SAN FRANCISCO — The California Public Securities Association is one of the largest donors to the campaign against Proposition 90, a Nov. 7 California ballot measure to limit the use of eminent domain and restrict governments’ ability to regulate land use.
The association’s issues political action committee contributed $400,000 to the “No on 90” campaign in August. Cal PSA is a trade group with about 50 public finance underwriting and law firms as members.
Proposition 90, called the “Protect our Homes” initiative by supporters, made the ballot in the wake of the backlash last year’s Kelo v. New London, Conn., decision by the U.S. Supreme Court, which affirmed the ability of a government to use eminent domain to further economic development.
The measure would prohibit the use of eminent domain for redevelopment, but opponents say it also contains a hidden, sweeping agenda to effectively limit the ability of governments to govern.
“It’s a tough one to get your arms around,” said Catherine Bando, vice chairman-secretary of the Cal PSA and a managing director at RBC Capital Markets.
Opponents of Proposition 90 say its language would allow any property owner to file a claim related to any statute, charter provision, ordinance, resolution, law, rule, or regulation that conceivably affects the value of any property.
“They expect a lot of lawsuits because a property owner can make a claim against a local government for any implied harm to their property,” Bando said.
Opponents also say the ballot measure would impose very expensive changes to eminent domain procedures, even when property is taken for a clear public purpose.
The language of the ballot measure states: “If private property is taken for any proprietary governmental purpose, then the property shall be valued at the use to which the government intends to put the property, if such use results in a higher value for the land taken.”
That could make it cost prohibitive to take land for a purposes like airports or toll roads, opponents say, and even for mundane purposes such as school construction, opponents say.
The pro-Proposition 90 campaign singled out the Cal PSA contribution for criticism, printing an open letter saying it “stinks of corruption.”
“This contribution represents ‘Pay to Play’ politics at its worst, given the many millions of dollars your company and other firms who comprise the California Public Securities Association make from doing business with local governments,” the letter said.
Stone & Youngberg LLC and RBC Capital Markets each gave $20,000 on their own.
As of Sept. 30, the “No on 90” campaign reported raising slightly more than $2.5 million, and spending $1.85 million, though more than $3 million of late contributions have been reported since Oct. 1, according to the secretary of state, including $1.8 million from a PAC set up through the League of California Cities to channel non-public funds.
The pro-Proposition 90 committee reported raising more than $3.7 million through September, largely through groups said to be financed by Howard Rich, a wealthy New York activist who is backing similar proposals in several other states,
In October, the committee reported a $1 million donation from “Americans for Limited Government,” which is chaired by Rich.
The “No on 90” committee last week announced that is has produced two commercials and begun to air them.
Both sides in the Proposition 90 campaign are financially dwarfed by other ballot measure campaigns — Proposition 86, a tobacco tax, and Proposition 87, a proposed tax on oil at the wellheads, generated more than $137 million in contributions through September.
