Two critical – and controversial – propositions will appear on the California ballot in November, both heavily supported by construction associations and labor.

The California Secretary of State’s Office last week says that the Local Taxpayer, Public Safety and Transportation Protection Act of 2010 qualified for the ballot with the proper amount of public signatures. The measure, endorsed by AGC and supported by a coalition of local government, transportation, business, public safety, taxpayer, labor and public transit leaders, closes loopholes to prevent the state from taking, diverting or borrowing local government, transportation and public transit funds.

You might remember that this was a favorite ploy of the governor and legislature in recent years, when the budget shortfalls would not miraculously disappear.

voters have overwhelmingly passed measures in previous elections to restrict state raids of local government funds, as well as to dedicate gasoline taxes to transportation and public transit improvements and services. Despite this, the AGC says state politicians have exploited loopholes in the law and used legally questionable tactics to borrow and raid approximately $5 billion in local government, transit and redevelopment funds in the 2009/10 budget cycle and billions more in past years. Coupled with the downturn in the economy, state raids and borrowing of local funds are contributing to severe cutbacks in local police and fire, parks, libraries, street and road repair, public transit and other local services.

If passed, the Local Taxpayer, Public Safety, and Transportation Act of 2010 would:
  • Prohibit the state from borrowing local government property tax funds which are vital for public safety and other local services.
  • Prohibit the state from taking or borrowing the Highway User Tax on gasoline (HUTA), which currently funds city, county and state road, highway, transit and other transportation improvements and services.
  • Prevent the state from redirecting or diverting locally levied taxes, including: parcel taxes; sales taxes; utility user taxes; Transit Occupancy Taxes which include taxes on hotel/motel rooms
    and rental cars; and other locally imposed taxes that are currently passed by local governments and/or local voters and dedicated to cities, counties and special districts.
  • Prohibit the state from taking, borrowing or redirecting Public Transportation Account (PTA) revenues dedicated to public transit.
  • Add additional constitutional protections to prevent the state from raiding redevelopment funds or shifting redevelopment funds to other state purposes.
The other proposition to qualify was the California Jobs Initiative (which I wrote about a couple of weeks ago). This would put a (temporary?) stop to the state’s groundbreaking climate bill, AB 32. According to the Initiative’s backers, which include Texas oil giants Valero Energy and Tesoro Corp. and a whole posse of oil and energy companies, the measure will “simply postpone implementation of the law until California’s unemployment rate remains at 5.5% or less for four consecutive quarters.”

The current unemployment rate in the state is 12.6%. You do the math.

Regardless of the potential green-tech benefits to the state down the line, opponents are rallying against this “huge tax increase boondoggle.”

“AB 32 will impose billions of dollars in higher utility rates and fuel prices on California families when they can least afford it,” says Jon Coupal, president of the Howard Jarvis Taxpayers Association and co-chair of the proposition’s campaign committee. “The California Jobs Initiative will let voters – not politicians and unelected bureaucrats – decide whether or not now is the right time for this massive new energy tax.”

“Small business owners and employees support clean air, clean water, and healthy communities because they live in this state, but the imposition of AB 32’s punitive measures couldn’t be worse,” said John Kabateck, Executive Director of the National Federation of Independent Business/California, a campaign co-chair. “Studies estimate AB 32 will cost small businesses almost $50,000 a year and put over a million jobs at risk. By deferring those costs until the economy improves, the California Jobs Initiative will give small businesses a fighting chance to survive the worst economic crisis since the Great Depression.”

As you can imagine, environmentalists will fight this proposition tooth and nail, so get ready for a TV ad “lollapalooza.” The Los Angeles Times predicts the spending on the initiative, both pro and con, could reach $150 million. I don’t think even Meg plans to spend that much.