Ballot Initiatives

By Leslie Parrish, Senior Researcher, Center for Responsible Lending

On Tuesday, Ohio and Arizona voters not only selected leaders to deal with the credit crisis on the national stage, they also roundly rejected ballot initiatives sponsored by the payday lending industry in an effort to curtail high-cost lenders from preying on vulnerable families.

My organization, the Center for Responsible Lending, advocates for reasonable interest rate caps that apply to all small loan products, including payday loans. While these loans are marketed as a quick and easy way to deal with an occasional unexpected expense, their high cost and short two-week term typically cause borrowers to become trapped in a cycle of debt where they must take out a new loan every pay period. The average borrower takes out more than eight loans a year (usually on a consecutive basis) at the cost of around 400% APR. More often than not, borrowers ultimately end up paying more in fees than they actually receive in credit.

In this morning's LA Times, Bob Stern and Tracy Westen of the Center for Governmental Studies offer some suggestions for reforming California's initiative process. These ideas are drawn from CGS's excellent report on the process. They include providing voters with better information on initiative, expanding the amount of time needed to get measures on the ballot, requiring any measure that establishes a super-majority for something to pass by the same super-majority, and making it possible for initiative sponsors to withdraw an initiative, even after signatures are filed, if a compromise is reached with the legislature. Those are fine ideas, but they are, at root, half-measures that only make minor changes in a deeply flawed process. And they don't respond to the main problem that Stern and Westen identify, particularly the over-use of ballot initiatives as a tool of policy making. In fact, by making it easier to qualify measures for the ballot with a time limit, and making withdrawal easier, Stern and Westen's plan would likely increase the number of initiatives on the ballot. (That number is already going up).

Political consultant Fiona Hutton, of Fiona Hutton & Associates, worked on the campaign to defeat Prop 2, the Humane Society initiative on farm animal regulation. It passed. So did Prop 8, the same-sex marriage ban. And she writes to say she is wondering what this says about California voters:

"Whether you voted for John McCain or Barack Obama, consensus is that we Americans experienced something historic and amazing at the national level. It was all about change and calls for equality.

Many of us, however, are scratching our heads at the decisions that California voters made on November 4th. Californians chose to protect the rights of chickens, but not the rights of committed gay partners. Contrary to what pundits are saying, we didn’t really experience “social change” here in California. And, according to some peoples’ perspectives, we didn’t really vote for social compassion.

Couple this puzzling scenario with the shopping spree voters went on, approving a bagful of bond and tax measures that further saddle our state and local jurisdictions with significant levels of new debt. Aren’t we in the worst economic crisis in recent history? Isn’t our state broke? Voters seemingly made no connection between the ballots they cast and our state’s overdrawn bank account.

We experienced some version of voter schizophrenia that is tough to explain. There was just no consistency. As political professionals, we look for trends and ideological sweeps but really it’s very individualized when voters enter a voting booth.

It was a brutal night for those who believe in marriage equality. Bans on same-sex marriage were enacted by voters in Florida, Arizona and California. In Arkansas, a measure to ban adoptions by persons cohabitating outside marriage was approved. (Pro-life groups backed this anti-adoption measure, by the way). What to do?

The long-term prospects for gay couples who want to marry remain good, despite these setbacks. But same-sex marriage supporters need to figure out how to speak to those who are wary of changing the legal definition of marriage -- but are sympathetic to the needs of gay folks. I think there needs to be particular attention to developing a way of talking to people of faith whose churches are adamantly opposed to same-sex unions. The separation of church and state arguments, even the anti-discrimination arguments, are valid and have their strengths, but I'd like to see something that has a certain religiosity. Gay couples who are themselves devout need to be at the front of this effort. Such couples could explain that for them, marriage is not merely about equality or about love or about getting certain legal protections. it's part of living a Godly, moral life. By getting married, they don't wish to change the sacred tradition of marriage, they want to honor that tradition.

DENVER - If you thought the credit crisis, the recession, municipal budget deficits, state budget deficits, federal budget deficits and the $10 trillion federal debt might cure Americans of their love of borrowing, you thought wrong.

