by Peter Quist | 2010-02-03
Executive Summary
In the 2008-09 fiscal year, California faced the largest state budget shortfall in U.S. history. Part of the deal lawmakers reached to close the gap involved placing six measures on the May 2009 ballot to help address budgeting issues in the future. Sixteen committees raised almost $40 million to fight for and against these measures in a battle that would have multi-billion dollar implications as quickly as the 2009-10 fiscal year. Contributions from labor interests dwarfed those from other economic sectors on both sides of the measures, giving 44 percent of the money raised in support of the measures and 62 percent of the money raised in opposition.
Übersicht
Last May, Californians rejected five of the six measures that the legislature placed on the ballot to help address the looming budget shortfall. The propositions addressed various issues: 1A would have increased the "rainy day" fund to cushion against future shortfalls, 1B would have provided funding to schools and community colleges to make up for some of the funding cuts, 1C would have increased lottery marketing and payouts to try to boost income, 1D and 1E would have redirected funding to and from certain health and mental health programs, and 1F prohibited pay increases for legislators and certain other officials in deficit years. Proposition 1F was the only one that passed.
Although 16 committees raised money to support or oppose these measures, three committees dominated the fundraising by raising three-quarters of the $39.5 million total.1
Teachers' unions and other labor organizations gave $18.6 million overall and led the contributing on each side of these measures, giving $10.3 million to a committee supporting Proposition 1A and Proposition 1B, $2.5 million to committees working to support all six measures, and $4.2 million to committees working to oppose Proposition 1A. Interestingly, the National Education Association and one of its affiliates, the California Teachers Association, gave $12.2 million to two committees supporting Proposition 1A and other measures, while the California Faculty Association (another National Education Association affiliate) gave $1.9 million to oppose Proposition 1A. In addition, the American Federation of State, County and Municipal Employees (AFSCME) and one of its affiliates also lined up across from each other; the national AFSCME opposed Propositions 1A, 1D and 1E, giving a total of $401,100, and AFSCME California gave $165,000 in opposition to Proposition 1A, yet AFSCME Local 2620 in Los Angeles supported all of the measures, giving a total of $9,800.
Contributors from within the state gave $32.5 million, or 82 percent of the money raised around the measures. Committees supporting one or more measures raised 80 percent of their money from within California's borders; committees opposing one or more measures raised 94 percent of their money from in-state sources. Of the $7 million that came from outside the state's borders, $3.4 million came from two labor union organizations in Washington, D.C.: the National Education Association gave $3 million to support Propositions 1A and 1B; the American Federation of State, County and Municipal Employees gave $401,100 to oppose Propositions 1A, 1D and 1E.
Individuals gave only $5.1 million of the money raised, compared to $33.2 million given by labor organizations, businesses, committees, foundations and other organizations.2 Committees supporting the measures raised 86 percent of their money ($28.1 million) from non-individuals, while committees opposing measures raised 72 percent of their money ($5.1 million) from non-individuals.
In all, committees supporting one or more measures garnered $32.6 million of the $39.5 million raised, boosted by large contributions from labor groups such as the California Teachers Association, the National Education Association and the California State Council of Service Employees. Committees opposing one or more measures raised $6.9 million, due largely to the $4.3 million given by the California Faculty Association, the California State Council of Service Employees, and other labor groups.
To say last year was a difficult budget year in California would be a gross understatement. In February 2009, state lawmakers had to close a $42 billion budget shortfall, the largest shortfall in any state in U.S. history.3 They also placed the six measures on the ballot for a May vote, to further help the state's budget situation.4 In March, the California Department of Finance projected that California would face another budget crisis for the upcoming 2009–10 fiscal year that would require it to borrow more than $13 billion in short-term funding. This was the equivalent of about 13 percent of the state's receipts—which is more than double the maximum percentage recommended by municipal bond market credit experts—making it likely that California would face a lowered credit rating. Major financial institutions began indicating that the state would have difficulty borrowing $13 billion from the short-term markets on its own credit. Then, on May 7, the Legislative Analyst's Office issued a report projecting the state's borrowing needs would be around $17 billion if the May ballot measures passed, and $23 billion if they failed.5
For more information on the measures, see Appendix A at the end of this report, visit the 2009 California Budget Measures list on this Web site, or take a look at California's 2009 voter guide (pdf).
Methodology
Committees that raise money to support or oppose ballot measures must file campaign-finance reports with the state's disclosure agency. The National Institute on Money in State Politics collected and entered those reports into a database for analysis. Institute staff used the employer and occupation information provided on disclosure reports to assign an economic code to contributors. When that information was not provided, staff members conducted additional research to determine, where possible, a contributor’s economic interest. The occupation codes are based on the Standard Industrial Classification system used by the federal government.
Some committees contributed to each other (See Table 4). Unless specifically indicated, contributions from other ballot committees focused on these budget measures are excluded from figures in this report to avoid inflating the total money raised around these measures.
Unitemized contributions totaled $1.2 million to committees opposing measures and $332 to committees supporting measures. These contributions are excluded from discussions of money raised from individuals or non-individuals.
Contributions are categorized as being from an individual only if the money came directly from a single individual or a couple. The term "non-individual" includes all money from candidate committees, political parties, businesses, nonprofits, and all other organizations.
Money Given in Support of the Measures
The money raised to support these measures totaled $32.6 million, and committees also reallocated more than $3.3 million amongst each other. Budget Reform Now compiled $12.4 million in contributions to support all six measures and received another $3.3 million from other ballot committees supporting these measures. The other committee that raised eight figures was Yes on 1A and 1B, Repay and Protect Our Schools, which raised $10.3 million in contributions and got $33,774 from another ballot committee.