How San Diego fueled California’s gas tax repeal effort

Carl DeMaio stood outside the San Diego County Registrar of Voters Office in April, surrounded by television cameras and boxes filled with ballot petitions. He had spent more than six months preparing for this moment.

Republican Diane Harkey stood to DeMaio’s left. She’s running for one of the most competitive congressional seats this year in a district that straddles San Diego and Orange counties. To DeMaio’s right was Rancho Santa Fe businessman John Cox, California’s Republican governor candidate.

DeMaio and his team were holding a news conference to announce their achievement: They were submitting signatures to repeal California Senate Bill 1. The law, passed last year, increased the state gas tax by 12 cents and created a vehicle registration fee to fund road repair and transportation projects.

Radio talk show host DeMaio is the force behind the gas tax repeal initiative, and his ability to rally San Diego voters and politicians to his cause has led to a statewide movement. More than one-fifth of the 963,907 signatures to put Proposition 6 on the November ballot came from San Diego County, almost eclipsing the total from the much larger Los Angeles County.

DeMaio’s political committee funding the repeal, Reform California, has more than 25,000 donors, and more donations came from San Diego than any other city, an inewsource analysis found.

“A lot of people have given up hope, they’re moving out of the state, and they’re basically withdrawing from advocacy groups and civic participation,” said DeMaio, a former San Diego councilman. “So maybe this will inspire them to get engaged again, but we have a lot of rebuilding to do statewide.”

Prop. 6 is now considered a potential historic opportunity for Republicans in California, a state where Democrats dominate both houses of the Legislature and voters with no party preference surpassed registered Republicans this year.

Even in San Diego County — a place in California where Republicans still hold many of the important offices — Democrats could flip key seats in the November election. Democrat Nathan Fletcher is poised to win a spot on the all-Republican county Board of Supervisors. Nine-term Republican Rep. Darrell Issa of Vista is not seeking re-election, leaving Harkey and Democrat Mike Levin to vie for the open seat. Republican Rep. Duncan Hunter of Alpine was indicted in August for campaign finance violations, giving his long-shot Democratic challenger Ammar Campa-Najjar a chance.

“San Diego for many, many years, for decades was considered to be a bastion of conservatism and the base of the Republican Party in California,” said Dan Schnur, a veteran Republican political consultant who worked on three presidential campaigns. “While there are still Republican strongholds throughout the San Diego region, the area has become much more balanced politically in recent years.”

Many Sacramento lawmakers, labor unions, transportation advocates and pro-business groups have defended the gas tax, saying the money will boost jobs and economic growth. San Diego County has already received more than $1 billion in infrastructure funding from the tax, which started being collected this past November. If Prop. 6 passes, that tax revenue would disappear.

San Diego Democrats, including state Assemblyman Todd Gloria, have questioned DeMaio’s tactics and motives.

“It’s pretty obvious that Proposition 6 is a product of the political climate that we’re in where Republicans are terrified about their electoral prospects this November,” said Gloria, who served on the San Diego City Council with DeMaio.

A June SurveyUSA poll shows 46 percent of voters support Prop. 6, while 33 percent oppose it. But the election is still two months away.

“Because this is a fight that’s being raised out of San Diego,” said Schnur, “it gives the city and the region the chance to be a much more impactful political player than has historically been the case.” https://www.youtube.com/embed/ZPKIrY31304?rel=0

San Diego roots

DeMaio, after losing elections for mayor and Congress in San Diego, landed a conservative radio talk show on KOGO in 2015. The DeMaio Report — a three-hour program running Monday through Friday — now broadcasts in San Diego, Orange and Riverside counties.

When the gas tax passed in April 2017, DeMaio said he started hearing from listeners. The gas tax was more than they could handle. The state was already too expensive to live in, and this made it even harder, he said.

By October, DeMaio had already gathered more than 250,000 signatures to support a ballot initiative repealing the gas tax.

“I want to empower my listeners,” DeMaio said. “I want to empower people who are concerned about San Diego and California and say, look, we can do this if we all work together.”

He became the chairman of Reform California, the political committee designed to take down the gas tax. More than 25,000 people have donated $1.9 million to that committee.

Reform California chairman Carl DeMaio. Video produced by Brad Racino.

More donations have come from San Diego than any other city — more than 3,300 of them so far. Other parts of San Diego County also made the top of the donation list, including Escondido, Carlsbad, El Cajon and Oceanside.

Grassroots funding is uncommon for statewide ballot measures. Reform California is one of seven committees raising funds to support or oppose Prop. 6, but it’s the only one funded primarily by small donors. One-third of DeMaio’s donors gave $100 or less.

“Ordinarily, initiatives in California become the plaything of corporations, of unions and of really rich individuals who can cut those big checks, rather than small donors,” said Thad Kousser, a University of California San Diego political science professor.

