Critical Business Issues Pending for Fall Ballot
By HOWARD FINE
Now get ready for the big one.
In what’s shaping up to be one of the highest-stakes initiative wars in recent years, business groups in California are gearing up to spend upward of $100 million on at least five measures expected to qualify for the November ballot.
With last week’s primary election still fresh, one proposal already has virtually qualified for the November ballot: a business-backed referendum aimed at overturning the employer healthcare mandate passed by the state Legislature last year.
Now gathering signatures are initiatives to raise commercial property taxes and curb lawsuits against employers, along with a measure to tax phone calls for emergency room care.
And should reform fail in the Legislature, a coalition of business groups has prepared an initiative that would sharply reduce workers’ compensation costs.
“We could be seeing a huge initiative war here,” said Tony Quinn, co-editor of the California Target Book and a consultant to business groups. “Business groups could easily spend $20 million to $25 million on each of these.”
Two converging forces are fueling the ballot-box efforts. Emboldened by the recall of Gray Davis and the election of Arnold Schwarzenegger, business groups are pushing to roll back what they see as the state’s anti-business climate.
Meanwhile, California’s fiscal crisis has prompted interest groups to go after businesses for more revenue.
The Burlingame-based California Teachers Association is sponsoring the measure to hike commercial property taxes by an estimated $6 billion. The money would be used to hire more teachers and upgrade classrooms.
And a loose coalition of hospitals and doctors is behind the telephone surcharge measure to boost emergency room funding by at least $500 million.
“You put all five of these together and you’ve got some very serious policy being made at the ballot box rather than in the Legislature,” said Darry Sragow, a Democratic political consultant.
California has seen similar high-stakes initiative battles before.
History Repeating
Back in 1988, tens of millions of dollars were spent on five insurance reform measures. In 1990, business interests raised nearly $30 million to defeat the “Big Green” initiative that would have enacted strict environmental controls.
Then, in the mid-1990s, business and insurance groups spent tens of millions of dollars to defeat two universal healthcare measures. And as recently as 2000, millions were raised to roll back legislation that would have made it easier to sue businesses.
So far, two measures have drawn the most attention: the hike in commercial property taxes and the referendum on healthcare mandate SB 2.
“The teachers’ union wants us in the business community to pay the freight,” said Mitch Zak, vice president of Randle Communications, the Sacramento consulting firm handling the campaign against the commercial property tax hike.
Zak said the campaign was prepared to raise tens of millions of dollars to fight the proposed initiative.
“If they have that much money to spend, they should just put it into a fund to help schools and pay for quality education,” said Jim Farrell, spokesman for the teachers’ union initiative.
The 3% surcharge on all phone calls, both regular and wireless, would raise $500 million for emergency room services and emergency phone networks. While the measure would cap the surcharge at 50 cents per month for residential customers, there are no limits on business customers.
“This would be absolutely devastating for call centers and other businesses with heavy phone volumes,” said Sara Lee, spokeswoman for the Sacramento-based California Chamber of Commerce.
Supporters of the measure,which include emergency room doctors, firefighters and other emergency responders,have until April 12 to collect 600,000 signatures. They say the surcharge is essential to fund emergency rooms and staff throughout the state.
Meanwhile, the California Chamber is spearheading the campaign to overturn SB 2, the employer healthcare mandate passed last fall.
The chamber already has gathered the signatures to place a referendum on November the ballot. But late last year, defenders of SB 2 challenged the signature-gathering process in court. Last month, the 1st District Court of Appeal ruled that it could proceed.
Labor Opposed
The California Labor Federation now is gearing up to re-create the same alliance of unions and healthcare providers that lobbied successfully for passage of SB 2 last year, according to federation spokesman J.B. Tengco.
The chamber also is collecting signatures to place a measure on the ballot that would make it harder to sue companies alleging unfair business practices under section 17200 of the state business and professions code.
Opposition is expected from trial lawyers and consumer activists.
Fine is a staff writer with the Los Angeles Business Journal.
