Pacific Swell | Southern California environment news and trends

Proposition 26, Part 1: environment arguments

So, what the hell would Proposition 26 do? I'll look at the Yes side, the No side, and the LAO's analysis to find out.

News today is that UCLA law professors released their analysis - that's included in the no side below. In a battle of people I've interviewed in the past, we've got former DTSC chief Maureen Gorsen vs. UCLA's Sean Hecht - both making interesting points about green chemistry regulations' ability to survive in the future.

So, the people backing Prop 26 say they're worried about "hidden taxes" -

In the past decade, state legislators and local officials have been using a loophole to propose more than $10 billion in “hidden taxes” - fees disguised as taxes - on goods and services that Californians use every day, like groceries, gas, cell phones, or even emergency services.

State and local politicians routinely circumvent the state Constitution’s requirements by disguising taxes as fees because fees are easier to pass than tax increases.  At the state level, the Legislature calls many taxes “fees” so they can pass or increase the tax with a bare majority vote – not the two-thirds vote required for taxes.  At the local level, politicians call taxes “fees” so they can avoid voters and our Constitutional right to vote on most tax increases.

Proponents say they're looking to expand the definition of tax, and decrease the number of fees. A California court decision back in 1997 defined several kinds of fees - and created a test for figuring out what's a fee and what's a tax.  Sinclair Paint says "if revenue is the primary purpose, and regulation is merely incidental, the imposition is a tax, but if the regulation is the primary purpose, the mere fact that a revenue is also obtained does not make the imposition a tax.”

Maureen Gorsen, who ran DTSC, and who I interviewed a few times about Green Chemistry issues, gives her analysis about prop 26 to the pro side. She seems to say, that test will still exist, so things that are fees will remain fees. Here's Gorsen's (legal) analysis with regard to environmental issues:

There are numerous other statutes that ensure responsible parties pay for necessary environmental remediation. For example, costs incurred by any agency overseeing a hazardous waste cleanup must be paid by the liable person or persons. See Cal. Health & Safety Code § 25360. Similarly, the cost of underground storage tank cleanup is to be recovered from the owner or operator of the underground storage tank that released petroleum. See Cal. Health & Safety Code § 25299.70.
Additionally, several other California statutes give the state power to fine or penalize those who damage the environment. For instance, any person who violates an applicable air quality rule, regulation, emission limitation or permit condition is subject to civil penalties. See Cal. Health & Safety Code §§ 39674, 43027. Moreover, any person who fails to comply with cleanup and abatement orders issued by the State Water Resources Control Board and/or the Regional Water Quality Control Board can be liable for substantial civil penalties. See Cal. Water Code § 13350. Finally, any person who violates underground storage tank cleanup laws can be subject to penalties as great as $10,000 per day. See Cal. Health & Safety Code § 25299.76.

Opponents to the measure worry "regulatory fees" would have to wait for 2/3 of our fractious state legislature to support them. Including:

No folks also point out that passing a supermajority rule for fees puts California in a superminority nationally for fee in budgeting on a state-by-state basis. 47 states use a simple majority for budget approvals. California would be one of three states who needed the 2/3. 

UCLA Law School professors conclude in a paper released today that voting yes on 26 would undercut the idea that polluters pay for harms they cause - one of the key legal tools environmental law has provided. They also find that requiring a 2/3 vote for raising existing fees in the future could leave environmental health programs underfunded. And they point to specific examples of product sustainability laws - AB 2396 and AB 1343 - that would likely be stymied by the measure's passage.

That last one is a rather specific irony: product sustainability is a piece of the state's Green Chemistry Initiative - which Gorsen oversaw.

You can read the whole analysis here.

The LAO says that 26 would require that certain state fees be approved by two-thirds vote of Legislature and certain local fees be approved by two-thirds of voters. It would increase legislative vote requirement to two-thirds for certain tax measures, including those that do not result in a net increase in revenue, currently subject to majority vote. What effect would that have on the state?

Well, lower revenues and, one would think, spending. That could drop, the LAO says, by billions over time. Recent fee and tax laws would go away; that, the LAO says, would increase spending on transportation and out of the General Fund by a billion dollars - presumably because the mandates stay even if the funding mechanisms disappear. And did I mention lower revenues?

In our next post, we'll look at the money for and against 26, and who it's from.