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What Happened to March 2020 Local Revenue Measures in California?

Posted on: May 1st, 2020

NEGATIVE MARCH 2020 FINANCE MEASURE OUTCOMES THE RESULT OF A “PERFECT STORM”
Cumulative Impact of a Variety of Individual Factors Changed the Context of the Election

This comprehensive report by Michael Coleman on local ballot measure outcomes in California’s March 3rd, 2020 statewide primary election provides a vital service by helping all of us to understand an election that took place seven weeks ago, in a world that looked radically different from the one that we face today. California’s March 3rd election represented a dramatic departure from recent precedents in our state. From the sheer number of local tax and bond measures on the ballot (more than any previous primary election) and the historically small share of them that won approval from voters, to the first unsuccessful statewide school bond measure in a quarter century, last month’s election was exceptional.

1  WHAT MAY HAVE HAPPENED, AND WHAT HAVE WE LEARNED SO FAR?
What were the factors that contributed to the rejection of so many finance measures on the March 3rd primary ballot? While a complete picture of what occurred (and why) likely won’t be available until after ballot-counting has been completed and the final election results are certified by the State, FM3 and others have already begun conducting a variety of post-election voter opinion survey research that has yielded useful data. Some key findings from this research include:

  • An Increasingly Pessimistic Electorate: In the leadup to the March primary, California voters held an increasingly negative outlook toward the state, driven largely by the affordable housing crisis, homelessness, the high cost of living, and a feeling of being overtaxed. In multiple surveys, we saw an alarming rise in “wrong track” numbers in the first few months of the year. Perceptions of the performance of many state and local elected leaders, including Governor Newsom, were also divided (though perception of Newsom has since shifted in a positive direction as a result of his handling of the Coronavirus crisis).
  • Tax Fatigue, Cost-of-Living & Accountability Concerns: Among voters who cast their ballot against a local school bond measure in their community in the March election, opposition to high taxes (and increases to property taxes in particular), concern about the cost of living, and skepticism that bond funds would be used efficiently and as promised were the most frequently-cited reasons for their decision. While these concerns have always been present among some segment of the electorate, recent research has shown dramatic increases in concern about the cost of living – especially the cost of housing.
  • The Coronavirus & Its Early Economic Impacts: In FM3 post-election research, Democrats, supporters of Bernie Sanders’ Presidential candidacy, voters of color (Latinos and Asian-Americans in particular), and voters in Los Angeles County were all more likely than other March voters to report that the emerging coronavirus situation impacted their decisions regarding who and what they voted for/against (14% among all March voters, 19% each among Democrats and Los Angeles County voters, 25% among Sanders supporters, and 28% each among Latinos and Asian-Americans, respectively). Further, a larger share (37%) of Democratic likely voters who did not cast a ballot in March indicated that concern about COVID-19 and going to polls was either a major or minor factor in their decision not to vote than either their GOP (20%) or independent (24%) counterparts. In addition to the virus itself, a stock market decline of roughly 3,600 points (approximately 12% of its peak value) over the final 19 days leading up to the election may have impacted voters’ perceptions of their own financial circumstances – particularly the election-day voters who frequently form an integral part of pro-finance measure coalitions.
  • An Anticipated Surge in Democratic Voter Turnout that Failed to Materialize: Predicted higher turnout among younger Democrats, progressives, and Latinos failed to materialize, and the March electorate appears to look more like a traditional primary (47% turnout in March 2020 vs. 45% turnout in the most recent prior presidential primary election in June 2016). A number of factors may have contributed to this, including the announcements of multiple Democratic candidates that they were ending their campaigns in the weeks before the primary. In our post-election research, 39% of high-propensity California Democratic voters who did not cast a ballot in the March election described “The candidate I supported for President dropped out of the race” as either a major or minor factor in their decision not to vote, compared with 20% of their non-voting GOP counterparts. Further, the extent and scale of Joe Biden’s sweeping victories across numerous East Coast and Midwestern states (which was becoming clear well before polls closed in California) may also have played a role by de-motivating Sanders supporters in California.
  • Long Lines at L.A. County Voting Centers: The logistical problems encountered on election day in L.A. County appear to have had a negative impact on voter turnout. For the March 3rd election, the County deployed a new voting system for the first time that included new voting machines as well as fewer in-person polling stations in different locations than previous elections. The result was long lines on election day at many L.A. County vote centers, and 44% of likely L.A. County voters who did not cast a ballot in the March election described “Lines at the polling stations were too long” as either a major or minor factor in their decision not to vote – compared to nine percent of their peers in other areas of the State. While the impact of these dissuaded election-day voters not casting ballots is difficult to quantify, given the strong historic support for finance measures among election-day voters in L.A. County and throughout the state, it may well have had a meaningful impact on a variety of finance measures throughout the County.
  • New(ish) Legal Requirements for Local Measure Ballot Label Language Prescribed by AB-195: Local bond measures, in particular, continued to experience significant reductions in support as a result of the additional financial language now required to be included in their 75-word ballot label as a result of legislation (AB-195) enacted in 2017. FM3’s research on local G.O. bond measures over the last three years has consistently documented a 10- to 13-percentage-point difference in voter support for the same measure depending on whether the measure’s ballot label is drafted using AB-195 compliant or pre-AB195 style wording, with agencies that feature more traditionally fiscally-conservative electorates frequently on the higher end of this range. The negative impact on voter support for local bond measures as a result of using AB-195 compliant ballot label language, as well as this language’s relatively greater impact in fiscally conservative areas (many of which featured one or more local bond measures on the March ballot) clearly played a contributing role in many of the primary’s finance measure outcomes.
  • A Sharper Dropoff in Support for Local Finance Measures Among Voters Outside of the State’s Largest Urban Centers: Electorates within the nine-county San Francisco Bay Area and Los Angeles County have historically approved local finance measures at higher rates than their counterparts throughout the balance of the state in every recent election. For example, over the course of the three statewide primary elections preceding March 2020 (held in June 2014, June 2016, and June 2018), Bay Area and Los Angeles County voters approved 91% of the local finance measures on their ballots, while the corresponding figure was 69% for the rest of the state. This year, while greater proportions of local finance measures failed than in recent elections within each of these geographic areas (SF Bay Area/L.A. County and California’s 48 other counties, respectively), the gap in passage rates between these two areas widened, as Bay Area/L.A. County voters approved 56% of local finance measures on their ballots while voters throughout the balance of the state approved just 28%. This geographic asymmetry is clearly illustrated by the statewide maps of local school bonds and parcel tax measures prepared by Michael Coleman and featured in his report.

