MOORLACH CAMPAIGN UPDATE — 2018 Ballot Measures — September 21, 2018

It’s that time when friends receive their sample ballots and ask me what my positions are on the propositions and the candidates. I appreciate that good citizens not only want to vote, but also wish to make intelligent votes by reviewing numerous inputs and recommendations. Consequently, I’ll be issuing “campaign” UPDATEs over the next few days and weeks on the various segments of your ballots.

Your upcoming November 6th General Election participation opportunity includes 11 statewide ballot measures for your consideration. My recommendations are provided below.

The ballot measures garnering the most attention are Propositions 6 and 10.

Prop. 6 would lower your gas tax and annual auto fees to former levels, as this provided adequate funding to repair roads. Regretfully, Caltrans is a mismanaged department of transportation. Caltrans needs to be restructured, not your budget.

Prop. 10 is a socialistic effort to impose rent control. I’ve owned rental property and it is not an easy undertaking. To cap an investor’s ability to earn revenues is wrong on its face and a solution that will have dire unintended consequences.

For some of the other ballot measures, allow me to provide two basic decision principles. The first is, if at all possible, do not vote for a tax increase. Secondly, if at all possible, do not vote for a bond measure, no matter how righteous the cause, as it may lead to either tax increases or budget cuts in the future.

Propositions 1, 3 and 4 would authorize the issuance of general obligation bonds that will have to be paid out of the state’s general fund. However, since California has the largest unrestricted net deficit in the nation, it most definitely does not need to add to its current debt load (also see MOORLACH CAMPAIGN UPDATE — Vote No on Proposition 68 — May 5, 2018, MOORLACH CAMPAIGN UPDATE — Proposition 68 — March 23, 2018, and MOORLACH UPDATE — Propositions 68 and 69 — May 18, 2018). Besides, why is Sacramento borrowing when it had $13 billion in additional revenues this fiscal year? Isn’t paying cash the cheapest and quickest way of addressing these proposed projects?

Proposition 2 is also a bond. However, it will have an existing revenue stream dedicated to addressing the principal and interest payments. The proceeds will be used to construct permanent housing, thus providing assets that will exist long after the loans are paid. And, the debt will be issued while the country is still in a low-interest rate environment.

Prop. 2 also has a story, which you’ve heard from me on a number of occasions. This is the “No Place Like Home” initiative to obtain $2 billion in funding to build immediate supportive housing for those who are homeless and mentally ill (see MOORLACH UPDATE — More Prop. 63 Repurposing — January 6, 2016). The income stream that is being securitized is the Mental Health Services Act (MHSA) income tax on millionaires that was established with Proposition 63 back in 2004.

I don’t believe that the voters would rescind their support for the MHSA. I am not aware of any anti-tax organization that is going to gather enough signatures to reverse the Prop. 63 income tax on millionaires. Therefore, with this tax in place in perpetuity (theoretically), let’s use it in a more prudent manner by allocating it to pay down a housing mortgage for the most needy in our communities. Currently, counties are not spending these revenues, due to the lack of concrete allocation plans. Prop. 2 gives a specific usage directive by dedicating 6 percent of the revenues toward paying off the bonds.

By providing immediate housing, the diagnosis and treatment for those who are homeless and mentally ill can begin. But, it starts with housing. That’s why Prop. 2 is worthy of your vote. And that’s why I was a joint author with Senator Kevin DeLeon on SB 1206 to put this matter on your ballot (see MOORLACH UPDATE — Joint Author Details — July 7, 2018).

I believe the other ballot measure recommendations below are self-explanatory. But, I should mention that I am a strong proponent of Prop. 6. It would repeal the regressive gas tax approved by the supermajority with SB 1 (2017) that unfairly burdens our state’s poor and its commuters, who are forced to fund a mismanaged Department of Transportation that is in woeful need of reorganization. There are funds to repair our roads, but they’re not being spent wisely. You have received plenty of UPDATEs from me on this subject matter in the past, so I’ll stop my repetition. But, I will close to inform you that I am working on plans to address Sacramento’s methodology to fix its roads, so please stay tuned.

1 Issues $4 billion in bonds for housing programs and veterans’ home loans No
2 Authorizes state to use revenue from millionaire’s tax for $2 billion in bonds for homelessness prevention housing Yes
3 Issues $8.877 billion in bonds for water-related infrastructure and environmental projects No
4 Issues $1.5 billion in bonds for children’s hospitals No
5 Revises process for homebuyers who are age 55 or older or severely disabled to transfer their tax assessments Yes
6 Repeals 2017’s fuel tax and vehicle fee increases and requires public vote on future increases Yes
7 Authorizes legislature to provide for permanent daylight saving time if federal government allows Yes
8 Requires dialysis clinics to issue refunds for revenue above a certain amount No
10 Allows local governments to regulate rent No
11 Allow ambulance providers to require workers to remain on-call during breaks paid Yes
12 Bans sale of meat from animals confined in spaces below specific sizes No

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