Prop 16: When Money Went Silent

Zuzu / Wikipedia

The old adage "money talks" certainly seemed to be the case in a number of primary races this spring. 

Meg Whitman and Carly Fiorina both outspent their competitors handsomely and walked away with positive results. 

Still, money went silent in Proposition 16, the ballot initiative funded by utility giant PG&E to the tune of $50 million -- compared to the $100,000 spent by opponents.  Wednesday morning, Prop 16 appeared to fail -- with 100% of precincts reporting, 52.5% of voters rejected the initiative.

How is it that this proposal lost, given a 500-to-1 fundraising disparity? Several factors combined to thwart the PG&E effort. 

First, many people just don't like PG&E.  Unlike its two counterparts, Southern California Edison and San Diego Gas and Electric, the company was the only major utility in California to go bankrupt during the power crisis of 2002. That speaks to bad management. Recent accusations that its new automated "smartmeters" have been overcharging customers have not helped its reputations.  Simply put, people don't trust the company.

Second, there's the chutzpah factor.  At the same time PG&E was spending $50 million to push Prop 16, the company was asking the California Public Utilities Commission for a $1.1 billion rate increase. Seeing this contrast, the average voter asked, how could the company justify a rate increase when it was spending gobs of dough for its own initiative?  Never mind that the funds spent on the campaign were separate from the money used to operate the company -- it just didn't look right.

Finally, there was the "two-thirds" issue, a requirement in the proposal that any city seeking to establish a municipal utility would be allowed to so only with approval of two-thirds of the voters. Increasingly, that fraction is beginning to stick in the craw of California voters, who have come to see the requirement as a huge obstacle to enacting a state budget. Why add such an onerous rule to those hoping to reduce their utility costs?

Years ago, political scientist and public opinion expert V.O. Key wrote that "the voters are not fools" when it comes to deciding major issues of the day. At least on this issue, Key was right. Obscene amounts of money could not overcome the common sense of the voters who clearly saw that PG&E was operating in its own interest, not theirs. With respect to Prop 16, the scream of money fell on deaf ears.   

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