California Proposition 10 (2008)

California Proposition 10 (2008)

California Proposition 10, also known as the California Alternative Fuels Initiative, is an initiated state statute that will appear on the November 2008 ballot in California.

Proposition 10 is one of two ballot initiatives focusing on alternative fuels that will appear on the November 4 ballot in California. The other measure, Proposition 7, is sometimes referred to as Big Solar while Prop. 10 is sometimes referred to as Big Wind.

Provisions of the initiative

The initiative authorizes $5 billion in bonds paid from state’s General Fund, allocated approximately as follows:

* 58% in cash payments of between $2,000 and $50,000 to purchasers of certain high fuel economy and alternative fuel vehicles;
* 20% in incentives for research, development and production of renewable energy technology;
* 11% in incentives for research and development of alternative fuel vehicle technology;
* 5% in incentives for purchase of renewable energy technology;
* 4% in grants to eight cities for education about these technologies; and
* 3% in grants to colleges to train students in these technologies.

Estimate of fiscal impact

According to the government's fiscal analysis office, the initiative would entail:

* "State costs of about $9.8 billion over 30 years to pay both the principal ($5 billion) and interest ($4.8 billion) costs on the bond.
* Payments of about $325 million per year.
* Increase in state sales tax revenues of an unknown amount, potentially totaling in the tens of millions of dollars, over the period from 2009 to beyond 2018.
* Increase in local sales tax and VLF revenues of an unknown amount, potentially totaling in the tens of millions of dollars, over the period from 2009 to about 2018-19.
* Potential state costs of up to about $10 million annually, through about 2018 -19, for state agency administrative costs not funded by the measure."


Allison Hart, Mitzi Dudley and Thomas Daly filed the initial ballot language.

Funding and Boone Pickens

As of September 24, there are three major listed donors to the initiative:

* The Clean Energy Fuels Corp. (CEFC), which has donated $3,747,250.
* Aubrey McClendon, $500,000. McClendon lives in Oklahoma and is the co-founder of Chesapeake Energy. [ [ List of $5,000 + donors to Proposition 10] ]
* Westport Fuel Systems, $250,000.

The Clean Energy Fuels company is owned by Boone Pickens. Columnists have derided Pickens and Clean Energy Fuels for sponsoring this initiative because it may set up the company and Pickens for a financial windfall. The share price of Clean Energy increased by 20% from May-July 2008. [ [ "T. Boone’s Stake: Oil Tycoon’s Got a Dog In California Energy Fight", July 29, 2008] ] , [ [ "LA Times knocks off T. Boone's green halo"] ] , [ [ "Referendum process now being used by wealthy"] ] , [ [,0,253067.story "Los Angeles Times", "T. Boone Pickens backs Proposition 10, from which he would profit", September 25, 2008] ]

The San Jose Mercury News has criticized the funding behind the measure, saying that Pickens stands to profit from the measure if it passes.

On August 11, it was disclosed that U.S. House Speaker Nancy Pelosi is an investor in CEFC. [ [ "Pelosi #dontgo Bombshell: Money", August 11, 2008] ] , [ [ "Nancy Pelosi's financial disclosure statement for 2007"] ]

Todd Campbell, Clean Energy's public policy director, in response to criticisms about CLNE sponsoring Prop. 10 because of potential benefits to the company told an "'Associated Press" reporter, "I don’t think it’s a given that Clean Energy is going to cash in. I wish it were that simple." [ [ "New York Times Green Inc. blog", "The Pickens Plan and Proposition 10", September 25, 2008] ]

Arguments in favor of Prop. 10

The main arguments offered in favor of Prop. 10 are:

* The funding it provides will allow the generation of electricity from renewable sources, and provide consumer rebates for the purchase or lease of "clean alternative fuel vehicles".
* The funding will allow the replacement of "older polluting diesel trucks with clean alternative fuel trucks" and provide for research into alternative fuels.
* The programs funded by Prop. 10 will help reduce dependence on foreign fuel produced by "hostile foreign governments."
* The diesel trucks that could be replaced produce dangerous pollution.
* Alternatives to high-priced gasoline are important. [ [ California voter guide, arguments for and against Prop. 10] ]


As of September 18, consultants working to pass Proposition 10 include:

