Business & Lobbying

Corporations, interest groups spend fortunes on ballot measures

Some of the most expensive campaigns this fall will be waged between the wealthiest corporations and best-funded interest groups in America, as those groups vie to pass or block ballot initiatives in states across the country.

Voters in 38 states will decide whether to approve or reject at least 150 ballot measures this November. Collectively, those measures could match or surpass the $1 billion that supporters and opponents spent on ballot measures in 2016.

Some of the measures touch on the most controversial issues dividing American politics: Alabama voters will decide whether to allow the Ten Commandments to be displayed on state property; voters in Alabama, Oregon and West Virginia will be asked whether to severely limit abortion rights.

But those that will attract the most spending are often seemingly mundane changes to laws voters rarely consider, like housing, energy monopolies and casino gambling. The five most expensive ballot measures being contested this November have already seen a combined $150 million in spending.

That spending is driven almost entirely by major corporate or special interest groups like labor unions, two factions that often fight to a stalemate in state legislatures. So they turn to voters, a decision that costs both sides far more - but one that delivers a clear verdict.

"This is one area in which [corporations] can have unfettered spending. Campaign finance law says you can't corrupt an initiative," said Thad Kousser, a political scientist at the University of California-San Diego. "They spend millions because the policy stakes are in the billions."

California voters are often subjected to the most expensive contests of any given election cycle.

This year, ballot measure campaigns in California have attracted $129 million - about $29 million more than U.S. Senate candidates have raised in Florida and Texas, the two most expensive races of the year so far.

Three ballot measures are driving huge amounts of spending in California: Housing advocates and owners have spent $41 million fighting over a proposal to allow cities to implement rent control.

A health-care workers' union is battling kidney dialysis companies over the costs of care, to the tune of $27 million.

And Republicans are facing labor unions in a battle over the state's gas tax, a repeal measure that has drawn $24 million in spending, the vast majority of it from unions that want to keep a Democratic-passed tax hike to pay for infrastructure.

Corporate interests use direct democracy to advance their own causes in other states, too.

The Disney Corporation and the Seminole Tribe are financing a $27 million campaign to limit the number of casinos in Florida.

Casinos and a data-processing company are fighting over deregulation with a Nevada electric utility, owned by Warren Buffett's Berkshire Hathaway, to the tune of $31 million so far.

Even initiatives in small states can draw big spending. Oil companies and gold mining companies have poured $9 million into a campaign against new protections for salmon habitat. A fight over new rules for hard rock mine permits in Montana has attracted almost $2 million in spending.

Sometimes, wealthy donors spend millions of their own money to influence a ballot measure.

The billionaire hedge fund manager Tom Steyer, said to be contemplating a presidential bid in 2020, has poured more than $8 million into an Arizona initiative to require electric companies to rely increasingly on renewable energy; Pinnacle West Capital Corporation, Arizona's largest utility, has spent $11 million against the measure.

Corporations, special interests or major labor unions decide to invest millions in pursuing a ballot measure when they conclude they cannot advance their cause through the legislature, said Gale Kaufman, a veteran Sacramento-based ballot measure strategist who has worked for union groups in California.

Some legislatures are too cautious to take up a controversial issue, so they leave the decision to voters. 

In other cases, corporations and interest groups may be so deadlocked within a legislature that the only way to break the status quo is to fund an initiative; voters do not get the option to bottle an initiative up in committee.

"The decision to go forward with an initiative is usually based on a lot of research and the belief that starting in the legislature would not get anywhere," Kaufman said.

She pointed to an initiative she ran that legalized recreational marijuana in California, a measure that went on the ballot only after a year of policy and political research. The legislature was unlikely to legalize marijuana, so legalization backers turned to voters.

"Ballot measures are a tool, not only for the people but for anyone who has a vested interest," said Chris Melody Fields Figueredo, executive director of the left-leaning Ballot Initiative Strategy Center.

Almost all of the 150 measures on state ballots this year are either referred to the ballot by state legislators or sent to the ballot after supporters gather enough signatures.

The small handful of remaining measures are either referendums asking voters to veto legislation already passed by a state legislature, or bond measures that must be approved or renewed from time to time.

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