Any doubts about the deep blueness of California’s political landscape were dispelled yesterday as voters handily re-elected U.S. Senator Diane Feinstein to a fourth full term, gave Democrats a 36-17 margin in the state’s Congressional delegation, and apparently elected two-thirds Democratic supermajorities in the State Senate and Assembly.¹

Voters also approved Governor Jerry Brown's temporary tax increase initiative measure to fund education by a 54-46 percent margin and rejected another high stakes ballot measure, strongly opposed by labor unions that would have prohibited deductions from employee paychecks for any political purposes.

California voters faced an unusually large number of competitive races resulting from retirements, new district maps drawn by an independent citizens commission, and a new primary system where the top two vote-getters regardless of party affiliation runoff in the November election. Twenty-eight congressional and legislative races featured candidates from the same political party vying against one another. Many long serving incumbents faced strong challenges in unfamiliar districts. Preliminary vote tallies suggest that as many as seven incumbent members of Congress and two incumbent members of the State Assembly were defeated for re-election. In the previous decade only one sitting member of Congress from California had ever lost a race for re-election and not a single incumbent State Legislator was defeated under partisan district maps drawn by the Legislature.

Democrats Poised to Pick up Two Seats in Congress but Lose Veteran Incumbents

In Congress, Democrat Scott Peters defeated U.S. Rep. Brian Bilbray (R-San Diego) and Democrat Ami Bera holds a slim lead over U.S. Rep. Dan Lungren (R-Gold River) with 100 percent of precincts reporting but many outstanding ballots remaining to be counted. However, the new nonpartisan district maps and same party runoffs contributed to the defeat of four veteran incumbent Democrats including U.S. Reps. Joe Baca, Howard Berman, Laura Richardson, and Pete Stark. Baca, Berman, Richardson, and Stark all lost to fellow Democrats.

Former Republican Lieutenant Governor Abel Maldonado failed in his attempt to unseat U.S. Rep. Lois Capps and GOP State Senator Tony Strickland lost a close race to Assembly Member Julia Brownley.

Democrats Win Supermajorities in State Senate and Assembly

In the State Senate, Democrats achieved their long sought goal of gaining a two-thirds majority allowing them to pass tax increases and override gubernatorial vetoes without Republican votes. Democrats won two of three targeted races giving them a 28-12 seat margin when the Legislature reconvenes. Democratic State Senator Fran Pavley prevailed over Deputy District Attorney Todd Zink in a hotly contested race in the San Fernando Valley and former U.S. Air Force General Richard Roth defeated GOP Assembly Member Jeff Miller in Riverside County.  However, because two mid-term incumbent Democratic Senators were elected to Congress and a third is running for an open seat on the Los Angeles City Council, it is likely that Democrats will still find themselves one or two votes short of a functional supermajority for most of the 2013 session.

In the State Assembly, Democrats captured a minimum of 52 seats and hold small leads in two additional swing districts that could get them to a two-thirds 54 seat supermajority for the coming session. While not affecting the partisan make-up of the Assembly, two incumbent Democratic Assembly Members, Michael Allen from San Rafael and Betsy Butler from Beverly Hills, are losing to same party challengers.

Governor Brown Triumphs on School Tax Initiative

By a margin of 54-46 percent voters approved Governor Brown’s initiative proposal (Proposition 30) to temporarily increase state income tax rates on upper-income individuals by up to three percent and add one-quarter of one cent to the state’s sales tax rate.  The measure will raise about $6 billion annually and avoid budget trigger cuts that  would  have  fallen mostly on K-12 school districts and community colleges if it had failed. Passage of Proposition 30 was seen as a test of Brown's leadership and early polling had suggested the measure was headed for defeat.

Voters rejected a second education funding measure, Proposition 38, by a margin of 28-72 percent.  Sponsored by attorney and education activist Molly Munger and supported by the PTA, Proposition 38 would have raised personal income tax rates from 0.2 to 2.2 percent on most tax filers until 2024. The measure would have raised about $10 billion annually earmarked for spending on K-12 and early childhood education.

Paycheck Protection Initiative Fails

In a major victory for organized labor, voters rejected by a 44 to 56 percent margin a political reform measure (Proposition 32) that targeted the ability of unions to deduct a portion of their members’ paychecks to fund political campaigns. The measure would also have banned corporations and labor unions from making direct contributions to candidates for state or local offices or to any candidate-controlled campaign committee.  Additionally, government contractors, including public sector labor unions that bargain collectively with state or local governments, would have been barred from making contributions to any elected official who plays a role in awarding a contract.

Unions spent more than $66 million to convince voters that the proposal would hamstring their ability to participate in political campaigns for candidates as well as to support or oppose ballot measures while businesses and wealthy individuals, under  Citizens United v. Federal Elections Commission, could continue to spend unlimited amounts of their own money on independent expenditure campaigns.  

Measure Mandating Use of Single-Sales Factor to Tax Multistate Business Income Passes

Voters overwhelmingly passed a second tax initiative, Proposition 39, that requires all multistate businesses apportion their taxable income in California based on the percentage of their global product sales occurring within the state, known as the “single-sales factor” method.  Previously, multi-state businesses could elect the single-sales factor method or a “three-factor” method which included in the calculation the proportion of the business’s payroll and property within the state, whichever method resulted in the lowest tax.  The revised tax methodology, which takes effect January 1, 2013, is expected to raise approximately $1.1 billion annually with half of the revenues initially earmarked for energy efficiency and alternative energy projects and the other half going to support guaranteed K-14 education funding under Proposition 98.  After 2018 half of the revenue would be spend on K-14 education and half would be deposited in the state’s general fund.

_{1  Based on 100 percent of precinct returns but final tally of mail-in and provisional ballots could change the results in the Bera-Lungren race and two of the assembly races.}