[How changes to California’s Proposition 13 could reduce
inequality. ] [[link removed]]

WHEN BIG MONEY VOTES, WEALTH GAPS WIDEN  
[[link removed]]


 

Andy Furillo
November 13, 2019
Capital & Main
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
* [[link removed]]

_ How changes to California’s Proposition 13 could reduce
inequality. _

, Urban Design

 

HEADED BY THE RICHEST REAL ESTATE MAN in the United States, the Irvine
Company has provided $1 million in early funding to defeat
California’s Schools and Communities First campaign, a 2020
split-roll property tax initiative that would eliminate the benefits
big landholders have enjoyed since the passage of Proposition 13, the
landmark property tax-slashing measure approved by the state’s
voters in 1978.

Irvine is one of California’s largest commercial property
businesses, owning 65,000 apartments
[[link removed]]
in 125 mostly coastal locations, as well as 125 commercial buildings
and 40 shopping centers, including the Fashion Island complex in
Newport Beach, where the company is headquartered. As such, it has
saved untold millions of dollars in the 41 years since the passage of
Proposition 13, which was sold to voters primarily on its benefits for
homeowners. And Irvine stands to lose a similarly significant if
undetermined sum in the decades to come if the split-roll measure
wins, even though the proposal has been written to exempt residential
holdings such as Irvine’s apartment empire.

The company’s fight to preserve the commercial property protections
of Proposition 13 presents a case study in how corporate and personal
wealth can exacerbate the economic inequality that began to widen in
America about the same time that the California measure kick-started
the nationwide tax revolt. (Disclosure: Several unions belonging to
the Schools and Community First coalition, which is funding the
split-roll measure, are financial supporters of this website.)

While most of the criticism of wealth and income inequality has
focused on policies and tax-avoidance practices that have added to the
riches of Wall Street investors, corporate executives, hedge fund
managers and Big Tech, there is little question that Proposition
13’s inclusion of large commercial businesses has contributed to the
chasm between the top one percent and everybody else – and that a
split property tax roll would figure to change the equation.

Split-roll proponents say that if it succeeds at the ballot box, the
updated, market-rate reassessments on big companies like Irvine that
have benefited from Proposition 13 would provide anywhere from $7
billion to $11 billion in new funding for schools and local
governments.

“A third of that funding would go to schools, and we know that
education makes a huge difference [in incomes],” said Chris Benner,
director of the Everett Program for Technology and Social Change at
the University of California, Santa Cruz,  and co-author of a 2018
study of how a split roll would affect the economy. “Before
Proposition 13, we were in the top tier of quality public schools in
the country. Now we’re in the bottom tier. A great reinvestment in
public schools would make a huge difference. It would also go for
basic public services — so, to the extent that having decent public
services support poor people more than upper-income earners, it could
impact wealth inequality.”

*   *   *

 
INCREASING TAXES ON BIG PROPERTY OWNERS to pay for infrastructure
improvements also would amount to a wealth shift in favor of the
normal-incomed as well as the poor, to the extent that it could create
higher-paying jobs and induce cities to ease off the
“fiscalization” of their land-use decisions, Benner said. Since
Proposition 13, local governments have sought to make up for their
loss of property tax receipts by approving retail developments that
pump up sales-tax receipts, instead of using the land for its
job-producing “best and highest purposes.”

As Irvine opens its vaults to kill split-roll, campaign finance
experts say that the company’s spending presents another example of
big-money political spending that over the past 40 years has
accompanied and fostered the growing income and wealth inequality in
the United States, where the top micro-percentages of the population
have accumulated more and more of the nation’s bounty.

“I don’t think there is any question about the connection,” said
Ann Ravel, the former chair of the state’s Fair Political Practices
Commission and a onetime Federal Election Commission member.

Ravel cited studies that found that at the federal level, more than 90
percent of all laws, policies and other regulations “reflect the
interests of the very wealthy and also corporate interests,” and
that the lawmakers who pass and approve them “are beholden to those
interests.”

Paraphrasing Nobel Prize-winning economist Joseph Stiglitz, Ravel
said, “There will never be any change” in the concentration of
wealth in the United States “until the campaign finance system
changes.”

Derek Cressman, a longtime advocate for campaign finance reform and a
former official with Common Cause and the U.S. Public Interest
Research Group, said he found the connection between political money
and wealth, and income inequality “clear and strong.”

“People with wealth for centuries have found ways of engineering
political structures aimed at protecting and expanding their
wealth,” Cressman said. “It is not just some accident of
marketplace capitalism, but a very concentrated and very well-thought
out strategy by wealthy interests to maintain and deepen their
wealth.”

Craig Holman, a Washington, D.C., a lobbyist for Public Citizen
specializing in money-in-politics issues, noted that on the national
level, spending on federal elections has increased from $1.4 billion
in 1998 to $6 billion in 2018, and is projected to go as high as $10
billion in 2020, with more and more of the money coming from fewer and
fewer sources.

“What does that mean for income inequality?” Holman asked. “That
the super-rich are financing our elections, and it doesn’t take a
leap of faith to understand that these super-rich are not going to be
supporting candidates or public policies that would distribute income
on a fairly equitable basis, and you know that nurtures income
inequality.”

*   *   *

 
THE IRVINE COMPANY’S CHAIRMAN and sole owner, Donald Bren, 87, has a
net worth of $17 billion and ranks 32nd on _Forbes_’ list of richest
Americans, outpacing Los Angeles Rams owner Stan Kroenke and President
Donald J. Trump.

