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About three-fourths of the Legislature’s 120 seats are occupied by Democrats, which renders the Capitol’s relatively tiny band of Republicans pretty much irrelevant.

However, one Republican, Jay Obernolte of Big Bear Lake, has carved out an effective role in bolstering transparency in and accountability for countless billions of dollars in tax and bond measures that local governments either place on the ballot or issue themselves.

Dan Walters

Opinion

Several years ago, Obernolte won passage of a measure, Assembly Bill 195, that requires the ballot summaries of tax and bond proposals to include estimates of how much they would increase taxes.

Local officials intensely dislike the measure because the summaries are limited to 75 words and they prefer to use those words to extol the wonderful things the new taxes and bond funds would finance.

Almost immediately, local government lobbyists began agitating to repeal it. Last year, Sen. Scott Wiener, a San Francisco Democrat, wrote Senate Bill 268, which would have allowed local officials to shift the required tax information from ballot summaries into the voter pamphlet or another separate statement, where it would get much less attention.

Hoping to Rack up Another Win for Accountability

SB 268 cleared both legislative houses easily, but Gov. Gavin Newsom, to his credit, vetoed it. “This bill makes modifications to ballot label requirements and notification requirements to voters for a local measure that imposes or increases a tax with more than one rate or authorizes the issuance of bonds,” Newsom said. “I am concerned that this bill as crafted will reduce transparency for local tax and bond measures.”

Score one for Obernolte.

This year, the dogged Republican is hoping to rack up another win for accountability with Assembly Bill 2155, which would overturn a rather bizarre state 2019 Supreme Court decision on the validity of local bond issues.

On the day after Christmas, by a 6-1 margin, the court decreed that the validity of municipal bond issues may be challenged only by those directly involved in the transactions, thus freezing out civic watchdogs and other outsiders.

It earned the six majority justices a scathing rebuke from Chief Justice Tani Cantil-Sakauye.

The case involved bonds that the City of San Diego issued in 2015 to refinance bonds that had been issued for the construction of Petco Park, home of the San Diego Padres baseball team.

Obernolte’s New Bill Provides an Opportunity

The refinancing bonds were approved by San Diego’s city council and its Public Facilities Financing Authority. Afterward, a local civic organization, San Diegans for Open Government, sued the city and the financing authority. The group contended that the bonds violated Government Code Section 1092, which deals with conflicts of interest, because one member of the financing team had an “interest in one or more contracts for the sale of the 2015 bonds.”

The conflict hinged on the legal meaning of Section 1092’s authorization for “any party” to challenge the transaction.

The Supreme Court took the narrow approach, declaring that “any party” is restricted to just those directly involved. However, Cantil-Sakauye excoriated the ruling.

“I do not believe the Legislature created a scheme that counts on the foxes to guard the henhouse and leaves taxpayers helpless to halt even the most egregiously conflicted government bond issuances,” she wrote. “The likely result under the majority’s rule is that no one will bring a challenge to avoid a government contract afflicted with a conflict of interest.”

The decision and Cantil-Sakauye’s dissent left it to the Legislature and Newsom to bolster the right of the public to challenge the validity of such bond issues and Obernolte’s new bill provides that opportunity.

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.

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