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Stay-at-Home Orders Halt State Moves on Sports Bets, Taxing Rich

April 1, 2020, 8:00 AM

A Michigan bid to raise taxes on the rich hits the rocks. A proposed amendment allowing sports betting at Indian casinos in California stalls. An effort to bring light to how political ads are funded in Arizona is suspended.

Across the country, stay-at-home decrees are blocking the most essential part of efforts to get these proposals on ballots in November: Gathering signatures in person. The virus is preventing organizers from courting supporters in supermarkets and shopping malls just as deadlines loom.

“The coronavirus is a huge blow to direct democracy,” said Fred Kimball, president of Kimball Petition Management, a California signature-gathering company. “I’ve never seen anything like it – never. Usually I’m the guy they call to fight through this and get a lot of stuff done at the last minute, but this year there’s nothing I can do.”

Proposition 13

California is among 24 states with initiative systems enabling voters to sidestep legislatures and place statutory changes and, in some places, constitutional amendments on ballots.

The first state to adopt an initiative system was South Dakota in 1898, and since then states from Florida to Oregon have followed. California’s landmark 1978 measure limiting escalation of property taxes, Proposition 13, spawned a national movement and accelerated adoption of what advocates call direct-democracy initiative campaigns around the country.

“There’s no question that the pandemic changes the strategy advocacy organizations are using to affect issues,” said Michael Latner, political science professor at California Polytechnic State University. “The work of these groups is going out, canvassing, meeting people and gathering support, and all that has to stop.”

Signatures Are Everything

When signature drives stall, proponents are left with little recourse other than to wait until hand-to-hand canvassing is permitted again.

Advocates can approach lawmakers about endorsing their ideas and introducing them as bills in state legislatures, said Wendy Underhill, director of elections and redistricting for the National Conference of State Legislatures. But in many cases proponents of ballot measures have already tried that path and found it unworkable.

Initiatives require physical signatures that can be scrutinized and verified -– online signature-gathering isn’t permitted. While well-financed campaigns can try to shift to direct mail or online outreach, such methods are far less efficient than canvassing and more expensive, Latner said.

Signature-gathering campaigns that have been suspended this year include an effort to identify donors behind political ad campaigns in Arizona, graduated-tax and lobbying-reform in Michigan, medical marijuana legalization in Nebraska, a citizen redistricting commission in Arkansas, a gun-control initiative in Oregon, a $5.5 billion bond issue for stem-cell research and a constitutional amendment permitting sports betting on Indian reservations in California, and many others.

“In keeping with the governor’s statewide order for non-essential businesses to close and residents to remain at home, we’ve suspended all signature gathering for the time being,” said Sarah Melbostad, spokeswoman for the California stem-cell campaign, adding that the group believes it still has time to qualify.

Read More: Uber Loses Early Challenge to California Gig-Worker Law

Some campaigns have already gathered the required number of signatures and appear likely to qualify. Those include a California proposal backed by ride-sharing companies Uber Technologies Inc. and Lyft Inc. to allow drivers to continue to be designated as independent contractors, rather than employees, while providing them with new benefits.

The proposal was designed to counter a state law that took effect in January that aims to force companies, including Uber and Lyft, to treat more workers as employees who entitled to paid sick days and minimum wage, among other benefits.

“We gathered more than a million signatures in seven weeks,” said Stacey Wells, spokeswoman for the campaign. “We didn’t know the coronavirus was coming. We had a lot people who were eager to sign and a thousand drivers who wanted to gather signatures.”

The number of signatures needed and the deadlines for submitting signatures vary by state. In California, the functional deadline for submission of signatures to qualify for the November ballot is April 21, Kimball said. That allows counties and then the secretary of state’s office to review and verify signatures.

Earlier: California Will Be Key Battleground in Tech Privacy Fight in 2020

California requires 623,212 valid signatures for an initiative to be placed on the ballot and 997,139 to qualify a constitutional amendment. In any drive, hundreds of thousands of signatures turn out to be duplicates or are otherwise deemed invalid, Kimball said, so campaigns try to gather many more than the minimum required.

“I have contracts on two initiatives – a dialysis initiative and a pain-and-suffering initiative that adjusts the award limit in medical negligence cases,” he said. “Projecting a 70% validity rate, you need about 900,000 signatures, and I have about a million each for my two campaigns. Other campaigns have had to shut down because of the virus. Those initiatives will not be on the ballot because of it.”

One campaign that suspended signature-gathering in the California is the group promoting sports wagering at Indian casinos.

“We are just shy of one million signatures and would have reached our goal well ahead of the deadline before the unprecedented orders around Covid-19,” said Jacob Mejia, spokesman for the campaign. “We remain committed to bringing this issue to voters in November and are monitoring circumstances closely.”

Tax, Lobbying Initiatives Stalled

While western states such as California, Oregon and Colorado are known for aggressive adoption of ballot measures – and for initiatives on every ballot that sometimes seek to sidestep laws or force action on issues lawmakers have declined to embrace – initiatives have become an increasingly popular method of forcing change in other places as well.

In Michigan, the campaign to replace the state’s flat tax rate with a tiered plan taxing higher earners at higher rates and an effort to clamp down on lobbying in the state capital of Lansing are both casualties of the coronavirus, their organizers say. Both groups, Fair Tax Michigan and the Coalition to Close Lansing Loopholes, said they would suspend efforts to place measures on this year’s ballot and shift their goal to the 2022 election.

“I can imagine that citizens who have been working on issues around the country are quite disappointed that this process has ceased to function,” said Underhill of the National Conference of State Legislatures. “It’s one more area where Covid has brought things to a screeching halt.”

To contact the reporter on this story:
Jeffrey Taylor in San Francisco at jtaylor48@bloomberg.net

To contact the editors responsible for this story:
Wendy Benjaminson at wbenjaminson@bloomberg.net

John Harney

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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