Business Mostly Comes Out Ahead in State Election

By Dale Kasler dkasler@sacbee.com The two CEO candidates for high office lost, but corporate California mostly had its way in Tuesday's elections. With millions of dollars worth of support from big business, Californians approved initiatives that will make it harder to raise fees and divert public dollars away from roads and redevelopment projects. They also defeated a proposition that would have repealed $1.3 billion in annual corporate tax breaks. The business victories came in spite of resounding defeats for the two former Silicon Valley chief executives making their political debuts. Former eBay CEO Meg Whitman lost the race for governor, while former Hewlett-Packard CEO Carly Fiorina conceded Wednesday that she was beaten in her quest for the U.S. Senate. "I think it was mixed for business," said Jim Wunderman, president of the Bay Area Council, a pro-business organization based in San Francisco. Arguably the most crucial win for corporate interests was the defeat of Proposition 24, which would have repealed $1.3 billion worth of tax breaks approved by the Legislature and set to take effect in January. Proposition 24's opponents included tech titans such as Intel, Cisco and Genentech, and entertainment conglomerates like Walt Disney and Viacom. They contributed a combined $13 million to the effort. "Opponents (of Proposition 24) very successfully framed it as a job tax in the middle of a recession," said Jack Pitney, a political expert at Claremont McKenna College. But Jean Ross of the California Budget Project, a Sacramento organization that lobbies the Legislature on behalf of low-income Californians, said the defeat of Proposition 24 will "widen the state's budget gap," leaving less money for social programs. A coalition of developers, municipalities and mass-transit agencies spent $4 million to pass Proposition 22. The initiative will prevent the Legislature from grabbing road-tax funds and redevelopment dollars from local government in order to balance the budget. The vote comes a year after the Legislature redirected $1.7 billion in redevelopment money back to the state treasury, hindering local projects throughout the state. "They've made repeated raids on local funds," said Jim Earp of the California Alliance for Jobs, one of the supporters of Proposition 22. Environmentalists, meanwhile, bemoaned the passage of Proposition 26, a complicated initiative that will make it harder for the Legislature and local governments to raise fees on businesses. Currently, the Legislature can raise fees by a simple majority vote. Now, a broader array of fees will be treated as taxes, which means they will require a two-thirds vote for passage. Fees imposed by local governments will need voter approval. The proposition received more than $13 million in backing from the California Chamber of Commerce and the oil, tobacco and alcohol industries. It was derided as the "polluter protection act" by the Planning and Conservation League, a leading environmental group. "It goes against the principle that polluters should pay to clean up the messes they make," said Bill Magavern, director of Sierra Club California. Some environmentalists have said Proposition 26 could make it harder to impose some of the fees planned as part of California's landmark global-warming law, which seeks to reduce greenhouse gases. But Mary Nichols, chairwoman of the Air Resources Board, which is drawing up the rules for implementing the law, said Proposition 26 will have no effect. Nichols joined environmentalists and Gov. Arnold Schwarzenegger in hailing the defeat of Proposition 23, which would have suspended the global-warming law altogether. Proposition 23 was mostly bankrolled by two Texas oil companies. But other businesses lined up to defend the law, particularly those pushing green-energy technologies. In a conference call with reporters Wednesday, Schwarzenegger and others said the defeat of Proposition 23 will keep California in the forefront of the green-energy revolution. "Invest in California, bring your venture capital here," Schwarzenegger said. Despite California's long tradition of supporting environmental causes, the Proposition 23 opponents said Tuesday's vote wasn't a slam dunk. Annie Notthoff, of the Natural Resources Defense Council, noted that oil companies were able to defeat a 2006 initiative that would have funded green-energy development through a $6 a barrel tax on oil extraction. "We didn't take this threat lightly," she said. Read more: http://www.sacbee.com/2010/11/04/3157796/business-mostly-comes-out-ahead.html#ixzz14XDzk2pi

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Business Mostly Comes Out Ahead in State Election

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