Foon Rhee

The law that led to soda tax blackmail is coming to cities. Is Sacramento’s rent control fight next?

Sacramento Mayor Darrell Steinberg announced Thursday, June 7, 2018 he will ask voters to raise the city’s sales tax to 1 percentage point through a November ballot measure.
Sacramento Mayor Darrell Steinberg announced Thursday, June 7, 2018 he will ask voters to raise the city’s sales tax to 1 percentage point through a November ballot measure.

Depending on how you look at it, a state law that allows proponents to pull ballot measures after negotiating with legislators is the path to smarter public policy in California – or is another way for special interests to use their money and power to blackmail elected officials.

Like it or not, the very controversial initiative reform is about to come to cities and counties across the state after Gov. Jerry Brown signed Senate Bill 1153 on Friday.


The new law takes effect Jan. 1 and will apply to potential local ballot measures starting in 2019.

To see how it could play out, just look at what’s happening in Sacramento.

It’s complicated. The City Council plans to place on the Nov. 6 ballot a measure to renew Measure U – the half-cent sales tax that helps fund police, fire and other basic services – and to increase it to a full penny.

As city officials try to solidify support to make sure it passes, they pledge that some additional money would go to neighborhood investment, a hot-button issue in the wake of the police killing of Stephon Clark. Some cash would also go to affordable housing, at the same time there’s a raging debate over rent control.

So this new law could throw another wrinkle into the delicate negotiations between tenant groups and labor unions on one side and landlords, developers and business groups on the other.

Mayor Darrell Steinberg is seeking to broker a deal that creates more affordable housing and helps struggling renters, but stops short of full-on rent control. He also happens to be the author of the state initiative reform law in 2014, and he supports this local version. Another major supporter is the Service Employees International Union, which is deeply involved in the rent control talks.

A Steinberg spokeswoman says the new law isn’t directly related to the rent control debate, and there will be a deal before any local measure anyway. I don’t underestimate the mayor’s political skills and powers of persuasion, so maybe she’s right. Maybe everyone agrees to a great plan.

But based on the firm positions both sides are taking, I wouldn’t count on it. It’s entirely possible that this debate goes into next year – and that the possibility of a local rent control measure in 2019 or 2020 brings the new law into play.

Then again, rent control in Sacramento may be off the table if California voters in November reject Proposition 10, which would expand the authority of local governments to enact rent control. That measure ended up on the ballot after the Legislature and the governor didn’t do enough on affordable housing to satisfy advocacy groups.

As I said, it’s complicated.

To proponents of the new law, it seems to be simpler: It worked so well statewide, why not let California’s cities and counties have it as well?

They say it encourages public officials to take on big problems and discourages poorly-drafted ballot measures. The city of Sacramento wrote in support of SB 1153, saying it would give “local jurisdictions more flexibility” to avoid voter confusion and election costs.

The author of SB 1153, Sen. Henry Stern, D-Canoga Park, points to last year in Los Angeles, when voters faced two competing initiatives on marijuana regulations. The cannabis industry collected enough signatures to get Proposition N on the ballot, but then negotiated with the L.A. City Council on another proposal, Proposition M. But it was too late to get Prop. N off the ballot, so it took a costly education campaign to make sure voters picked the preferred measure.

That’s a clear case where this new law would have been good for voters. But I’m betting there will be many other times when the result is murkier – like what happened this session in the Legislature.

The statewide law worked as advertised, mostly, when legislators passed a data privacy bill and proponents withdrew their initiative, and when paint companies pulled their lead paint cleanup measure after legislative leaders pledged to address the issue.

But critics came out in force – for very good reasons – when the soda industry threatened to place an initiative on the November ballot to require two-thirds approval for any and all local taxes. If successful, it would have made it very difficult to add local taxes, including Sacramento’s Measure U. To avoid that possibility, the Legislature agreed to ban local soda taxes through 2030.

It was political extortion – and it worked

Even with that fresh on legislators’ minds, the state Assembly approved the local version 69-0 on July 5; the state Senate passed it 36-0 in April.

I suppose it’s possible that local officials are equipped to successfully haggle with advocacy groups armed with money and consultants. But it’s also possible that powerful local interests – developers and unions, to name two – will pull off what the soda industry did.

One thing’s for sure: Local politics is about to get even more complicated and dramatic.

Foon Rhee: 916-321-1913, @foonrhee