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01 Nov 2018

Paying for Propositions: A Record-Breaking Amount of Money Is Being Spent to Promote or Defeat California Ballot Questions

Written by  Laurel Rosenhall, CALmatters

It wouldn’t be election season without a bunch of big-money interests trying to tell you how to vote—and with hundreds of millions of dollars rolling into initiative campaigns over housing and health care, California hit a new record this year.

The $111 million campaign against Proposition 8 on kidney-dialysis clinics amounts to the most money poured into a single side of a ballot measure in the United States—at least since electronic record-keeping began in 2002, and possibly ever.

Here are three industries spending huge sums to influence your vote:

Landlords and real estate agents outraising rent-control advocates 3-to-1

Landlords are largely bankrolling the campaign against Proposition 10, which would allow local governments to expand rent control.

“They don’t want to see their property values decline; it’s that simple,” said Steve Maviglio, spokesman for the No on Prop 10 campaign, which has raised $74.7 million.

Prop 10 would repeal a 1995 state law that forbids cities from applying rent control to single-family houses, or any type of home built after 1995; that 1995 law also allows landlords to raise apartment rent any time a tenant moves out. Instead, the ballot measure would give cities the option to expand rent control to cover more homes—making it harder for landlords to turn a profit.

“It’s about their future, their bottom line. That’s why they’re spending so much,” said Charly Norton, spokeswoman for the Yes on Prop 10 campaign, which has raised $25.9 million, mostly from the AIDS Healthcare Foundation.

Supporters say Prop 10 is necessary, because homelessness is on the rise, and a growing share of Californians spend more than half their income on rent. Opponents say it will worsen the state’s housing shortage by discouraging developers from building more homes.

Donors against Prop 10 include corporate property owners like Blackstone, Essex and Equity Residential, as well as many individual landlords. The biggest donor is the California Association of Realtors, which has given $8 million to the campaign.

The Realtors' association also has poured $13.2 million into the campaign for Proposition 5, making it the sole funder of that push to change California’s property-tax law.

Californians now generally pay much higher property taxes if they buy a new home after selling a house they’ve owned for many years. That’s because property taxes are based on the sales price of a house, not how much it’s worth as it appreciates over time. This initiative would allow three categories of homeowners—those over 55, disabled or who lost their homes in natural disasters—to keep the property-tax levels of the home they sold if they buy a new home. Real estate agents say it would encourage older Californians to sell their homes, making more houses available in our tight market. (Experts disagree.) Of course, it also would boost their commissions.

“It will give a huge windfall to the real estate industry,” said Mike Roth, spokesman for the campaign against Prop 5, which has raised about $3.2 million, largely from public-employee unions that could see cuts if the government loses tax revenue.

Steve White, president of the California Association of Realtors, insisted it’s about “meeting a need. The unaffordability of housing in California … is largely dictated by lack of availability,” he said. “We have tens of thousands of homes that could be waiting for all those tens of thousands of younger families.”

Dialysis clinics outraising labor opponents 5-to-1

The most expensive fight on the California ballot this year is over Proposition 8, which would limit profits for dialysis companies. The businesses are fighting back, pouring $111 million into the campaign against Prop 8—most of it from two dialysis companies, DaVita and Fresenius.

“Prop 8 was designed to have a negative impact on dialysis clinics in California, and that’s why the groups that are opposed are fighting it so heavily,” said Kathy Fairbanks, spokeswoman for the No Prop 8 campaign.

She said the measure wouldn’t allow dialysis clinics to be reimbursed by insurance companies for many routine business expenses. Ultimately, that would cause companies to close clinics, Fairbanks said, giving patients fewer places to seek treatment.

Workers at dialysis clinics are not unionized. A labor group that represents other health-care workers has had its sights on organizing dialysis workers, and put Prop 8 on the ballot as part of a much larger feud within the industry.

“This record amount of (campaign) spending speaks to the priorities of the dialysis corporations, which is to protect their profits,” said Sean Wherley, spokesman Service Employees International Union-United Healthcare Workers, the sponsor of Prop 8.

The Prop 8 campaign has raised $20.3 million, most of it from SEIU United Healthcare Workers. The union argues that dialysis clinic companies are netting huge profits while allowing shoddy health and safety conditions at some clinics. Limiting the companies’ profits to 15 percent, as Prop 8 calls for, would encourage the clinics to put more money into improving patient care, the union argues.

Ambulance companies outraising labor opponents more than 600-to-1

Colorado-based company American Medical Response put Proposition 11 on the ballot and contributed most of the $29.9 million raised to support it. The measure would allow private ambulance companies to require workers to remain on call during breaks, so they can respond to an emergency even if it comes while they’re eating lunch. That’s already the common practice, but this measure comes in response to a court ruling that security guards cannot be required to stay on call while they’re on breaks. Ambulance companies don’t want to be held to the same standard.

“If applied to the ambulance industry, it would have a significant public safety risk,” said Marie Brichetto, spokeswoman for the Yes on Prop 11 campaign.

Opponents—the emergency responders who work on ambulances—aren’t raising much money; the American Federation of State, County and Municipal Employees union contributed just $47,000 to oppose Prop 11.

“This is a classic ‘big corporation against its own employees,’” said Jason Brollini, president of the United EMS Workers union that is affiliated with AFSCME.

He contends the ambulance companies’ real motive with Prop 11 is to eliminate any liability they could face from employees who sue over not getting the extra pay they’re supposed to receive when their breaks are interrupted by an emergency call.

CALmatters.org is a nonprofit, nonpartisan media venture explaining California’s policies and politics.

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