Government Unions, Tech Billionaires and California Ballot Propositions

Californians voted on twelve state ballot propositions on November 3. On nine of these propositions, California’s government and private sector unions spent significant amounts of money, over a million in five cases, and over ten million in two cases. But of these nine, the unions only got their way on one of them, Prop. 19, which changed some of the rules on how property taxes are applied. And Prop 19 was not a high priority for the unions, with barely over $100,000 in contributions, mostly from Firefighter unions. The big bucks in favor of Prop. 19, over $41 million, came from the real estate industry.

And if it weren’t for Prop. 19, California’s unions would have logged a perfect record on November 3, losing every battle. The real story on November 3 is that California’s tech moguls, and big business, in that order, are willing and able to spend California’s unions into the ground when they decide that’s what is necessary to protect their interests. Before reflecting on the implications of that staggering fact, it’s worth having a closer look at some of the battles.

The chart shown below summarizes total spending in support and in opposition to the twelve ballot propositions on November 3. As reported by the California Secretary of State, unions, mostly government unions, spent $68 million on ballot propositions. That is based on information updated through October 17, and does not include in-kind contributions, so the actual spending was higher. The biggest fight, by far, was in support of Prop. 15, which would have required commercial properties to be reassessed at current market values for assessing property taxes.

It’s no secret why passing Prop. 15 was a priority for government unions. Ever since the legendary Prop. 13 was passed back in 1978, it has been blamed for government budget deficits in California. Leaving aside the fact that administrative bloat, mismanaged overtime, and financially unsustainable pensions are the real reason for budget deficits, or the fact that inflation adjusted tax revenues in California have always kept pace with population growth despite the impact of Prop. 13, the relatively low property taxes that businesses pay in California is one of the last, if not the last, competitive advantage left for business in what is otherwise the most hostile business climate in America.

Protecting California’s businesses, however, is not a priority these days for California’s unions. The California Teachers Association, the California Federation of Teachers, and the Service Employees International Union (SEIU) joined with their local chapters and other unions to pony up nearly $38 million to push Prop. 15. And joining these union in a rare defeat was over $10 million in funding from the Chan Zuckerberg Initiative Advocacy PAC. Zuckerberg’s PAC, along with other Zuckerberg controlled entities, drenched the political soil across America this election season, including $400 million to “get out the vote” in key swing states. But when you’re able to spend $400 million the way most of us buy a cup of coffee, you can water the world.

As the last few election cycles are making increasingly obvious, if you pair the deep pockets of government unions with the even deeper pockets of big tech, you’re going to get whatever they want. But Prop. 15 was an existential threat that backed California’s businesses, big and small, into a corner. Apparently not all of them are ready to flee to Texas, because led by the California Small Business Roundtable that kicked in $31.7 million, they came up with just over $60 million in opposition spending. Prop. 15 failed, only getting 48 percent of the vote. This time.

There were other mega-fights on November 3, most notably, the limited war waged by big tech against AB 5, which took the form of Prop. 22. Limited war, because instead of repealing AB 5, a smashmouth union power play that turned most of California’s over two million independent contractors into employees overnight, the big tech rideshare companies chose to only bail themselves out.

It wasn’t as if these companies didn’t have the wherewithal to come up with a more comprehensive reform. The war chest they amassed in support of Prop. 22 was almost ridiculous – almost, because nothing is ridiculous any more when it comes to the power of big tech – Uber kicked in $51 million, Door Dash threw down $51 million, Lyft added $47.5 million, Instacart was good for $31 million, and Postmates spent $11.5 million. All told, the rideshare industry raised $192.7 million to protect their interests.

Fighting against Prop. 22 were all the unions, with the biggest contributions coming from the SEIU and the International Brotherhood of Teamsters. Over $16 million of the $18.6 million spent against Prop. 22 came from unions, but it was a lopsided battle from the start. Prop. 22 passed easily, with 58.6 percent of the vote.

Another big spend by unions this election cycle was the SEIU’s support for Prop. 23, which would have imposed new regulations on dialysis clinics and presumably opened the door to unionizing them. But where the SEIU spent almost $9 million, the renal care industry spent a whopping $104 million, with much of this money coming from out-of-state.

One of the most visible of the propositions on the November 3 ballot was Prop. 16, which would have brought back affirmative action. It’s not clear why affirmative action is even required in California, since virtually every established institution in the state desperately adheres to proportional representation whenever possible. And while the unions came up with $1.7 million to support this bill, another $17.5 million came from private donors, including $5.5 million from M. Quinn Delaney – who along with her wealthy husband Wayne Jordan are among California’s premier limousine liberals.

The defeat of Prop. 16 is perhaps one of the most encouraging signs in the 2020 election, because despite being outspent by more than ten-to-one, the opponents prevailed. Californians saw Prop. 16 for what it was, a transparently racist meal ticket for trial lawyers, “equity and inclusion” bureaucrats, and the victim industry, masquerading as anti-racism. With only 42 percent of Californians voting yes, it wasn’t even close.

Another fight worth mentioning was the sad fate of Prop. 20. Losing badly with only 38.3 percent of the vote, it would have restored tougher penalties for drug and property crimes. Backed to the tune of $3.0 million by law enforcement unions, supporters for Prop. 20 were outspent overall, although not by much. Leading the charge against Prop. 20 was $2.3 million from Zuckerberg’s PAC, and $2.0 million from Patty Quillin, whose husband Reed Hastings is the founder of Netflix. This power couple is better known for donating $2.2 million to the victorious campaign of George Gascon, the idiot who destroyed San Francisco, and who is now going to reprise his role as district attorney to destroy Los Angeles.

Overall, unions did not do well on ballot propositions in California this election season, despite maintaining their grip on nearly every other manifestation of political power in the state. The real takeaway is the fact that big tech has consolidated its power and is firmly established as the new top dog in California politics. So far, the decisions they’re making are not encouraging. They looked out for their own, in the case of Prop. 22, ostensibly to protect the rights of their drivers to remain independent contractors, while leaving all the rest still victims of AB 5. Mark Zuckerberg, who has enough money to hire a private security force that could probably defeat the armies of small nations, saw fit to take down Prop. 20, apparently indifferent to the ongoing chaos on the streets of every major city in California.

To conclude with the obvious, how unions and tech billionaires decide they want to influence politics from now on is going to be decisive. But apart from the police unions peeling away from the pack to support Prop. 20, there is no sign that the coalition that already broke California – unions, government bureaucrats, extreme environmentalists, litigators, and liberal activists of every stripe – will be anything but more powerful with the arrival of politically active tech billionaires. There are only two political forces that can match this sort of firepower. Other business interests, when confronting an existential threat, as shown by the massive opposition to Prop. 15 and Prop. 23, and populism, as shown by the landslide rejection of Prop. 16.

In most cases, if they chose to, these special interests could pursue an enlightened course of action. The law enforcement unions were right to back Prop. 20, and they should try again. While the tech billionaires haven’t done much of anything right just yet, it would only take one of them to shake the system. Maybe school vouchers will be the disruptive cause that attracts real money from Silicon Valley. And if the environmentalist leadership listened to their members, instead of just talking down to them and addling their minds, we would already be logging responsibly in California’s forests to thin the tinder, instead of encouraging our feckless governor to cope with wildfires calling for more electric cars.

With only a few exceptions, on the dozen ballot initiatives they faced, California’s voters made the right choices. This is an encouraging development. If only a few more special interests put common sense and the common welfare in front of their blinding ideologies and billion dollar enterprises, the political landscape in this state would swiftly realign.