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Mad Props 

On the ballot: campaign finance reform, public power and auto insurance rates

Last week, we gave you the low-down on Propositions 13 and 14, which you can check out in the archives. Today, we give you the three other propositions California voters will decide on in June that could create a publicly funded elections scheme, make it more difficult for local governments to form publicly funded utilities and loosen up regulations on the auto insurance industry. Without further ado, we give you Mad Props.

Speaking About Campaign Finance Reform

Every election cycle, usually with the first filing of campaign finance disclosure forms, a flurry of fingers start pointing in one direction or another crying "foul" and "special interest"; by the end, the theme becomes "reform." The same conversation is happening at the state level, and voters will decide whether to bite.

Proposition 15, if passed, would test out a complicated and expensive publicly funded campaign scheme for the office of the California Secretary of State in the 2014 and 2018 election cycles. This proposition is packed with details, too many to address in print. But here is a summary.

Currently, lobbyists have to pay $25 a year to have the pleasure of interacting directly with elected officials. Under this prop, that fee would skyrocket to a whopping $700 every two years. The state would then give all the moolah made from the oodles of lobbyists in California to candidates qualifying to run for Secretary of State. (It is also against the California Constitution to use public funds to finance an election; this prop would amend that.)

If the candidate is representing a major or minor party, or is an independent, she will receive a grant set at a particular tier, which is all the money a candidate can raise unless opponents who have not opted into the program start raising more. For example, a major party candidate (ie. Democrat or Republican) in the program would receive $1 million for the primary and up to $5 million if an opponent starts raising more. For the general election, the amount increases to $1.3 million and $5.2 million, respectively.

If there are too many candidates in the program and not enough money to go around, then the grant money would be split accordingly and they can raise the rest privately. Supporters see this as a way to address the oodles of cash in elections, while opponents believe the law unfairly penalizes lobbyists and taxpayers.

That's the quickie. Read your voter guide for more details.

Power Play

The majority of Californians get their electricity from one of three private utility companies: Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric. Nearly a quarter get theirs from publicly owned utilities. But there is another option, one that 40 local governments are researching: Community Choice Aggregation.

In brief, CCA essentially creates a publicly owned bargaining pool where a local agency can negotiate electricity rates with private or public utilities and invest in renewable energy to receive a portion of their power from that source.

Proposition 16, or the "Taxpayer's Right to Vote Act," introduced and completely funded (about $35 million to date) by Pacific Gas and Electric, would make it more difficult to do just that.

In order to form a CCA, a local government merely votes for it, like a city ordinance. If areas outside its jurisdiction are slated to be a part of the CCA, a majority vote for annexation is required. Under the prop, whenever public funds are proposed to be used for the purpose of creating or expanding a CCA or publicly owned utility, the decision must go before the people and garner two-thirds support -- similar to the California Legislature's budget process, or a vote on a special tax. It also requires a two-thirds vote for annexation, if that is called for. The only exception to this is when public monies are used solely for renewable energy.

Arguments pertaining to the prop are simple: Supporters say taxpayers have a right to decide whether or not to spend money on this type of endeavor, while opponents say PG&E is using the imitative process to crush competition and strengthen its monopoly. You decide.

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Speaking of special-interest initiatives: Proposition 17, introduced and primarily funded by Mercury Insurance, attempts to overturn longstanding, voter-approved regulations against allowing auto insurance companies to use length of coverage as a basis for determining a customer's rate.

In 1988, voters passed Proposition 103, which directed the Insurance Commissioner to review and approve rates based on a limited set of criteria. Under the current rules, an auto insurance company cannot use, as a basis for determining a customer's rate, how long that customer has had continuous coverage.

The silver lining of the prop is that the rules would change to allow an insurer to offer a "persistency" discount for those customers who had coverage for five years, with no more than a 90 day lapse in that time. But where there's a discount there is also a hike, particularly if you're new to the whole insurance game, and this prop would allow insurance companies to factor that into a rate as well.

The prop allows for a few exemptions when considering continuous coverage, such as military service, failure to pay a premium and children living with parents. But that's only if an insurer choses to give a discount, because according to this prop they wouldn't have to .

Supporters primarily consist of business-oriented organizations, such as the California and Hispanic Chambers of Commerce, Small Business Action Committee and Consumers Coalition of California. They argue that these discounts would apply to 80 percent of drivers and would save hundreds of dollars for many.

Opponents, including the California Democratic Party and Consumer Watchdog, have argued that in other states that allow these persistency discounts, Mercury Insurance charges exorbitant surcharges to customers who have a lapse in coverage. If trends follow course, low-income and newbie drivers would be unduly affected by potentially high rates.

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John C. Osborn

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