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Highlights of the 2006 Legislative Year

Dan Carrigg is legislative director for the League and can be reached at carriggd@cacities.org.


Many people thought the Legislature would accomplish little or nothing in 2006, but that was not the case.
 
Following a 2005 legislative session dominated by partisan gridlock and a contentious special election, the political climate was negative. Conventional wisdom was that 2006 promised more of the same; that the politics and positioning over the 2006 governor’s race would eclipse opportunities to make progress. However, buoyed by rising state revenues that helped close the budget gap, Governor Schwarzenegger forged ahead with an ambitious infrastructure investment agenda and encouraged bipartisan agreement on an array of issues. Democrat legislators seized the opportunity to pass major legislation. As a result, the 2006 legislative session was one of the most productive in recent memory. These accomplishments included:
• A $38 billion state infrastructure investment package (Propositions 1A–1E);
• A state budget delivered on time with minimal partisan wrangling;
• Limits on greenhouse gas emissions (AB 32);
• State-issued video franchising (AB 2987); and
• Eight bills, approved in the aftermath of the Kelo decision, that deal with eminent domain and redevelopment.
As is typical of California politics, the voters were asked to decide other major policy issues. A total of 13 ballot measures with major policy impacts was on the November ballot.
The voters passed six infrastructure measures, Props. 1A–1E and Prop. 84, and Prop. 83, which places restrictions on sex offenders. The League supported all of these measures.
The voters rejected six other measures:
• Notification and waiting period prior to termination of minor’s pregnancy (Prop. 85);
• A $2.60 per pack tax on cigarettes for hospital emergency services (Prop. 86);
• Taxation of California oil for alternativeenergy research and programs (Prop. 87);
• Taxation on real property for funding education programs (Prop. 88);
• Political campaign public financing and corporate contribution limits (Prop. 89); and
• Limitation on government regulation of property and eminent domain (Prop. 90).
The League strongly opposed Prop. 90 and supported Prop. 86, but was neutral or had no position on the rest of these measures.
League Strategic Goals: Success in All Categories
In late 2005, the League board of directors outlined three strategic goals for the 2006 legislative session:
1. Expand funding for state and local infrastructure;
2. Expand housing supply and affordability consistent with the League’s smart growth planning policies and protection of local control; and
3. Protect redevelopment funding and authority.
As a result of the combined efforts of many city officials and the League’s advocacy resources, we are pleased to report significant success for each of these priorities. To achieve this outcome, the League employed several strategies and tactics, which are described below.
Progress on Infrastructure
The League aggressively supported and advocated for a state infrastructure in-vestment package. Early in the year, the League’s Infrastructure Task Force made recommendations on an expedited basis to the board in response to the governor’s proposed Strategic Growth Plan. The League also joined a coalition of business groups to circulate an initiative to strengthen protections for Prop. 42, dedicating a sales tax on gas for transportation funding. Through its network of regional representatives, strategic coalitions were built and news conferences were held in support of increased funding for infrastructure. These efforts created leverage that resulted in the Legislature placing Prop. 1A on the ballot as part of the infrastructure bond package.
League lobbyists also worked with key legislators to shape the fine points of the transportation bond, Prop. 1B, including successfully advocating for an additional $1 billion allocated directly to cities. Importantly for all cities, the League lobbied for and achieved a minimum $400,000 out of this $1 billion for allocation to each city, regardless of city population.
In the discussions on legislation related to development in flood plains, the League also emerged as a leader. League policy committees and a special task force shaped a set of principles that influenced the legislative discussions, including support for better local planning. The League also successfully opposed an attempt to shift the state’s legal liability for failed levees to local governments.
When legislative progress on passing a bond package appeared stalled, the League participated in an aggressive paid and earned media effort to highlight the need for infrastructure funding in communities around the state. The message: State leaders should set aside their partisan and policy differences and act jointly to put an infrastructure package on the ballot. The effort was coordinated by the California Infrastructure Coalition; the League is a coalition member, and League Executive Director Chris McKenzie served as chair. League communications and regional staff worked to organize a series of press conferences around the state to draw attention to the importance of state leaders acting quickly to meet deadlines for placing measures on the ballot.
