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California Story: The Initiatives Shake Down While Banana Republic Politics Revs Up

Posted: 10/26/2012 3:59 pm

After a mostly sleepy summer and fall, California's initiative campaigns are concluding in a paroxysm of the bizarre. Here's the latest in the wild banana republic-style funding action, and a forecast of the outcomes of the various initiatives on the ballot.

Quite a few people wonder why Governor Jerry Brown, who also does events with business leaders backing his plan, is doing a lot of campaigning now on behalf of the Prop 30 revenue initiative in Democratic base sorts of events.

The new USC Dornsife/Los Angeles Times poll explains why that may be.

The poll shows the Prop 30 revenue initiative -- temporary income tax hikes on highest-income people, quarter-cent sales tax hike on all to stave off big education cuts -- still leading, but its margin having slid to only 46% to 42%. But on a conference call yesterday, the USC poll crew said that most of the undecided voters on Prop 30 are Democrats, people of color, and/or Obama voters. (Barack Obama will win here in a landslide.) And of course young voters, who tend to be for Prop 30, don't turn in as high numbers as their older counterparts and are not all that well informed about the issue.

The poll also revealed the Brown himself is plus 19 on job approval with these undecided voters, while plus 6 with likely voters as a whole.

Oh, and that heiress Molly Munger, who spent millions on TV ads attacking Prop 30 before backing off, might also be responsible along with the hide-the-funders conservative crew behind the No on 30 campaign if Prop 30 goes down. Some 6% of voters are for her dead-from-the-start Prop 38 income tax hike for nearly all initiative and against Prop 30, which has always had a much better chance of passage and always led the Proposition 38, the foolish Munger notion of income taxes for nearly all, in the polls.

Some, including recent Munger associates, are ready to blame her and her brother, Charlie Munger Jr., who has spent $35 million so far against Prop 30 and for the Prop 32 anti-public employee union campaign funds measure, for the potential defeat of Prop 30 and the big problems that will follow.

"If it wasn't for the Mungers, there really wouldn't be any big opposition" to Prop 30. That's the assessment of former Molly Munger consultant Thad Kousser, whose day job is as an associate professor of political science at the University of California at San Diego. He wants her to drop Prop 38m worrying that her attack ads against Prop 30 are a "fatal blow" both for the initiative and for schools.

Munger has spent over $30 million on her pet project initiative, which has trailed from the beginning, despite having no funded opposition, an exercise in self-absorbed futility.

Seems like I said this last year, didn't I?

However, I think she's not most of the problem, especially since she was forced to back off on her attacks after a week of ads.

In the money action, Molly Munger's brother -- the two siblings are children of billionaire investor Charles Munger, Warren Buffett's business partner -- this week just gave another $13 million to the "Small Business" Action Committee, a re-branding outfit for ultra-big bucks donors which Brown calls "an out and out money laundering operation," to oppose Prop 30 and support Prop 32, the latest initiative to try to end payroll deductions for public employee union campaign spending. Munger Jr. is up to at least $35 million in his spending through the SBAC, which is a way to avoid revealing where the money comes from when it is given to the No on 30 and Yes on 32 campaigns. On their ads, they will show that a "small business" group was a major funder, rather than a billionaire's son.

Didn't I write something about banana republic politics?

As I've illustrated before, when I laid out the unpleasant "October surprise" Brown was receiving, there really is no Small Business Action Committee. It's just a political funding vehicle and vague web site coordinated by career anti-tax/small government operative Joel Fox. It would be like me declaring the Middle Class Action Committee and then getting -- or more likely, following the Fox model, waiting for -- big money from uber-wealthy individuals and interests to show up for, ah, TV ad re-branding.

Prop 32 is going down in all the polling, but it is going down hard, i.e., its opponents have to keep on spending to make sure it stays dead.

That costs money that could go to Prop 30 or other campaigns, which undoubtedly is part of the calculus that the very small number of uber-rich individuals and, perhaps, companies -- we don't know for sure because the SBAC is acting as a laundry for the biggest anonymous contribution in California history, funneled through an Arizona super PAC -- has made in their planning against higher taxes on themselves and other high-income folks and in their losing effort to de-fund the unions.

The California Fair Political Practices Commission sued yesterday to force a shadowy Arizona super PAC which gave $11 million of anonymous money to the No on 30 and Yes on 32 campaigns through the Small Business Action Committee branding funnel to reveal the true donors. Americans for Responsible Leadership is absolutely refusing, claiming it doesn't have to, despite California law to the contrary.

The outfit's lawyers claim that no contributor directs that funds go to a particular campaign. But its officers are lightweights, even in Arizona. Who would just give them huge amounts of money to do with as they please in other parts of the country? In the real world? No one. The game is called hide-the-pea.

A judge will hear the case in Sacramento on Tuesday, just a week before the election.

While Brown is very good at pulling rabbits out of hats, the NWN forecast was already that Prop 30 and Prop 32 are both going down. Not that Brown doesn't have a shot.

But if the forecast proves correct, the victory for the No on 30 forces -- whose new ad was just ripped by the Los Angeles Times, Sacramento Bee, and Legislative Analyst Office as very distorted -- will be a very tainted one. And that's before the consequences of losing that prospective revenue, which will be severe.

My expectation is for status quo ante to prevail. No change to labor political funding in Prop 32, no change to the California revenue picture in Prop 30. Which means more big state budget cuts.

Big money always buys a big no vote on complicated fiscal initiatives, even when it's funny money. The Yes on 30 forces, nevertheless, still have a shot. In any event, Democrats in the California legislature should be closer after this election to the two-thirds vote needed, under the state's unusual requirement, to pass revenue measures after this election. It only takes a majority vote to cut a tax.

In other initiative action, look for the three strikes sentencing law to be eased by Prop 36, the death penalty to remain with the defeat of Prop 34, a complex governmental reform measure in the form of Prop 31 to falter, Prop 37's strictures against genetically modified products to fall short, new state senate districts to remain via Prop 40, penalties for human trafficking to increase per Prop 35, and a billion dollar corporate tax break to be ended in favor of renewable energy and a state budget patch via Prop 39.

You see, the fun never sets in the sunset West.

You can check things during the day on my site, New West Notes ... www.newwestnotes.com.


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