With regard to the pending split-roll measure, Bren’s Irvine Company
early this year gave a million dollars in campaign cash to the No on
Prop 10 committee that ran last year’s anti-rent control campaign,
even though the campaign had been won by landlord interests on
Election Day, 2018. The No on Prop 10 committee then forwarded $1
million to two political firms that are working against the split-roll
measure, Meridian Pacific, Inc., and Apex Strategies. The latter firm
is headed by Tony Russo, the former group senior vice president at the
Irvine Company who now runs his own political consulting business in
Sacramento.

The No on Prop 10 committee paid $150 in expenses to the California
Secretary of State’s Office, gave $335,000 it had left over to the
California Business Roundtable and then it went out of business,
according to the state campaign finance records.

Interestingly, the Irvine Co. last year did not contribute any money
to the No on Prop 10 committee but gave $4 million to the California
Republican Party – which then made more than $5 million in
nonmonetary contributions to No on Prop 10, including more than $3.6
million it spent on services provided by Meridian Pacific.

As of October, the Irvine Co. has spent more than more than $15
million on political campaigns in California over the past 18 years,
according to an analysis conducted for Capital & Main by MapLight, the
nonpartisan Berkeley nonprofit that tracks money in politics with a
focus on identifying outsized influencers. Irvine directed $12.8
million of its spending in large chunks to campaign committees such as
the state GOP, the California Business Roundtable, the California
Apartment Association, the pro-Republican New Majority PAC and, most
recently, to the post-election remnants of the No on Prop 10
committee.

In direct contributions that Irvine made in its own name over the
years to statewide ballot measures, the company’s campaign money
mostly reflected the interests of a mainstream conservative political
player – favoring things like term limits for legislators, opposing
a parcel tax for schools that would have cost it millions and opposing
a 2010 initiative that allowed the Legislature to pass a budget by a
majority vote.

Irvine has shown an edgier side, however, in contributions that it
filters through other donor committees such as the California
Republican Party and the No on Prop 10 campaign, as it has during the
early movements on the split-roll campaign. In 2005, Irvine
distributed more than $400,000 to five committees that spent big on
former Gov. Arnold Schwarzenegger’s failed special election ballot
measures, according to the California secretary of state’s records.
Schwarzenegger’s defeated initiatives would have defunded public
employee unions, made it easier to fire school teachers and put a cap
on state spending, with dire consequences for education spending.

From 2004 to 2012, the company invested $317,500 in the recipient
Small Business Action Committee (SBAC), including $12,500 in 2012 for
a failed electoral attack on unions’ political spending in
California, Proposition 32
[[link removed]].

The same year, the SBAC took in $11 million in undisclosed
out-of-state money that tracked back to a Koch brothers-affiliated
organization in Arizona for the committee’s campaign against the
unions. The state Fair Political Practices Commission investigated the
spending and later fined two Koch organizations a record $1 million
between the two of them to settle the case. Russo, the former Irvine
senior VP, played a major role in the scheme, helping to raise money
that went to a Virginia nonprofit that gave some of it to the Arizona
group that, in turn, contributed the $11 million to the committee SBAC
set up on behalf of Proposition 32.

“I’ve still got the good fortune to have been the only person to
have gone after the Koch brothers and succeeded,” said Ravel, who
chaired the FPPC through the conclusion of the case.

Russo declined to be interviewed for this story. A Russo aide directed
Capital & Main to a spokesperson with Meridian Pacific, who declined
to answer questions about the Irvine Company or Russo. Irvine Company
spokesman Scott Starkey did not return phone messages or respond to
email.

*   *   *

 
THERE’S NOTHING ILLEGAL about donors such as Irvine giving money to
one committee, which then directs the cash to another payee. Asked why
they do it, Cressman, the campaign finance reform advocate, said that
sometimes “it would be politically disadvantageous for voters to
know who was funding a message,” or that it would be
“counterproductive to the message they are trying to send.”

With the petition-gathering still underway, it’s not as if
split-roll advocates will be going into the campaign unarmed. The
Schools and Communities First coalition so far has raised more than $7
million, including $1.6 million from the Chan Zuckerberg Advocacy
nonprofit, more than $1.4 million from teachers’ unions, another $1
million from the San Francisco Foundation and $650,000 from the
Service Employees International Union. Almost all of the money has
gone toward petition-gathering, with half of it spent on a scrapped
first effort that campaign officials rewrote to exclude smaller
businesses and others from the measure’s coverage.

The opponents’ Californians to Stop Higher Property Taxes campaign,
meanwhile, is just beginning to gather steam. It is sponsored, among
others, by some of the Irvine Company’s long-time favored recipient
committees, such as the California Business Properties ($350,000 from
Irvine over the past 18 years), the California Chamber of Commerce
($376,500) and the Howard Jarvis Taxpayers Association ($305,000). By
the time all the contributions are counted, that first million from
the Irvine Company may not amount to much more than a down payment, no
matter how its campaign money finds its way into the action.

_Andy Furillo is a writer and communications consultant in Davis,
Calif. He worked in the newspaper business for 44 years, for the
Sacramento Bee, the San Francisco Examiner, the Los Angeles Herald
Examiner, the Los Angeles Times, and smaller dailies in Downey,
Goleta, Santa Barbara and Santa Maria._

_MapLight contributed research to this story._

_Copyright Capital & Main.  Reprinted with permission._

*
[[link removed]]
*
[[link removed]]
*
* [[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web [[link removed]]
Submit via email
Frequently asked questions [[link removed]]
Manage subscription [[link removed]]
Visit xxxxxx.org [[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]