Vote No on Prop. 26

Prop 26 FAQs – the Polluter Protection Act
(from http://www.noonproposition26.com)
Nov. 2, 2010 ballot

1. What is Proposition 26?

Proposition 26 is a measure that will be on the ballot this November, and is designed to shift the burden of paying for the cost of pollution from the companies that pollute to ordinary taxpayers. This initiative will jeopardize environmental, public health, and consumer safeguards, and would worsen the budgetary problems facing state and local governments.

The Official Title and Summary for Proposition 26, prepared by the California Attorney General’s Office, says Proposition 26 “Requires that certain state and local fees be approved by two-thirds vote. Fees include those that address adverse impacts on society or the environment caused by the fee-payer’s business.”
Proposition 26 would amend California’s Constitution so that many fees would be redefined as taxes and therefore require approval by a 2/3 vote of the Legislature as a tax levy, or require a 2/3 vote by the electorate in a local election. Currently, the Legislature may enact such fees with a majority vote, and has done so to pay for a range of clean-up and mitigation programs, like the state’s Oil Spill Prevention Fund and its lead abatement program.

Proposition 26 would also change the law so that any measure that requires a taxpayer to pay a higher tax would now require a 2/3 vote, eliminating the ability of the Legislature to pass “revenue-neutral” measures which raise some taxes while lowering others, and possibly threatening tax collection efforts.

2. Who is sponsoring Proposition 26?

Funding for Prop 26, deceptively named the “Stop Hidden Taxes” initiative, comes entirely from corporations or organizations that do not want to pay for the harm they cause and would stand to gain financially if the initiative becomes law. Oil companies Exxon Mobil, Chevron, and Conoco-Philips, alcohol companies such as Anheuser-Busch and MillerCoors, and the tobacco company Phillip Morris (through a half-million dollar contribution to the California Chamber of Commerce Political Action Committee) raised over two million dollars just to qualify Proposition 26 for the ballot.

3. Why did they put Proposition 26 on the ballot?

Oil, alcohol, and tobacco industries want to make it virtually impossible to assess fees on manufacturers who create pollution or who cause health problems. The initiative’s intent is to overturn the unanimous California Supreme Court Decision Sinclair vs. Board of Equalization (1996) that permitted the enactment of mitigation fees for lead paint removal by a majority vote of the Legislature.

4. What are some of the fees that would be affected by Proposition 26?

Proposition 26 repeals any regulatory fees passed after January 1, 2010. Fees passed before that date would not be repealed but would require a 2/3 vote to increase or extend those fees. New regulatory fees to pay for oil spill or hazardous waste clean-up, health effects of cigarettes, pesticides, or alcohol, or the environmental costs of air pollution, used tires, and carbon emissions, would all be in jeopardy.
Other regulatory fees that would come under this new definition of taxes include:
• Fees used to cover immunizations for children
• Fees to pay for health services provided by the government related to alcohol abuse.
• Carbon regulatory fees for injuries related to effects of pollution
• Hazardous waste fees to support hazardous waste disposal
• Oil pipeline fees that are used to respond to oil pipeline accidents
• Fees that help reduce the burden on the 911 emergency system

5. What would be the impact of Proposition 26?

Given the current political climate for taxes, Proposition 26 would make it almost impossible to enact fees which are used for environmental and health related programs. Specifically, the initiative would limit the ability to enact fees for anything other than a direct charge for a service, so that many current fees would be reclassified as “taxes,” and require a 2/3 vote.

Proposition 26 also requires a 2/3 vote of the Legislature for any measure that “results in any taxpayer paying a higher tax,” such as tax enforcement and collection measures, legislative tax bills that raise some taxes and lower others, and the state’s conforming with federal tax changes. Therefore, Proposition 26 could also make it more difficult to collect taxes that are owed to state and local governments.

6. How would Proposition 26 affect taxpayers and the budget?

According to the non-partisan Legislative Analyst’s Office (LAO), Proposition 26 would result in “decreased state and local government revenues and spending due to the higher approval requirements for new revenues. The amount of the decrease would depend on future decisions by governing bodies and voters, but over time could total up to billions of dollars annually.”

Since the funds raised by these fees are used by state and local governments for essential programs like cleaning up environmental disasters or repairing roads damaged by large trucks, these costs would have to be paid for by the taxpayers if the initiative is enacted; or, it could lead to greater burdens on state and local general funds.

7. How will Proposition 26 affect AB32, the Global Warming Solutions Act, if Proposition 26 passes?

The current carbon permit fee enacted by the CA Air Resources Board, as well as any future regulatory fees to offset costs for implementing AB 32 or mitigating the effects of global warming in California, would all be subject to a 2/3 vote of the state legislature. Oil companies in particular want to see this hurdle in place.

8. Wasn’t a similar measure defeated by voters in the past?

Yes, California voters defeated a nearly identical initiative, Proposition 37, the “Polluter Protection Act,” in 2000. Proposition 37 had the same impact (minus the tax provision), but was written by proponents to explicitly define the types of fees which would be impacted. The current measure is drafted as a mirror image of Proposition 37, to instead limit narrowly what can be classified as fees, such that mitigation and research fees would now become taxes, subject to a 2/3 vote. However, there is no explicit mention of such fees within the initiative itself.

9. Who is opposing Proposition 26?

The No on 26 campaign is endorsed by the California Professional Firefighters, California Federation of Teachers, Sierra Club, California Nurses Association, Consumer Federation of California, the California Democratic Party, the California Labor Federation, League of Women Voters, California Alliance for Retired Americans, and more.

10. How can I get involved?

Endorse the No on 26 campaign and send a contribution to Taxpayers Against Protecting Polluters, 717 K Street, Suite 510, Sacramento, CA 95814, FPPC # 1327516. For more information please contact the campaign at StopPolluterProtection@gmail.com.