New exhibits come in the results of last night's 153 ballot propositions around the country. Fifteen bond measures were on ballots, and 14 passed. Only T. Boone Pickens' Prop 10, a $5 billion general obligation bond, failed. The biggest bond to pass -- it constituted $9 billion of the more than $13 billion approved nationwide -- was Prop 1A in California, a high-speed rail bond. Voters narrowly approved it, even though there is no coherent plan to spend the money.

Winners:

Political reform. In California, the big longshot -- redistricting reform, which has a near perfect record of losing at the ballot -- came in. Prop 11, which strips the legislature of the right to draw state legislative districts (Congressional districts were exempted) -- passed. It's a stunning win (and one your blogger predicted would not happen). This redistricting measure is a modest reform, but the victory suggests that political reform on the ballot may be possible -- at least if there isn't much of a campaign against it. Look for future measures on open primary and perhaps other reforms. And in Colorado, Prop 54 -- which had little money and faced a huge, expensive, labor campaign againts it -- also appears to have scored a triumph. The measure is a tight ban on "pay to play." If a company or union has a contract with the government, it can't give money. Labor leaders here in Denver last night say they will challenge it in court.

The initiative process. Voters turned down the greatest in the country to the initiative process, Arizona's "majority rules" measure, which would have established a near impossible standard for passing an initiative: a majority of all the state's registered voters (not just the voters who show up on election day). Measure O, a legislative referendum to make it more difficult to qualify an initiative to change the state constitution, also went down.

Your blogger is spending election day in Colorado, following results of the 18 measures on the state ballot here. I've also been showing around 10 foreign visitors -- academics, journalists, activists -- who study, write about or are involved in the initiative and referendum process in other countries.

Colorado is a crucial swing state in the presidential campaign. John McCain is even campaigning on election day here, holding a rally in Grand Junction, on the western side of the state. But it's also been the site of a bitter business vs. labor battle, with both groups qualifying multiple measures for the ballot. Four weeks ago, however, some business groups and labor unions negotiated a limited peace. Business groups agreed to abandon support for thier measures and even campaign against three of the business-backed measures--most notably Measure 47, an initiative to make Colorado a "Right to Work" state. In return, labor agreed to "withdraw" four measures. But here's the interesting wrinkle.

Sunday in the Sacramento Bee, I wrote about my idea for reforming California's direct democracy. The piece is here. It's part of a weekly feature called "The Conversation." Please contribute your own thoughts on the idea. At root, the idea is to make it easier to qualify referenda -- ballot measures to block an act of the legislature -- for the ballot, and make it harder to qualify and pass initiatives. The idea is to make initiatives, which are common, rare, and to make referenda, which are rare, more common.

Be sure to read not just my piece but the three pieces the Bee solicited to respond to it. The one from Rick Hasen, a prominent election lawyer, details the most common objection from reformers. They don't like the initiative process, but they see it as the only way to enact their reforms. My view is that very little political reform takes place by initiative. In fact, reform has usually been set back by initiative (I don't consider term limits progress--it certainly didn't improve the quality of governance in my state). Please let me know what you think.

A new Field Poll out this morning in California has news on four ballot props.

-Prop 2, the initiative regulating farm animal confinement, appears headed to an easy win. This would be another big initiative victory for those champions of direct democracy, the Humane Society of the United States.

- Prop 8, the ban on same-sex marriage, is gaining. In the last Field Poll, it had 38 percent support versus 55 opposed. Now the numbers are 44 yes, 49 no. Too close to call.

-Prop 11, the redistricting initiative, has a real chance, and that's news. Redistricting has a long record of failure at the ballot. It has support of 45 percent, opposition from 30 percent of voters. That's a huge undecided vote, reflecting broad confusion about what the measure does. The good news for advocates of redistricting reform is that some of their opposition has turned to undecided.

-Prop 7, an initiative to raise state standards for renewables, appears to be toast. It's lost massive support, from 63 percent in July to 39 percent in this poll.

The full poll is here.

The Wall Street Journal takes a look at efforts by the pay day lending industry to use ballot initiatives to fight off regulation.