2  WHAT MIGHT THIS MEAN FOR NOVEMBER 2020?
Key to understanding and interpreting the March 2020 results is the fact that, between the Summer/Fall of 2019 when finance measures were planned, researched, drafted, and formally added to the ballot, and February/March when the ballots were cast, the context of the election changed. These changes occurred in ways particular to the various measures themselves, to the shape of the turnout, and then, in the final days and weeks before election day, with a health crisis and early warning market shock that may have altered views about the process of voting and the likelihood to support spending measures.

Today we are experiencing perhaps the biggest contextual shift during an election year in over three-quarters of a century. The virus and its consequences will profoundly change this November’s election, including by making decisions about whether or not to go forward with ballot measures and, if so, how to plan and execute their associated public communications and outreach more dynamic and crucial than ever.

Many California local agencies have long been planning finance measures for the November 2020 election to address long-term fiscal needs. Further, given the structure of local government revenue in California, the present economic downturn will no doubt create a need for more revenue in additional communities, particularly when combined with the fiscal demands of responding to the COVID-19 pandemic. Understandably, many local leaders may be questioning whether this November’s election is the right time to ask their community to consider additional local revenue, given the economic and public health outlook – regardless of the degree to which that additional revenue is needed.

We urge local leaders to preserve their options by delaying final decisions on whether to move forward with potential November 2020 finance measures for as long as possible (and ideally until the late summer placement deadline for local ballot measures), for at least two reasons. For one, while it may be a cliché that in today’s 24-hour news cycle a few months is a political lifetime, the speed at which current events are unfolding regarding both the COVID-19 pandemic and the economy makes this truer today than perhaps ever before. There is no way for any of us to say with any degree of certainty under what economic and public health conditions the November 2020 election, or its leadup, will take place – other than that they will almost certainly be very different from the ones we face today. Furthermore, adverse economic conditions are also no guarantee of failure for local tax and bond measures, many of which continued to win approval from voters during the Great Recession and its immediate aftermath.

Though early planning (including research and public engagement) remain crucially important, by delaying final decisions regarding whether to place a finance measure on the November ballot until closer to the ballot placement deadline, local agencies can preserve their flexibility to adapt to rapidly changing circumstances. While none of us know what the context for the November 2020 election will be, providing local officials the opportunity to make research-informed “go/no-go” decisions later this summer, when that context is likely to be clearer, can help lay the groundwork to generate much-needed additional revenue.

Read Michael Coleman’s full March 2020 Report: http://californiacityfinance.com/Votes2003final.pdf

Category : Thoughts From FM3