Dan Walters

Opinion: Huge stakes in spending on politics

Something north of $400 million was spent in California last year on campaigns for statewide and legislative offices, and for or against state ballot measures.

And it was, in relative terms, a quiet year. Gov. Jerry Brown spent very little on his re-election campaign, and challenger Neel Kashkari had very little to spend.

Ballot measures, particularly two affecting health care, drew the most state-level spending, well over $150 million. At least another $150 million went into selecting who would fill 100 legislative seats.

The overall number for the 2013-14 election cycle, $413 million, comes from the National Institute on Money in Politics, which gathers and analyzes data from reports filed with the secretary of state’s office.

But campaign spending doesn’t tell the whole story of “political action” involving state government.

One should add nearly $300 million that thousands of interest groups spend each year on more than 1,000 lobbyists to represent them in the halls of government. That pushes the total over a two-year election and legislative session cycle to about $1 billion.

But wait, as the television pitchman says, there’s more.

Those interest groups spend many millions more on “public relations,” either in-house or through dozens of firms that specialize in polishing the images of their clients or otherwise supporting the efforts of lobbyists.

It’s been a growth industry as indicated by last week’s announcement that the public relations firm headed by veteran Capitol operative Donna Lucas is expanding its staff.

Let’s assume that including PR operatives would raise biennial political spending to $1.2 billion. That’s big money, right?

It is to anyone not named Gates, Koch, Steyer, Soros or Buffett, but it’s pocket lint compared to huge stakes in the political game.

Some stakes are quantifiable, such as $250 billion the state budget spends each year – a half-trillion dollars every two years – and perhaps another quarter-trillion in insurance premiums, utility rates and other transactions subject to state regulation.

With the budget’s expansion of Medi-Cal, regulatory power and implementation of Obamacare, the state controls virtually all health care spending. And health care is California’s largest single industry with way more than $400 billion in activity every two years.

Finally, there are the huge but unquantifiable stakes.

How many millions, or billions, of dollars are at stake in battles over Internet poker, oil well fracking, rent control, tax breaks for the movie and aerospace industries or countless other high-dollar issues?

Interest groups that spend $1.2 billion on political action every two years are trying to affect political and regulatory decisions worth, conservatively, $1 trillion.

That’s a benefit-cost ratio of over 800-to-1 and explains why they are willing to spend – or invest – whatever it takes to win.

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.

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