* Forde and Mollrich, which has received about $202,000, in addition to the $660,000 it was paid to collect signatures.
* Allison Hart, who has received $90,000.
* Wilson-Miller Communications, which has received $180,000.
* Greenberg, Quinlan, Rosner Research, which has received $112,000. [ [ "Expenditures of the Prop 10 campaign committee"] ]

Path to the ballot

Prop. 10 was qualified for the ballot through a petition drive conducted by Progressive Campaigns, Inc., at a cost of $2,418,178 and Forde and Mollrich, which was paid $660,084 for signatures. The total signature cost was $3,078,263. [ [ Expenditure detail] ]


Opposed by

* An officially filed opposition group called "No on Proposition 10; Californians against the $10 Billion Lemon", registered with the California Secretary of State. The organization reports no financial activity through September 18, 2008. [ [ Campaign filing for "No on Proposition 10; Californians against the $10 Billion Lemon"] ]
* The Union of Concerned Scientists [ [ "Union of Concerned Scientists": No on California's Proposition 10] ]

Arguments against Prop. 10

* The proposition is a "laundry list of cash grabs -- from $200 million for a liquefied natural gas terminal to $2.5 billion for rebates of up to $50,000 for each natural gas vehicle" that would squander at least $9.8 billion in taxpayer money on Pickens' self-serving natural gas agenda." [ [,0,2980323.story "Los Angeles Times", "T. Boone Pickens' 'clean' secret", July 29, 2008] ]
* Taking $10 billion out of the state's general fund over a 30 year period to underwrite the cost for individuals and businesses to purchase low-emission vehicles "is not a smart use of money" considering the state is "already sagging with debt". [ [ "Mercury News", "Editorial: Prop. 10 looks 'green' but it's the wrong shade", July 28, 2008] ]
* Michael Shames of San Diego's Utilities Consumers' Action Network, says that a shift to natural gas is "problematic in a lot of ways" including that "few mechanics know how to fix natural-gas engines and few filling stations offer natural gas."
* The proposition was initiated by one person/interest group and as such lacks the vetting that would have come had it gained input from a wider variety of sources. Shames says, "A well-intentioned individual with an excessive amount of money doesn't necessarily have the capacity to present a comprehensive policy initiative on a complex topic." [ [ "Referendum process now being used by wealthy"] ]
* Judy Dugan, a spokesperson for Consumer Watchdog in Santa Monica, said only one car currently manufactured (the Toyota Prius) meets the rebate standards in Prop. 10. "On the basis of market distortion alone, this is crazy. There's already a federal subsidy for natural gas vehicles, which Pickens is lobbying to be continued through 2018."

Newspaper endorsements

Opposed to Prop. 10

The Los Angeles Times editorialized against Prop. 10 on September 19, saying, "Spending bond money on something as intangible as privately owned vehicles is a terrible idea unless there is a clear public benefit." [ [,0,4148424.story "Los Angeles Times", "Reject Proposition 10", September 19, 2008] ] The Santa Monica Mirror said, "Self-serving Prop. 10 sounds good, should lose". [ [ "Santa Monica Mirror", Self-Serving Prop. 10 Sounds Good, Should Lose", September 18, 2008] ]

The San Francisco Chronicle is also opposed, writing, "Prop. 10 couldn't even win a free pass for good intentions". [ [ "San Francisco Chronicle", "Why Proposition 10 is a boondoogle", September 25, 2008] ]

External links

* [ Facts on Prop 10] , official website supporting Prop. 10.
* [ No on 10 Website - A project of the Consumer Federation of California]
* [ Official California voter guide for Proposition 10]
* [ Full text of the initiative]
* [ Signature count pending]
* [ "Number nine, number nine, number nine"] , Los Angeles Times, June 6, 2008
* [ Prop 10 information page]


Additional reading

* [ 2 energy propositions flawed, critics say] , San Francisco Chronicle.
* [ My Take on T. Boone's California Prop 10] , by Judy Dugan.
* [ Political winds buffet California measures on energy] , Sacramento Bee, September 15, 2008.
* [ Opinion: Proposition 10 fights global warming]
* [ Why should we vote for Prop 10?]
* [,0,1229141.story Prop 10: Fueling a cleaner California]

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