What a fiasco.
Tim Draper’s misguided proposal to declare California a failure and break it into six pieces has failed to qualify for the November 2016 ballot, despite his investment of nearly $5 million in an army of signature gatherers, media consultants and lawyers.
Had Draper’s “Six Californias” initiative not imploded last week, it would have certainly failed at the ballot box in 2016. So Draper avoids spending untold millions of additional dollars in campaign for his initiative and California’s brand avoids a 24-month thrashing in state and national media.
There are a few lessons to be learned from this episode.
Lesson #1: Bad ideas usually implode. So it is better to start with a good idea.
Breaking California into six pieces would not solve any of the problems California may have, and would create thousands of new ones. For example, the cost of itemizing every asset and liability of state government and assigning them to one of six new entities would cost billions, if it could be accomplished at all. The proposed mix of states would create both the richest state in the country, and the poorest.
California isn’t perfect. There is room for reform and experimentation and plenty of ideas to choose from. For example, California’s open records law could be expanded to include the State Legislature. California’s constitution could be amended to allow for contracting out of government services in order to improve quality or reduce cost (the Constitution currently bans any contracting that might displace a single state worker).
Draper could have fished around for better ways to achieve his stated goals. The next reform-minded billionaire should approach his or her task with a more open mind.
Lesson #2: Abstract arguments are easily crushed by concrete illustrations.
Draper painted in very broad, abstract strokes. He said his initiative would allow California to “reboot” and “start fresh.” Last week, Draper tweeted that new states could become “the next Estonia,” as if anyone knows what that could mean.
In contrast, our arguments against his proposal were specific and concrete. For example, we argued that breaking up the University of California would force two-thirds of California families to pay out-of-state tuition, at a total estimated cost of $2.4 billion. This is a real-world impact on approximately 100,000 California families. When confronted at San Francisco’s Commonwealth Club about this, Draper only said: “If you live in Marin County and want a special deal to go to UCLA, that may continue, that may not.”
We also pointed out that many taxpayers would have had to file two or more state income tax returns, or sell businesses in one part of the state in order to consolidate in another.
And others argued California’s new health insurance purchasing pool would have to be broken up into six new purchasing pools,which would likely increase health insurance rates or reduce consumer choice throughout the state.
Against this arsenal of silver bullets, Draper only fired blanks. Would-be reformers should ask themselves: What are the concrete examples I can show voters they will be better off if they vote for my proposal?
Lesson #3: The interests of political consultants are not aligned with the interest of donors.
The signature-gathering process for Six Californias cost Draper a reported $4.4 million, which may be a record. Yet fully a third of the signatures were flawed. The firm in charge of gathering this signatures says their so-called “validity rate” was much higher, but they appear to have been paid for effort, not results.
Media costs (television and radio advertising and direct mail, primarily) consume 90 percent or more of the typical initiative campaign budget, and most of those expenditures include a commission to the media consulting and campaign manager. This provides a strong incentive to spend more on television adsat the expense of all other critical functions in a campaign – including press relations, social media, economic analysis and other research.
Campaign consultants should be compensated for results. One way to do this is to cut back on media commissions, and instead provide a “win bonus” to the entire consulting team, payable upon success at the polls.
Six Californias will live on as a Wikipedia entry, but that is the only impact of Tim Draper’s hefty investment. Anyone seeking to make change in California through the ballot box should learn from his mistakes.
Joe Rodota is a former Cabinet Secretary and Deputy Chief of Staff to California Governor Pete Wilson. He is co-founder of One California, a committee opposed to the Six Californias ballot measure.