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Home My WebLink About55B - RESO - OPPOSE CA PROP 32REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 1, 2012 TITLE: RESOLUTION IN OPPOSITION TO CALIFORNIA PROPOSITION 32 ITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1St Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER Consider adopting a resolution opposing California Proposition 32. DISCUSSION The City Council has expressed an interest in declaring a position on Proposition 32, a State of California initiative set for voter consideration on the 2012 General Election on November 6, 2012 ballot. Proposition 32, referred to as the Political Contributions by Payroll Deduction. Contributions to Candidate. Initiative Statute has been labeled as the "Stop Special Interest Money Now" initiative that will all but eliminate the historic means of unions for collecting political funds through payroll deductions. Proposition 32 ostensibly does the same for corporations, but corporations rarely use payroll deductions to collect political funds, instead drawing such funds from their profits, and that source of funding is deliberately left uncovered. Furthermore, if approved, it is believed to dramatically undercut the ability of unions to champion and otherwise support social and political causes of significance to working families and their quality of life. The non-partisan League of Women Voters of California and Common Cause of California groups have closely reviewed and strongly criticized Proposition 32, with the League of Women Voters saying, "this initiative is not at all what it seems. Prop 32 promises 'political reform,' but is really designed by its special-interest backers to help themselves and harm their opponents. Despite its proponents' claims, it won't take money out of politics. FISCAL IMPACT There is no fiscal impact associated with this item 55B-1 55B-2 9/12/12 SRC RESOLUTION NO. 2012-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA OPPOSING PROPOSITION 32 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: WHEREAS, Proposition 32, labeled as the "Stop Special Interest Money Now" initiative, is on California's November, 2012 ballot; and WHEREAS, Proposition 32 does not truly address the influence of special interests in campaigns; and WHEREAS, Proposition 32 all but eliminates the historic means of unions for collecting political funds through payroll deductions - Proposition 32 ostensibly does the same for corporations, but corporations almost never use payroll deductions to collect political funds, instead drawing such funds from their profits, and that source of funding is deliberately left uncovered by Proposition 32; and WHEREAS, Proposition 32, if approved, would dramatically undercut the ability of unions to champion and otherwise support social and political causes of significance to working families and their quality of life; and WHEREAS, Proposition 32 exempts many companies (including LLCs, LPs and LLPs) from the ban on direct candidate contributions, and places no limits on Super PACs and Independent ExpendiL'ure Committees and their ability to spend unlimited funds (without directly contributing) for or against statewide candidates and initiatives - consequently, Proposition 32 would upend any realistic opportunity for an electoral even playing field; and WHEREAS, the non-partisan League of Women Voters of California has closely reviewed and strongly criticized Proposition 32, with the League of Women Voters saying, "this initiative is not at all what it seems. Prop 32 promises 'political reform,' but is really designed by its special-interest backers to help themselves and harm their opponents. Despite its proponents' claims, it won't take money out of politics. That's why we urge a No vote," and WHEREAS, the non-partisan Common Cause of California likewise has closely reviewed and strongly criticized Proposition 32, stating, "We can all agree, Sacramento has too much special interest influence, and the money spent on political campaigns has caused all of us to mistrust the campaign finance system, but Prop 32 is trying to use our anger and mistrust to change the rules Resolution No. 2012-XXX 55B-3 W12/12 SRC for the benefit of already powerful interests - not the benefit of all Californians. Voters should take a close look to avoid being fooled," and NOW, THEREFORE, BE IT RESOLVED, Section 1. That the City Council of the City of Santa Ana urges opposition to Proposition 32. ADOPTED this day of _ , 2012. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Bv: Sonia R. Carvalho City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of Council, do hereby attest to and certify the attached Resolution No. to be the original resolution adopted by the City Council of the City of Santa Ana on , 2012. Date: The Clerk of Council City of Santa Ana Resolution No. 2012-XXX 55B-4 PROPOSITION POLITICAL CONTRIBUTIONS BY PAYROLL DEDUCTION. 32 CONTRIBUTIONS TO CANDIDATES. INITIATIVE STATUTE. OFFICIAL TITLE AND SUMMARY PREPARED BY THE ATTORNEY GENERAL POLITICAL CONTRIBUTIONS BY PAYROLL DEDUCTION. CONTRIBUTIONS TO CANDIDATES. INITIATIVE STATUTE. • Prohibits unions from using payroll-deducted funds for political purposes. Applies same use prohibition to payroll deductions, if any, by corporations or government contractors. • Permits voluntary employee contributions to employer-sponsored committee or union if autho_ized yearly, in writing. • Prohibits unions and corporations from contributing directly or indirectly to candidates and candidate- controlled committees. • Other political expenditures remain unrestricted, including corporate expenditures from available resources not limited by payroll deduction prohibition. • Prohibits government contractor contributions to elected officers or officer-controlled committees. Summary of Legislative Analyst's Estimate of Net State and Local Government Fiscal Impact: • Increased costs to state and local government---potentially exceeding $1 million annually-to implement and enforce the measure's requirements. ANALYSIS BY THE LEGISLATIVE ANALYST BACKGROUND Political Refomn Act. California's Political Reform Act of 1974, an initiative adopted by the voters, established the state's campaign finance and disclosure laws. The act applies to state and local candidates, ballot measures, and officials, but does not apply to federal candidates or officials. The state's Fair Political Practices Commission (FPPC) (1) enforces the requirements of the act, including investigating alleged violations, and (2) provides