What Soda Taxes And Lead Paint Have To Do With Internet Regulation

from the public-policy-on-sale-now! dept

They say that laws are like sausages, and you should never watch either be made if you don’t want to be sick. But some manufacturing processes are more disgusting than others, and if we don’t want to suffer ill-effects, we need to keep an eye on the worst of them.

As others have discussed, the new California Consumer Privacy Act (CCPA) is at best a law with troubling aspects, if not completely chilling for future Internet businesses and even non-commercial online expression. True, there may be the opportunity to amend it before it goes into effect to dull the worst of it, but how we find ourselves in this position where we are stuck with a ticking time bomb of a law that we now need to fix is a story worth telling, because if it could happen once it could happen again. And already has.

Which is why I’m going to tell the story about how California just banned soda taxes (in fact, not coincidentally, right around the same time that it passed the CCPA).

To understand what happened, one first needs to understand a bit about the California Constitution. In addition to setting up the typical branches of government (legislative, executive, judicial), it also allows for a form of direct democracy through ballot initiatives. Ballot initiatives generally only need a simple majority to pass, but once passed, they can be very difficult, if not impossible, to un-pass or modify them without another ballot measure. Even when ballot measures only amend statutory code, and not the Constitution itself, the legislature can be prevented from making any modifications to that new language, no matter how necessary those changes may be, unless the ballot initiative allows the legislature to act. And even if the initiative does permit it, it may require a much more difficult to attain super-majority of the legislature to make any changes, rather than the simple majority typically required to pass legislation.

The upshot is that an awful lot of California law and policy can depend on the initiative process — and thus a whole lot can depend on who is able to use it to push forth the policy they prefer. In one sense, it’s hard to get a new initiative on the ballot: it requires hundreds of thousands of signatures to qualify. But it turns out that for people who have a lot of money, it’s not all that hard. Some estimate that it may take only $3-4 million to acquire enough signatures to get any initiative on the ballot.

Of course, whether such an initiative would pass is a separate question, but there are a few factors that make the odds pretty good. One is that it’s very difficult for the electorate to make informed choices, and I don’t say that as any sort of insult to the average California voter. In the most recent election this past June I timed how long it took to figure out who and what to vote for and clocked it at a whole hour. And that’s with me, a lawyer practiced in reading and evaluating law and policy, living in an unincorporated area of California, meaning that I was spared having to wade through any city candidate or ballot measure choices. I just had to vote on candidates for all county, state, and federal offices, and on all county and state ballot measures. And this was in June, where there were fewer choices all around than there will be in November, yet it still took an hour to make any sort of responsible decisions before I was prepared to head to the polls. Of course, not everyone has that hour, and for many it will likely take longer, which means that the electorate tends to be dependent on campaign advertising to help them make those choices. But if someone has a few million dollars to spend to get an initiative on the ballot, they may easily have a few more, or a lot more, to spend on that advertising, and their opponents, no matter how principled in their opposition, just as easily may not.

The reality is that anyone who can spend a few million dollars to get an initiative on the ballot can use that money to put an electoral gun to the head of policymakers and force them to legislate for their desired policy in exchange for withdrawing the initiative from the upcoming election. Because at least if the policy gets implemented via the legislature’s hand, rather than through the initiative process, the legislature might be able to temper some of its language. Also, by being an ordinary bill, it would theoretically be more changeable in the future, subject only to ordinary legislative majorities and not dependent on someone funding a new initiative that could successfully override it.

As this article in the Sacramento Bee describes, the soda tax ban is a case study of this dynamic. A business group wrote a proposal that would have created some significant limitations in the state’s ability to raise revenue. It then shopped around the proposed initiative until it found someone willing to underwrite the signature-gathering necessary to get it on the ballot. That someone turned out to be the beverage industry, which generally hates soda taxes.

The relative merits of soda taxes are beyond the scope of this post. Suffice it to say, certain California communities like them, often as a way of raising revenue for public health programs and deterring the over-consumption of unhealthy drinks. Several of these communities have already passed a few such taxes.

But after the beverage industry underwrote the effort to get enough signatures to qualify the tax-limiting initiative for the ballot, an initiative that did more than just ban soda taxes but instead affected the state’s taxation ability more broadly, the legislature found itself having to play electoral roulette: perhaps the ballot measure might fail and everything would be fine, but if it passed, it risked messing up the fiscal health of the state and all the policies and programs the legislature wanted to fund. So it capitulated and did a deal with the initiative’s sponsor to bar any other California communities from passing their own soda taxes for the next 12 years in exchange for having the ballot initiative withdrawn.

In fact, June was a busy month for legislative capitulation, because right around the same time that the legislature did that deal it also did a deal with the sponsors of the “Consumer Right to Privacy Act of 2018” initiative that had also qualified for the November ballot.* Because that initiative, if it passed, would definitely cripple the Internet, the legislature instead agreed to pass the CCPA, which will only probably cripple it, but at least has the potential for improvement.

And that’s what this post is really about, this extortionate ability for basically anyone with $4 million to spend to blackmail the legislature to set aside its own legislative judgment and build into California law whatever terrible policy the person with the money wants. Sure, for any policy that is so awful or unpopular there’s always the chance that it might lose at the polls come Election Day, and from time to time ballot initiatives do get shot down. But it’s very easy for garbage to get through, and wealthy minority voices count on that possibility when they try to ram through all sorts of policies that aren’t necessarily good ones for Californians or its businesses ? including on matters of tech policy.

On our best days these tech policy challenges require careful, nuanced treatment. We should look to the legislature, and legislators, to give it that careful, nuanced treatment before imposing drastic changes in the law that will affect them. But they can’t give these regulatory proposals that sort of necessary attention they deserve if for a mere $4 million or so people can force them to rush through law that has been drafted without any of the care or necessary transparency sound regulation requires.

