California Prop. 26, The Morning After: How Did Big Oil Get Away With This?
Bloomberg BusinessweekChevron 1, Big Green 0
California enviro-activists never saw it coming.
News outlets called the defeat of Prop. 23 early last night, giving Big Green honchos plenty to clank their champagne flutes about. (The Weekly reports on the clash of the Green and Big Oil titans over the trendy gas-emission cap.) It was an easy distraction from the war going on a couple props over.
In the harsh Nov. 3 daylight, it's clear that by not noticing Prop. 26 until it was too late, the same orgs that beat Big Oil on 23 are now in a prime spot to have their livelihood ripped from under them.
So what the hell happened?
'No' on Prop. 26 spokesperson Heidi Pickman sounded dumbfounded this morning.
"We actually thought we were going to beat them, so I'm not sure what happened," she said. "They had a lot of money."
$18 million, to be exact -- quietly donated by Chevron, Exxon, PG&E and other dirty-industry giants. With under $4 million to fight back, Pickman said she feels the 'No' campaign didn't have the resources to communicate to the public what the change would really mean:
"It's about tax policy," she said. "People's eyes glazed -- it's hard to understand."
Prop. 26 was listed on the ballot as "2/3 Vote for Some State/Local Fees," giving voters little idea of what "fees" were in question. In fact, they will be the biggest and most important ones: Legislative fees on alcohol, tobacco, oil and other companies that have some harmful effect on the community. These fees are then recycled back into do-good groups who clean up the relevant damage.
But now that the fees are characterized as taxes, the gridlocked California State Legislature will have a hell of a time convincing 2/3 of big-money-backed candidates to fine their very benefactors.
Still, all the focus today is on Prop. 23's glory. News headlines are cocky: "California flexes green muscle and rejects Proposition 23,"On the heels of Giants's win, Prop 23 notches another victory over Texas," and "Prop 23 Crushed!"
The real news, many low-lying orgs agree, is the defeat of Prop. 23's sneaky stepsister. Environmental groups and liberal media caught on too late; by then, fancy 'Yes' ads had convinced Californians that politicians were trying to dupe them into paying higher taxes by calling them fees.
"[Green groups] did see what was happening, finally, a few weeks ago," Pickman said. "But we were just outspent [by 'Yes'] at that point."
As we reported previously, UCLA Law released an analysis of Prop. 26's potential effects. It found that many orgs -- such as stewardship programs that "prevent bulky products and harmful chemicals from entering landfills" -- would lose funding under the new 2/3 requirement. Ironically, the report also listed the Global Warming Solutions Act, the same legislation 'No' on Prop. 23 worked so hard to preserve, as one of Prop. 26's major victims.
Pickman knew of one more immediate effect: Because the measure will work retroactively, it will put a $1 billion hole in the budget where oil companies have been paying a "gas tax swap" since February.
Mother Nature isn't the only one who'll be taking a hit. Bruce Lee Livingston, executive director of the Marin Institute (Alcohol Industry Watchdog), told PR Newswire:
"This is a temporary loss for public health. Instead of every county levying a mitigation fee on Big Alcohol, we'll just have to raise the tax to recover the annual billion dollar tabs for alcohol-related harm in California."
Check back for more analysis on what went wrong -- and who will be paying for the mistake.
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