Citing political pressures, the business group pushing the idea of a constitutional convention for the state has begun efforts to hand off that effort to an independent committee.

The Bay Area Council has been championing the idea since last August. More recently, they have found themselves embroiled in a contentious debate over whether a convention should be allowed to consider the property tax limits in 1978’s Proposition 13. This question culminated in an early June conference call with anti-tax groups who threatened to derail the effort.

“We don’t want to get electrocuted on one of third rails of California politics,” said John Grubb, a spokesman for the Council. “We want a neutral process to determine what will be in the constitutional convention.”

With that goal in mind, they have begun efforts to convene a wide-ranging group of about 100 experts in relevant fields to determine what questions a convention should and should not be able to consider. Grubb said that they have been in touch with high-level politicians in state and in California’s Congressional delegation, an effort that has gained steam in the last two weeks. The new group’s goal would remain to getting initiative onto the November, 2010, ballot calling for a constitutional convention.

Grubb also said that they did not want the constitutional reform effort to get wrapped up in the idea that it was backed mainly by a “business” group—something that might turn off some voters.

The Council has been circulating draft language to various stakeholders since January. In April, that draft was amended to include the directive, “Delegates to the convention shall be prohibited from considering and proposing revisions to the Constitution that would affect property taxes associated with Proposition 13 or, any other direct increases in taxes.”  

Grubb said that this limit originally grew out of feedback the group was getting from ordinary citizens. The Council’s website has links for people who want to hold meetings in their homes and then provide comments. About 200 people have hosted meeting so far, Grubb said.

“A lot of people were telling us that Prop. 13 should not be part of a constitutional convention,” he said.
But this language was not enough to satisfy some anti-tax advocates. Early this month, the Council got a letter from Ted Costa, the CEO of the anti-tax group People’s Advocate, Inc., and one of the leaders of the 2003 recall against Governor Gray Davis, saying he was going to oppose their effort.

In an effort to reach out to this constituency, the Council held a conference call with several anti-tax leaders on June 10. Those on the call included FlashReport publisher Jon Fleischman, National Tax Limitation Committee president Lew Uhler, and Jon Coupal, president of the Howard Jarvis Taxpayers Association.

Despite the call, the anti-tax groups sent out a joint letter to elected officials later that day opposing the idea of the convention. Despite “the good intentions of many of the individuals” involved, the letter stated, the “effort could very well result in the weakening or outright repeal of vital taxpayer protections such as Proposition 13 and Proposition 218.”

Coupal said that even though protections are written into the current draft language, holding a convention would be “risky.”
“Picking folks out of a jury pool, ordinary citizens? We think it will set up a system ripe for abuse,” Coupal said. He added, “The same special interests who find ways to affect the [political] process are going to find ways to affect this process no matter how you try to bulletproof it.”

Tax increases wouldn’t be the only matter taken off the table. The language calls on conventioneers to consider only matters of governance, elections, budget and revenue distribution. As a practical matter, Grubb said, this would mean they would not be open to consider issues like gay marriage, abortion or prayer in schools.

One limit that is not in the language so far is any restriction on changing the two-thirds voting requirement to pass a budget or new taxes. Grubb did say the group would lobby against such a change, however.

“As an organizational matter the Bay Area Council would be opposed to changing a two-thirds requirement on a tax increase,” Grubb said.

But according to some critics, reconsidering Prop. 13 and other tax policies that are written into the constitution would be one of the main reasons to have a convention in the first place. One of the most talked-about reforms is the so-called “split roll” idea, which would limit or eliminate the rights of businesses to keep their property taxes down, as homeowners do.

“Where do you draw the line on this?” asked Lenny Goldberg, executive director of the California Tax Reform Association. “The constitution is littered with stuff about various tax protections. Should the insurance tax be in the constitution? Should the protection for the gas tax be in the constitution? Prop. 98 is in the constitution. Is that up for grabs?”

Goldberg is probably the leading voice calling for Prop. 13 reform. But his basic point -- that the California constitution has too much of the tax code written into the constitution -- is echoed by many others. One of these is Mark Paul, senior scholar with the non-partisan New America Foundation.

“I think it’s silly to have a conversation about the future direction of California without talking about Prop. 13,” Paul said. “I think it’s fundamental.”

Paul has written and spoken extensively on the idea of a convention, which he sees as a way to deal with how “junked up” the state’s constitution has gotten via the initiative process. Compared to other states, California’s document is filled with “permanent victories” won at the ballot box which are nearly impossible to change via the legislative process. Paul said he would take most of the specific fiscal language out of the constitution altogether in order to free the legislature’s hands, and also reform the initiative process.

“The guiding principle ought to be that less-is-more when it comes to what the constitution says in regard to fiscal issues,” Paul said. “We’re really on the far end of the spectrum on having imbedded into the constitution lots of policy outcomes. Constitutions are supposed to be framework that set up the rules of the game.”

He added, “If you read the federal Constitution looking for rules on fiscal policy, if you blink, you’ll miss them. There is very little.”
In the meantime, Goldberg said he is laying the groundwork for another potential change that could eventually come via initiative. This is a project looking at how much money the state has lost via the commercial property tax provisions in Prop. 13, which often let new owners of business properties keep the old rates and pay taxes on the fraction of the true value.

“We’re doing a lot of research on commercial property,” Goldberg said. “It’s a long term project. We think when the data gets out there, people will be fairly well appalled by what’s going on.