Spending by moneyed interest groups to pass or kill California ballot measures may set a record this year and could approach a half-billion dollars.
Six weeks before the election, proponents and opponents of ballot measures had committed nearly $400 million, closing on the record of the 2008 election cycle.
However, it’s just chickenfeed, relatively speaking.
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A number of the 17 statewide measures on the Nov. 8 ballot have major financial impacts, and collectively they could be several hundred billion dollars.
Take, for instance, Proposition 55, sponsored by health care and education groups to extend temporary tax hikes on the state’s highest-income taxpayers for an additional 12 years.
Based on what the surtaxes have generated since 2012, the Legislature’s budget analyst estimates Proposition 55’s take at $4 billion to $9 billion a year, or $48 billion to $108 billion over the 12 years.
Even were Proposition 55’s sponsors to spend $100 million, which is on the high end of estimates, the payoff for them could be more than 1,000 times as much – so the campaign spending truly is chickenfeed in comparison.
Robert Stern, one of the state’s foremost experts on campaign financing, put it this way in a public radio report:
“Where you have a big money impact, you’ll see big money spent. For many of those interests, it’s a small investment with potentially big results.”
So far, the largest single “investment,” approaching $100 million, appears to come from the pharmaceutical industry to kill Proposition 61, which purports to reduce drug prices paid by the state by limiting them to rates paid by the U.S. Department of Veterans Affairs.
The state spends $3.8 billion a year for drugs, principally for patients in the Medi-Cal program for the poor, and for state government retirees, but its unknown how much Proposition 61 would reduce that cost, or even if it would.
Clearly, however, Big Pharma doesn’t want California drug price controls, fearing a precedent that could spread with potential nationwide impacts of untold hundreds of billions of dollars. So it’s willing to spend heavily to defeat the measure.
The plastic bag and tobacco industries fear these measures not so much for their direct impact, but their potential for having what happens here spread elsewhere.
Legalizing marijuana, as Proposition 64 proposes, could make it a multibillion-dollar industry.
The cost-benefit ratio is much easier to calculate on Proposition 51, a $9 billion school construction bond backed by education groups and developers, who will be hit with higher school construction fees if state bond money dries up.
There’s no organized opposition to the bond, so its backers aren’t spending much, relatively, to pass it. Thus the payoff of $9 billion makes it a very lucrative political investment.
And so it goes. Big money is being spent, but gargantuan money is at stake in the outcomes.