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August 26, 2013
Editorial: Lawmakers should reject gut-and-amend bill aimed at cities, counties


(Aug. 26 - By the Editorial Board)

The League of California Cities, the California State Association of Counties and other similar local government nonprofits undoubtedly wield serious power in the Capitol, and sometimes they have abused it.

Yet lawmakers would be unwise to act this session on a gut-and-amend bill that is purportedly aimed at making these groups more transparent. The bill in question, SB 594, started out as legislation by Senate President Pro Tem Darrell Steinberg, but was amended and completely changed by its new author, Sen. Jerry Hill. The clear intent of the bill, pushed by an odd-couple alliance of firefighters and the Howard Jarvis Taxpayers Association, is to limit the ability of the league, CSAC and similar groups to engage in ballot advocacy.

Lawmakers have good reason for supporting this cause. For purely self-serving reasons, the league and other groups were able to sell voters on Proposition 22, a 2010 ballot measure that prevents the Legislature from raiding the funds of local redevelopment agencies. Lawmakers were so angry by this power play that they, with Gov. Jerry Brown's help, decided to eliminate redevelopment agencies altogether.

During this time, critics have been questioning how the League of California Cities and other similar groups raise money for their political efforts. The league, for instance, has a political action committee, in which donors are disclosed. But because of its nonprofit status, the league can also collect "non-public funds" for campaigns without disclosing the donors. By 2007-08, these kind of campaign expenditures had topped $4 million.

Critics also accuse the league of gleaning millions of dollars in "marketing and governance fees" generated by the sale of taxpayer-subsidized bonds, and diverting that into campaigns. The league has denied that, saying that no public money goes into their political spending. Other government nonprofits have also insisted their campaign expenditures include no public funds. In 2009, the Fair Political Practices Commission gave credence to those claims by ruling there was no evidence that public funds were used to make political contributions by the organizations.

Despite that finding, the California Professional Firefighters and other groups continue to allege that governmental nonprofits are "co-mingling" of public and private funds. In response, Hill wants nonprofits that get 20 percent of their support from public funds to place that money in separate accounts and to disclose how it is used in campaigns.

We agree there is a need for greater disclosure of donors to nonprofits that skirt the edge of being political advocacy groups and regularly cross it. But such disclosure requirements should apply across the political spectrum, not just to ones the Legislature chooses to punish, and keeps punishing, year after year.

The motivations of the California Professional Firefighters and the Howard Jarvis Taxpayer's Association should also be noted. The firefighters fear these governmental nonprofits could be a force in supporting a potential pension reform initiative that could be on the ballot in future years. The taxpayer's association is annoyed the league and other groups were successful in helping Brown pass Proposition 30, a tax increase that helped bring the state's finances in better balance.

More transparency is needed, but it should be done across the board and in a transparent way. A gut-and-amend bill is hardly the way to do it.

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