Initiatives

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By JESSICA TOLEDANO

Staff Reporter

This may not seem to be the year for sexy propositions, but don’t let looks fool you: Of the dozen or so measures that will appear on the Nov. 3 ballot, at least half could impact L.A.’s business community.

That includes an initiative that would virtually dismantle the state’s recently deregulated electricity industry and one that would grant local governments the ability to share sales-tax revenues.

“There are some very important initiatives facing the business community this year,” said Fred Main, senior vice president of the California Chamber of Commerce. “It is true that there is no attention-grabbing issue this year, but it is also true that those who do vote have had a very long time to consider some very complicated ballot measures.”

The two most crucial measures, Main and others agree, are Proposition 9, which seeks to overturn portions of the newly enacted electricity deregulation laws, and Proposition 1A, a $9.2 billion bond measure to make infrastructure improvements to the state’s educational system that would give some incentives to California developers.

Proposition 9 was placed on the ballot by Californians Against Utility Taxes, an organization led by consumer activist Harvey Rosenfield. The measure’s backers say it will protect consumers and business owners from having to pay $28 billion in debt accumulated by the utility companies over the past two decades.

Proponents also say passing the initiative will result in a 20 percent reduction in utility rates.

“Businesses will save thousands of dollars if the measure is passed,” said Doug Heller, campaign coordinator for Californians Against Utility Taxes. “The utility companies are trying to force businesses and consumers to pay for investment mistakes they made. This measure will benefit the business community.”

Not so, say the Proposition 9 opponents, who are backed by California’s large utility companies, as well as an unusually broad coalition of business groups, labor unions, municipalities and some environmental groups. The No on 9 campaign has raised more than $30 million to get their message out, according to campaign officials. Opponents say the measure would dismantle California’s new competitive electricity marketplace and eventually result in rate hikes.

“It will hit businesses very hard in Los Angeles if this bill passes,” said Bob Cendejas, spokesman for the No on 9 campaign. “Not only that, if it does pass, the matter will be litigated for years, leaving deregulation on hold indefinitely.”

Another big measure is Proposition 1A, the education bond measure, put on the ballot by the legislature, led by Assemblyman Antonio Villagarosa, D-Los Angeles. If passed, it would be the largest education bond issuance in California history, pumping $9.2 billion into the school system. The money would go for infrastructure improvements, 145 new schools and upgrades in technology.

“Every billion dollars this bond brings into the economy is expected to bring 30,000 new jobs on the market,” said Jim Murdoch, spokesman for the Coalition for Adequate School Housing, a group backing the proposition. “This is certainly a powerful impetus for the economy. And good schools mean good business. This will have far-reaching effects on the business community for years.”

Real estate developers favor the initiative because it includes a provision that would prevent local governments from blocking new housing developments based on the argument that nearby schools would be unable to accommodate added enrollment. The measure also would cap the fees developers are forced to pay municipalities for infrastructure improvements, which builders say would help bring down the cost of homes.

The measure also has the support of the California Business Roundtable, a group of executives from the state’s blue-chip firms. The campaign plans to spend at least $1 million on advertising to get out the vote.

There is no organized campaign against Prop. 1A and an education bond measure has not lost since 1982. But there is outspoken opposition. Assemblyman Tom McClintock, R-Granada Hills, wrote the ballot argument to the measure and says if passed, it will be detrimental to California’s business community.

McClintock argues that the $9.2 billion debt would downgrade California’s credit rating at a time when the economy is treading on thin ice.

In addition to state initiatives, Proposition A, a local Los Angeles County measure proposed by Supervisor Zev Yaroslavsky, also could have a considerable impact on the local economy.

The measure would stop any future subway construction by prohibiting use of the county’s transit sales tax on the planning, design, construction, finance or operation of any new subway extension. It also would create an oversight committee for the Metropolitan Transportation Authority’s spending of sales tax revenues and mandate an independent audit of the agency.

Yaroslavsky said the subway system is costing Los Angeles taxpayers $300 million per mile and that Prop A would force the MTA to consider other transportation solutions, such as light rail or an improved bus system.

“Transportation infrastructure is important for the economic vitality of this city,” said Yaroslavsky. “How long are we prepared to wait? Four or five generations for a working transportation system? The business community of this city will benefit from having a working transportation system, not one that may never be realized on our lifetime.”

There is no organized campaign against the measure, but a number of outspoken community members are angered that the proposition would end the subway construction right when it was about to break ground on the Eastside.

The initiative has been ahead in the polls and is likely to win, said Rick Taylor, a West Los Angeles a political consultant following the issue.

“The public understands that the MTA has been a mismanaged agency that has wasted taxpayers’ money,” said Taylor. “It has proven to be a failure. I think the public wants change.”

Other notable initiatives are Proposition 7, a measure sponsored by the Planning and Conservation League, an environmentalist group, that would grant $2.3 billion in tax credits over the next 11 years as an incentive for private industry to intensify the fight against smog. It specifically targets old diesel trucks and buses. Tax credits would be awarded to businesses that reduce other emissions as well, including pollution from locomotives, ships, heavy construction machinery and power mowers.

Proposition 1 would amend Proposition 13 by allowing owners of contaminated property to clean up without triggering a property tax increase.

Another initiative sparking business interest is Proposition 11, introduced by Assemblyman George Runner, R-Lancaster, which would allow local governments to share tax revenues.

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