An election year has concluded and while voters in most states signaled their desire to move (or stay) on the right side of the ideological spectrum, California held firmly to its position as the nation’s largest and strongest bastion of liberal policies and politics.
Voters continued to pour cement on an already formidable foundation of liberal policy, for example approving Proposition 55, which extends for another 12 years the “temporary” personal income tax increases imposed on upper-income earners that began with approval of Proposition 30 in 2012. As we noted in announcing WG’s opposition to Prop. 55, California’s tax structure is overly dependent on the highest income earners and their volatile and unpredictable incomes from year to year. This is a principal cause of budget calamities in Sacramento every time the nation’s economy sneezes. We called for the state’s elected leaders to “facilitate a serious discussion that leads to greater revenue predictability and stability.” The voters—informed by a landslide of political television ads funded by public education unions—instead doubled down on tax volatility.
In the state legislature, voters elected representatives in all 80 Assembly districts and 20 of the 40 state senate districts. The headlines here were all about the “supermajority.” Coming into the election, Democrats sought to build on their already large majorities to reach two-thirds supremacy in each chamber, giving them the ability—on paper, anyway—to pass tax increases and emergency legislation, place state constitutional amendments on the ballot, and override gubernatorial vetoes. As long as Republicans hold more than one-third, they can block the majority party on these matters.
In the Assembly, Democrats protected their own and knocked off three Republicans, moving to a 55-vote supermajority, one vote above two-thirds. In the state Senate, Democrats picked up one seat and reached two-thirds with no additional cushion.
For business interests, the thought of a Democrat supermajority in Sacramento understandably causes chills, but the practical implications are less than clear.
Democrats won supermajorities in both houses of the legislature in 2012, but then, like now, their margins were thin, and Senate Democrats lost their supermajority within a year as corruption charges resulted in the removal of three senators from the floor. But even when they had the supermajority in both houses, Democrat leaders were unable to use it. Moderate Democrats, especially in the Assembly, were never willing to provide the “aye” votes necessary to pass tax increases or other measures that ran counter to their job-growth positioning.
Fast forward to the incoming 2017-18 legislature. The moderate Democrats will again be front and center, and there is much to analyze.
On the positive side, this year’s elections saw several more business-oriented Democrats defeat liberal opponents in the November runoffs under our state’s top-two primary system. Two good examples: In the state Senate, Assemblyman Bill Dodd defeated former Assemblywoman Mariko Yamada for an open seat in Yolo, Solano and Napa counties. Dodd has proven to be a strong supporter of business and agriculture, while Yamada consistently supported United Farm Workers’ legislation. In the Assembly, Democrat Tim Grayson won an East Bay open seat with the support of business interests, defeating a labor-backed Democrat.
This encouraging news is tempered by the performance of the moderate Democrats during the legislative session that ended in September. Moderates were very helpful on some issues, particularly in blocking bills to unreasonably restrict crop protection tools. And they showed strength and resolve in defeating the UFW’s overtime bill on the Assembly floor in June. Unfortunately, that resolve eroded in the final week of the session as that bill came back following an unseemly resurrection in the Senate. Political pressure applied by Speaker Anthony Rendon on behalf of the UFW peeled just enough moderates away, and the bill passed.
A broader coalition of business interests (including WG) was similarly disappointed by the support of moderates to pass another pair of climate change bills, which will further expand California-only energy costs that hit business bottom lines.
California’s business community thus prepares for 2017 knowing that it must create stronger political ramparts to protect pro-business Democrats from attacks by unions, environmental activists and others on the left. Just as critical, we must develop aggressive 2018 campaign plans now that can restore moderation in some of the legislative districts where it has gone missing.