administrative guidance to the public by issuing advice and opinions regarding FPPC's interpretation of the act. Local Campaign Finance Laws. In addition to the requirements established by the act, some local governments have campaign finance and disclosure requirements for local candidates, ballot measures, and officials. These ordinances are established and enforced by the local government. Political Spending. Many individuals, groups, and businesses spend money to support or oppose state and local candidates or ballot measures. This political spending can take different forms, including contributing money to candidates or committees, donating services to campaigns, and producing ads to communicate opinions. Under state campaign finance laws, there are three types of political spending: Political Contribnuions. The term political "contribution" generally includes giving money, goods, ^ ^rvices (1) directly to a candidate, (2) at the request of a candidate, or (3) to a committee that uses these resources to support or oppose a candidate or ballot measure. Current law limits the amount of political contributions that individuals, groups, and businesses may give to a state candidate (or to committees that give money to a state candidate). In 2012, for example, a i individual, group, or business could contribute up to $26,000 to a candidate for Governor and up to $3,900 to a candidate for a legislative office. In addition, current law requires political contributions to be disclosed to state or local election officials. Independent Expenditums. Money spent to communicate support or opposition of a candidate or ballot measure generally is considered an independent expenditure if the funds are spent in a way that is not coordinated with (1) a candidate or (2) a committee established to support or oppose a candidate or a ballot measure. For example, developing a television commercial urging voters to "vote for" a candidate is an independent expenditure if the commercial is made without coordination with the candidate's campaign. Current law does not limit the amount of money indivie.-,ais, groups, and businesses may spend on independent expenditures. These expenditures, however, must be disclosed to election officials. 28 1 Title and Summary / Analysis 55B-5 PROP POLITICAL CONTRIBUTIONS BY PAYROLL DEDUCTION. 32 CONTRIBUTIONS TO CANDIDATES. INITIATIVE STATUTE. ANALYSIS BY THE LEGISLATIVE ANALYST • Otber Political Spending. Some political spending is not considered a political contribution or an independent expenditure. This broad category includes "member communications"-spending by an organization to communicate political endorsements to its members, employees, or shareholders. This spending is not limited by state law and need not be disclosed to election officials. Payroll Deductions. Under limited circumstances, employers may withhold money from an employee's paycheck. The withheld funds are called "payroll deductions." Some common payroll deductions include deductions for Social Security, income taxes, medical plans, and voluntary charitable contributions. Union Dues and Fees. Approximately 2.5 million workers in California are represented by a labor union. Unions represent employees in the collective bargaining process, by which they negotiate terms and conditions of employment with employers. Generally, unions pay for their activities with money raised from (1) dues charged to union members and (2) fair share fees paid by non-union members who the union represents in the collective bargaining process. In many cases, employers automatically deduct these dues and fees from their employees' paychecks and transfer the money to the unions. Payroll Deductions Used to Finance Political Spending. Many unions use some of the funds that they receive from payroll deductions to support activities not directly related to the collective bargaining process. These expenditures may include political contributions and independent expenditures-as well as spending to communicate political views to union members. Non-union members may opt out from having their fair share fees used to pay for this political spending a,id other spending not related to collective bargaining. Other than unions, relatively few organizations currently use payroll deductions to finance political spending in California, PROPOSAL The measure changes state campaign finance laws to restrict state and local campaign spending by: • Public and private sector labor unions. • Corporations. • Government contractors. For text of Proposition 32, see page 93. CONTINUED These restrictions do not affect campaign spending for federal offices such as the President of the United States and members of Congress. Bans Use of Payrol: Deductions to Finance Spending for Political Purposes. The measure prohibits ,nni•??,s, corporations, government contracts .s, and state and local government employers from spending money deducted from an employee's paycheck for "political purposes." Under the measure, this term would include political contributions, independent expenditures, member communications related to campaigns, and other expenditures to influence voters. This measure would not affect unions' existing authority to use payroll deductions to pay for other activities, including collective bargaining and political spending in federal campaigns. Prohibits Political Contributions by Corporations and Unions. The measure prohibits corporations and unions from making political contributions to candidates. That is, they could not make contributions (1) directly to candidates or (2) to committees that then make contributions to candidates. This prohibition, however, does not affect a corporation or union's ability to spend money on independent expenditures. Limits Authority of f Government Contractors to Contribute to Elected Officials. The measure prohibits go -rnmcnt contractors (including public sector lab,)r unions with collective bargaining contracts) from making contributions to elected officials who play a role in awarding their contracts. Specifically, government contractors could not make contributions to these elected officials from the time their contract is being considered until the date their contract expires. FISCAL EFFECTS The state would experience increased costs to investigate alleged violations of the law and to respond to requests for advice. In addition, state and local governments would experience some other increased administrative costs. Combined, these costs could exceed $1 million annually. Analysis I 29 55B-6