The effort was ultimately successful; while the June ballot deadlines were missed, legislators and the governor got the message. They forged a bipartisan package that won a spot on the November ballot as Props. 1A–1E. As noted earlier, the voters passed all of these measures and Prop. 84, a conservation measure placed on the ballot through the initiative process.
Progress on Housing
Housing was originally not part of the governor’s proposed Strategic Growth Plan, and many legislators did not believe it should be included. Despite those obstacles, the League, working with housing advocates, lobbied strenuously for the inclusion of a housing bond in the final package. These efforts bore fruit: A housing bond, Prop. 1C, was included in the package. This $2.85 billion mea-sure is the largest housing bond in state history, and includes more than $1.3 billion that will be allocated to local governments to assist with infrastructure issues associated with infill housing and transit-oriented development.
On other policy matters, the League was proactive and introduced a package of bills, shaped by its Housing Task Force, aimed at:
• Providing funding for local governments approving housing;
• Protecting communities that already have high-density zoning from being penalized under Density Bonus Law;
• Improving coordination between councils of governments and local agency formation commissions;
• Providing more flexibility for communities to exchange regional housing quotas; and
• Returning more authority over group homes to local government.
Traditional legislative defense was played as well. Through a combination of lobbying activities in Sacramento and local pressure by city officials on key legislators coordinated by the League’s regional representatives, the League was successful in defeating every major bill that would have undercut local land use authority over housing.
Progress on Protecting Redevelopment 
In the aftermath of the Kelo decision, redevelopment agencies and eminent domain authority were under attack. Even though in Kelo the U.S. Supreme Court had actually cited California’s redevelopment laws as an example of appropriate regulation of the use of eminent domain, it did little to quell the stampede of legislative proposals. Some legislators introduced aggressive constitutional amendments to restrict activities necessary for effective redevelopment; others saw opportunities to push agendas such as increasing the housing set-aside by 20 to 50 percent.
The League, working closely with the California Redevelopment Association, educated legislators and community groups about the negative impacts of these proposals. The League’s regional representatives built coalitions at the local level and informed the local press about the many positive impacts of local redevelopment efforts. These combined efforts kept the Legislature from taking rash and emotional actions.
Ultimately, what was signed into law was an eight-bill package of legislation making mostly prudent changes to laws affecting redevelopment and the use of eminent domain.
The major focus in this area however — and the League’s signature accomplishment in ballot measure advocacy — was the 52.4 percent to 47.6 percent defeat of Prop. 90 (the “taxpayer trap”) on the November ballot. The League helped lead the broad coalition effort to educate voters about this severely flawed effort to take away important quality-of-life protections in California communities.
League regional staff worked throughout the summer and fall to help recruit members of the coalition that opposed Prop. 90 and to educate city officials and communities about the harmful effects of the measure. Working in tandem with the campaign, they made numerous presentations to business, community, labor and environmental groups, and helped organize editorial board meetings. These efforts ultimately contributed to securing more than 400 endorsements for the No on Prop. 90 campaign from organizations representing business, labor, homeowner, taxpayer, consumer, agriculture, environmental, good government, local government, public safety and ethnic groups. By Election Day, 82 news outlets had editorialized against Prop. 90.
As gratifying as the defeat of Prop. 90 was, however, those involved with the campaign understand that the failure of the measure stemmed principally from two factors. First, the sponsors of the measure — having spent $1.5 million to gather the signatures to place the measure on the ballot — failed to invest in a serious campaign in the fall. Second, the election results demonstrated once again that the voters are inclined to vote “no” when they suspect that initiatives, like Prop. 90, are based on a cynical attempt to deceive and confuse.