And when they are forced to pass a law like that, as they were just now with the CCPA, it is unlikely to be something we should cheer.

* Also, per the Los Angeles Times article linked above, “A third proposal, asking taxpayers to subsidize lead paint cleanup projects, was withdrawn by paint companies in exchange for lawmakers scrapping a slate of bills designed to impose new rules on the industry.”

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Comments on “What Soda Taxes And Lead Paint Have To Do With Internet Regulation”

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Anonymous Coward says:

very difficult for the electorate to make informed choices

particularly when so much of their content is derived form psychological profiling. Profiling that originates from intrusions into citizens civil rights. So there is a chicken and egg problem to be considered.

“The reality is that anyone who can spend a few million dollars to get an initiative on the ballot can use that money to put an electoral gun to the head of policymakers and force them to legislate for their desired policy in exchange for withdrawing the initiative from the upcoming election”

Which is evidence that the level of influence interjected by corporate interests constitute a direct threat to the sovereign authority of the state. With the issue of consumer psychological profiling in play, the capacity for propaganda by corporate interests will exceed even the states ability to communicate with its consituents.

So there is a question as to whether CA is willing to fight for its sovereign right to communicate with its citizens, or permit its authority to be sublimated into a rubber stamp corporate fascism. The fact that they are willing to legislate at all, suggests they are at least somewhat aware of their predicament.

ECA (profile) says:

Where is the law made?

I dont know about HOW the other states do this..
But I cant see WHY the citizens of a state cant create their OWN Law..as long as they get enough signatures.

Part of the problem is that AFTER you get it filled out and everyone signing..They will take it to the State legislature and CHANGE IT. then let us vote on ALL those changes or kill the bill.

Many countries have a “trust in gov.” type of vote..
Whioch would be Great, if it had an affect. LIKE Locking up the gov. until we can fix/change/re-elect/adjust things to WORK better..
we really need something that will scare them, Besides using our Guns/weapons..
even NOW, if we tried to pass something like thing it would be thrown int he garbage, and if NOT, it would take months and years before it got into beign voted on, BY THOSe we wish to control.

Anonymous Coward says:

Re: Where is the law made?

I cant see WHY the citizens of a state cant create their OWN Law..as long as they get enough signatures.

The citizens of a state might tend to write Law..with your idiosyncratic cApItAlIzAtIoN and punc,tu,ation. And that, in turn, might tend give judges a HEADACHE. Which would be BAD.

danderbandit (profile) says:

This is, IMO, a huge problem in California. The state constitution has been amended over 480 times, compared to 27 times for the US Constitution which is about 100 years older. So many of the initiatives are purposely written to be misleading as to what there actual intent is, which means most of the time deciding what to vote for is trying to decipher a different language. And trying to find out who is funding the initiative usually doesn’t give you any help either. If the people we elected were actually there to work for us, instead of their large donors, and there main goal wasn’t just to get elected again, we would be a lot better off.

cpt kangarooski says:

Re: Re:

The state constitution has been amended over 480 times, compared to 27 times for the US Constitution which is about 100 years older

That’s not really all that odd. The federal constitution is weird. It’s very short and very vague and only has to empower a limited government. And it has a very very high bar to be amended. Most state constitutions are long, get into details about various subjects, and have to empower plenary governments.

The problem is if the process is abused. As you note, it’s hard to tell and hard to prevent. There may not be a good solution.

danderbandit (profile) says:

Re: Re: Re:

Point taken, but 480 amendments seems like an exorbitant number. Every change in state law shouldn’t be a constitutional amendment. But I guess that was the point of the article.

Where some other commenters were saying that is what democracy is all about, special interests are using this process for ‘special’ purposes, and hiding those purposes from the public that can’t be bothered to read beyond the Facebook feed tailored to fit their existing viewpoint.

Oz says:

Okay I’m bit confused. Of all the sites that would support CCPA I thought Techdirt would one of the first. This is the first article I’ve seen here that even mentions it. Doesn’t it mostly do what this site has been arguing for the past 10 years? I’m sure there will have to be some minor fixes, but I thought CCPA seemed like a step in the right direction. If Techdirt is against CCPA (Is this the case or is this article just the opinion of the author?) I would love to see a detailed breakdown, but complaining about the process doesn’t do a whole lot for your point.

That One Guy (profile) says:

Re: Re:

From Insider Chat in response to an article about it’s passing:

Mike Masnick: it’s not. it’s worse than gdpr…
we wrote about it a bit yesterday, but will have more on it later.

My guess is that while it’s well-meaning there’s some some hefty side-effects that can cause some damage, though we’ll have to wait for the article(s) to find out why TD/Mike doesn’t care for it.

btr1701 (profile) says:

Re: Re: Re:

If it’s such a danger to the point where we’re talking about “breaking the internet” again, one would think that of all places, California would have the means to fight whomever is financing it. The state is home to Google, Facebook, Twitter, and Apple, along with most of the rest of the internet titans. One would think they’d be able to finance an opposition to this initiative that would crush whoever is financing it.

Glenn says:

Citizenship is a full-time job

Spending an hour once or twice a year is not too much to ask of those who want a government that represents their interests. Frankly, everyone should spend all the time necessary to understand what their legislative representatives, delegates, senators et al are doing with every minute of their time when they’re supposed to be working for us. Clearly this doesn’t happen–not anywhere in the US. I guess, collectively, we get what we deserve–too little representation, too much taxation, and way too many laws for a legal system that is ultimately designed to do nothing more than control instead of providing justice. And, oh yeah… did I mention the rampant corruption?

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