candidate for Governor),California Republican Party, California Chamber of Commerce, Howard Jarvis Taxpayers Association, The Bakersfield Californian editorial board
Opponents. California State Association of Counties, California Teachers Association, California Democratic Party, California Republican Party, California State Sheriffs’ Association; San Jose Mercury News, San Francisco Chronicle, The Press Democrat and Sacramento Bee editorial boards.
Proposition 6: Repealing the Gas Tax: If passed, Proposition 6 would repeal the gas tax increase approved by the state legislature in early 2017 with a 2/3 majority vote (Senate Bill 1), that currently generates about $2.6 billion in revenue, expected to increase to about $5 billion in 2020-21, for improvements to local roads, state highways and public transportation. Prop. 6 not only repeals SB 1, but requires voter approval for any future state taxes on gasoline or diesel.  
Laird gave some background to SB 1 that Prop. 6 seeks to repeal. Laird said SB 1 was a very controversial and partisan bill, but was also the first increase in state-excise tax on gasoline (by 12 cents per gallon) and diesel fuel (by 4 percent sales tax) since 1992. The 1992 tax does not adjust for inflation, which means road improvement revenue “has shrunk by the amount of inflation since 1992- reducing funding in the neighborhood of about 40-50 percent,” Laird said. Plus, cars have become much more fuel efficient- with a growing number powered solely by electricity, stretching existing gas taxes for miles traveled even further, while roads are deteriorating with increased traffic.  
In an Op-Ed for the Santa Cruz Sentinel, Assemblymember Mark Stone and 5^th District Supervisor Bruce McPherson wrote, “SB 1 funding has already been tapped to perform some repairs in our county and is expected to provide an estimated $115 million locally for improvements in the next 10 years.”
Governor Brown came out particularly hard against this measure when it qualified for the ballot, stating in a rare tweet from his personal account, “This flawed and dangerous measure pushed by Trump’s Washington allies jeopardizes the safety of millions of Californians by stopping local communities from fixing their crumbling roads and bridges. Just say no.”
Supporters: John Cox (Republican candidate for governor), California Republican Party, Howard Jarvis Taxpayers Association.
Opponents: Lt. Gov. Gavin Newsom (Democratic candidate for governor) California Democratic Party, Sierra Club California, California Chamber of Commerce, California Labor Federation, League of Women Voters of California, League of California Cities, San Francisco Chronicle, Los Angeles Times, San Jose Mercury News.
Proposition 10: Local Governments and Rent Control: Proponents of Prop. 10 emphatically point out what Prop. 10 is not- it is not rent control mandated by the state. Prop. 10 would repeal the Costa-Hawkins Rental Housing Act; an anti-rent control law passed by the legislature in 1995 that weakened some types of rent control already enacted by local governments, and excluded any single-family home, condo or apartment built after 1995 from any local rent control. The Costa-Hawkins act mandated “vacancy de-control”, allowing previously controlled rents to rise to market rates upon vacancy.
Perhaps the Sacramento Bee captured the dilemma of Prop. 10 best- while opposing rent control in principal, the editorial board is a strong supporter of local control of local ordinances- and therefore recommends a yes vote on repealing the Cost-Hawkins act. “Despite the hype — of which there is plenty, thanks to tens of millions of dollars being spent by developers and property companies to kill it and by Michael Weinstein’s AIDS Healthcare Foundation to promote it — Proposition 10 isn’t really about rent control. It’s about local control, which is why we recommend Californians vote “yes.”
Repealing the Costa-Hawkins Rental Housing Act gives more power to local municipal and county governments to craft their own forms of rent control. Prop. 10 does require, however, that any form of rent control adopted by local government must insure landlords receive a “fair rate of return on investment.”
Assemblymember Stone expressed regret the repeal of Costa-Hawkins did not happen in the legislature, with some compromise on state law regarding grounds for eviction, but the proposed bill was killed by strong pressure from the home building industry and real  estate interests.     
While gubernatorial candidate Gavin Newsom said he supports expanding renter protections, he concludes the repeal of Costa-Hawkins could have “profoundly problematic” consequences. His challenger John Cox also opposes the measure, calling it a “bad deal for renters,” according to capital public radio. org.
Supporters: California Democratic Party, California Teachers Association, AIDS Healthcare Foundation, California Nurses Association, League of Women’s Voters, SEIU California,  LA Times Sacramento Bee editorial board
Opponents: California Republican Party, California Apartment Association, California Chamber of Commerce, State Building and Construction Trades Council of California, Lt. Gov. Gavin Newsom, Orange County Register editorial board, The Fresno Bee editorial board.