As League President Maria Alegria said, “The voters showed us once again that they’re not easily fooled. They understood that this measure would have undermined our efforts to rebuild California’s infrastructure and build the affordable housing our cities need.”
The League and city officials are aware that there continues to be strong concern among a majority of voters to protect homeowners by reforming eminent domain laws. The League believes that re- form is needed to address this concern and will continue to work with the Legislature on this issue in 2007, to present meaningful changes in eminent domain law to the voters.
The State Budget: Another Bright Spot for Cities
In recent years, news for cities involving the state budget was usually negative, but in 2006, the post-Prop. 1A (of 2004) trend of budget improvement for cities continued. Highlights included:
• The end of the two-year property tax transfers stemming from the Prop. 1A agreement. Cities no longer had to transfer their share of a total $350 million from cities and $250 million from redevelopment agencies to offset state budget expenses.
• Full state funding for Prop. 42 for FY 2006–07 at $1.42 billion. The budget included an additional $1.41 billion repayment for funds borrowed from cities and counties in FYs 2003–04 and 2004–05.
• $232 million in funding for state mandate claims and reimbursements, plus an additional $170 million in payments to cover two years of a 15-year repayment plan for previous mandate claims owed to local government.
• $35 million for cities to reimburse them for booking fees paid by cities to counties. This is part of a larger accord between counties, cities, sheriffs and police chiefs on this issue.
• $238 million in COPS/Juvenile Justice Grants.
AB 2987: Cable Video Franchising
Dogged efforts by the League’s advocacy staff, city officials and coalition partners were ultimately successful in achieving amendments to strengthen protections for cities and consumers on AB 2987, the intensely fought telecommunications reform measure that establishes a statewide franchise for cable and video services. This new law requires future video franchises to be issued by the California Public Utilities Commission instead of local governments. 
The League led an impressive effort to educate city officials about this complex issue, and adopted policies. Local governments were successful in several policy areas, securing amendments to better protect local franchise fees and public rights-of-way, ensuring environmental review and mitigation through the California Environmental Quality Act (CEQA), and retaining existing Public/Educational/Government (PEG) channels.
The League also lobbied hard for improved build-out requirements to make sure telecom corporations did not “cherry pick” the affluent neighborhoods. The final build-out language is viewed by other states and in Congress as far surpassing anything the telecommunications industry has previously agreed to. Many technical implementation issues remain unresolved, and these will no doubt require continued legislative clean-up as the state takes on the job of issuing video franchises.
Looking Ahead in 2007
The 2007 legislative session is expected to be another busy one for California. Political positioning has already begun over how to close an estimated $5 billion structural state budget gap, and many stakeholder groups are lining up to compete for the various funding pots in the infrastructure bond package. Debates about prison overcrowding, healthcare, workers’ compensation, pension reform, sex offenders, eminent domain, land use, housing and other issues will continue in committee rooms and legislative chambers. While Gov. Schwarzenegger has been re-elected for another four years, term limits have ushered out many legislators, and a newly elected group is taking their places. For the first time ever, both houses of the Legislature will contain a majority of former local elected officials.
In 2007, the League is continuing its strategic work on infrastructure and housing. Given the narrow defeat of Prop. 90, it’s important to be proactive on the issue of eminent domain so that any reforms address the public concerns raised by Kelo, while preserving the ability to improve local quality of life by renovating deteriorated and blighted urban areas. The League’s goals for 2007 are:
• Infrastructure. Ensure fair and effective implementation of the 2006 infrastructure bonds, consistent with the needs of California cities.
• Eminent Domain. Adopt statutory and constitutional reforms of the laws governing the use of eminent domain for private economic development purposes.
• Affordable Housing. Expand the supply of affordable housing by adopting reforms that reduce the barriers to improved planning and expand the financial resources available.
City officials are urged to remain engaged in this strategic work by tracking legislative issues through the League website (www.cacities.org) and its weekly electronic newsletter Priority Focus, and by working with their regional representative to establish and maintain good relations with their legislators.