Close Close

Regulation and Compliance > State Regulation

Big money pours millions into ballot initiative battles

Your article was successfully shared with the contacts you provided.

(Bloomberg) — 2016 is shaping up to be a big year for ballot initiatives.

Political groups have already raised more than $125 million so far to get issues directly before voters, a Bloomberg analysis of state campaign finance data shows. That’s a 74 percent increase from what was raised for initiatives at the same point in the 2014 election cycle.

Ballot measures allow groups to get a popular vote on specific policy measures rather than go through the arduous process of lobbying state legislators to take action, which often involves some form of compromise with members of the opposing party. According to Ballotpedia, which tracks federal, state and local elections, there are about 817 proposed measures this year, up from 616 in 2014 and 566 in 2012.

Part of the surge comes from the dismal voter turnout in 2014, said Josh Altic, a project director at Ballotpedia. To get a measure on the ballot, states require petitioners to gather a certain number of signatories, typically determined by voter participation in the previous election. According to the United States Election Project, turnout in 2014 was the worst in 70 years for a midterm, making the number of signatures required for 2016 ballot initiatives considerably lower.

The number of signatures required dropped by 46 percent in Nevada from the last election cycle, by 28 percent in California and by 21 in Ohio.

“Low turnout in 2014 has led to just about everyone proposing a ballot initiative,” Altic said. “A lot of state governments have been moving toward the Republican side, and you see initiatives moving to the left.”

In Maine and Nevada, gun safety measures will be on the ballot. Voters will also be able to raise the minimum wage in Arizona, California and Maine. In Oklahoma, proposed initiatives include marijuana legalization, an increase in education funding, and even a measure to make it easier to advance ballot initiatives.

Gathering the requisite signatures is still expensive. According to Shaun Bowler, a political science professor University of California Riverside, the cost amounts to between $2 and $5 for each signature in California. That adds up: the state requires as many as 585,000 signatures to put initiatives on the ballot that would amend its constitution and 366,000 for those that would change a statute.

“If you’ve got 2 million bucks, you can get anything on the ballot,” Bowler said.

The Los Angeles-based AIDS Healthcare Foundation, a global organization with a $1.3 billion budget, is the sole sponsor of a pair of initiatives, one that would cap the price that state agencies pay for prescription drugs and another that would require performers in adult films to use condoms. The group has contributed $5.9 million to the efforts. On the other side, a group called Californians Against the Misleading RX Measure, funded entirely by pharmaceutical firms, has raised $39 million to defeat the prescription drug initiative.

In South Dakota, which already has ten questions on the ballot—the most of any state so far—Select Management Resources LLC, parent of the lender Loan Max, has spent $455,000 to promote a constitutional amendment that would take away the state legislature’s ability to cap the amount of interest a lender could charge.

In Massachusetts, the Service Employees International Union (SEIU) contributed $510,000 for a measure that would regulate insurance payments to a handful of high-tech hospitals. In California, the union is spending $3 million to cap the pay of hospital CEOs.

See also: Colorado exchange bones up on broker strategy

In Colorado, a proposal for a single payer health plan called ColoradoCare is thus far the only one to have made it onto the ballot. ColoradoCareYes, the group that sponsored it, has raised $576,000 since last year. Coloradans for Coloradans, formed to oppose the measure, just reported raising $1 million through the end of April, including $500,000 from health insurer Anthem (NYSE:ANTM).

Relatively few initiatives have serious financial backing. In California, just 10 of the 137 ballot questions that have been filed with the secretary of state are backed by political groups that have raised $1 million or more. Still, some are moving through with a single well-heeled backer.

Dean Cortopassi, a farmer and food processor, and his wife are the sole donors behind the Stop Blank Checks Initiative, which would require voter approval before the state issued more than $2 billion worth of bonds for any infrastructure projects, including waterworks and high-speed rail. They’ve given $4 million supporting the measure, which has already made it onto the November ballot.

Charles T. Munger Jr., a Stanford physicist and major Republican donor, has contributed $6.6 million in support of California constitutional requirement that legislation be posted online for at least three days before facing a vote. He has until June 13 to get the requisite number of signatures.

So far, just 32 citizen-initiated petitions have qualified for state ballots. According to Jason Dunn, former assistant attorney general in Colorado, that’s in part because the process is complicated: proposed initiatives need approval from state legislative and executive bodies, and can face court challenges, too.

Some have already seen their efforts—and money—fail to get results. Floridians for Solar Choice raised $2 million from environmental groups, solar companies and a tea party organizer, for a measure that would have opened up the state to the leasing rooftop solar panels. That wasn’t enough to beat back power companies, including Duke Energy, Florida Power and Light, Gulf Power Company and Tampa Electric Company. The group launched a competing initiative, Consumers for Smart Solar, which is less friendlier to the renewable-energy industry.

That power industry group raised $4.5 million and was helped by another $3.1 million from conservative non-profits that don’t disclose their donors, including the 60 Plus Association, which is linked to billionaires Charles and David Koch. Consumers for Smart Solar’s initiative made it onto the ballot; the solar companies’ measure did not.

According to Steven Smith, who served as chairman for Floridians for Solar Choice, his donors were concerned about marshalling the resources necessary to battle the utilities.

“The fact that the utility companies spent $7 million to stop our initiative scared some of our donors,” Smith said. “They may spend $30 million to block it if we got on the ballot.”

The utilities’ stance appears to be having an impact in other states. In Missouri, Massachusetts and Arizona, groups promoting renewable-energy measures have changed tactics. Instead, they’re going back to lobbying state lawmakers.

Mark Walter, deputy director of Renew Missouri, said the group dropped its ballot initiative in part because the state’s utility companies had already donated $1 million to a competing measure.

“They were positioning themselves to move against us in the same way that happened in Florida,” Walter said.

See also:

California measure would let consumers sue over health rates

PPACA: Missouri Voters Pan Plan


Have you followed us on Facebook?