A group opposing the gas tax repeal called Stop the Attack on Bridge and Road Safety has raised $24 million, more money than all of the other gas tax committees combined. In total, the repeal effort has raised $4.3 million.

The committee’s biggest donors are labor unions and pro-business nonprofits, including the California Alliance for Jobs and the Laborers Pacific Southwest Regional Organizing Coalition. Eight donors gave $1 million or more.

In a large state like California, grassroots campaigns often struggle — money is important to get the word out through television ads and other media buys. Combined, the committees opposing the gas tax repeal have raised more than five times what the supporters have.

DeMaio said he plans to compete with the opposition by touring as much of California as he can and leading more than 20,000 volunteers in a “guerilla marketing” campaign. He’s giving out flyers, lawn signs and gas pump stickers. He talks to his radio listeners about Prop. 6 every weekday at 4:45 p.m., including updates from his rallies when he’s on the road.

Lawn signs for the Yes on 6 campaign at a volunteering event on Aug. 11, 2018. (Megan Wood/inewsource)

The repeal campaign relies on the support of politicians, too. Reform California’s Gas Tax Repeal Heroes program recognizes candidates who commit to running anti-gas tax ads or donating to the cause.

“I really have to hat-tip to Carl for the job that he has done in all of the organization efforts,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “He’s been as important as anybody in this entire effort.”

The taxpayers group has spent more than $70,000 to support the gas tax repeal and is working closely with DeMaio’s campaign. The group has funded at least nine successful tax reduction initiatives in California, but Coupal thinks this one is different.

“This is far more organic,” he said. “This really reminds me more of Proposition 13, which passed 40 years ago this summer, in that it is more of a grassroots operation with a lot of people joining together for a common goal.”

The late businessman Howard Jarvis led the successful Prop. 13 campaign in 1978 despite being outspent by opposition groups. The measure, spurred by escalating property taxes, restricted property tax increases to 1 percent of a home’s value based on the year it was bought and limited the amount the tax could be increased annually.

Prop. 13 launched a taxpayer revolt in California and across the country. Coupal hopes history repeats itself.

The battleground

The San Diego County Republican Party knows how to rally.

The party’s August central committee meeting was scant with procedure. Instead, it featured more than two hours of rousing speakers covering the party’s 2018 platform. Attendance hit a record high of 621 people — enough to fill the chairs in the Town and Country hotel convention center and then some.

The vice chairman of the California Republican Party drove down from Los Angeles to see it for himself.

“We got 58 counties in the state of California, and this is the best county party in the state,” David Hadley said to a cheering audience. “I didn’t come down here to report to you on what the California Republican Party can do for you. I’m here to learn and take what you have done in San Diego — and what Tony [Krvaric] and this great board has done in San Diego — and help spread that around the rest of the state.”

More than 600 people filled a room at the Town and Country hotel convention center for a meeting of the San Diego County Republican Party on Aug. 13, 2018. Repealing a gas tax increase was a main topic. (Brad Racino/inewsource)

Krvaric has been the county Republican Party’s chairman since 2007 and plans to step down after this election season. During his tenure, Republican voter registration fell from a three-point lead over Democrats to a seven-point deficit, but Republicans still hold more than half of the elected offices in the county.

The gas tax repeal campaign started in the local Republican Party’s headquarters. It’s where many San Diegans first volunteered to collect signatures for Prop. 6 and where tens of thousands of those signatures on ballot measure petitions were verified before being sent to the state for approval.

The party’s support for the campaign is as much policy as it is politics. Republican leaders hope to hold onto competitive seats this November — and maybe win some new ones — by leveraging the gas tax repeal effort. They say it’s a chance to show voters the Democratic Party doesn’t care about working families.

An attendee at the August meeting of the San Diego County Republican Party waves an American flag. (Brad Racino, inewsource)

“The Democrats don’t give a crap about people who are struggling,” Krvaric said. “And you can quote me on that.”

Republicans have already seen Prop. 6 work. In June, voters in northern Orange County recalled Democratic state Sen. Josh Newman for voting in favor of the gas tax.

Two prominent Republican candidates have supported the gas tax repeal movement since its infancy.

Harkey, the Republican running against Levin for Congress, is co-chair of the Gas Tax Repeal initiative. She has donated $35,000 to repeal groups. And Cox, the Republican running against Democrat Gavin Newsom for governor this fall, is an honorary co-chair of Reform California. He has given $252,500 to repeal groups.

“It’s very important to a lot of people,” Harkey told inewsource. “It’s an issue that you can focus on. It’s not complex.”

Diane Harkey, Republican candidate for the 49th Congressional District seat, is shown with San Diego County Republican Party Chairman Tony Krvaric on primary election night, June 5, 2018. (Megan Wood/inewsource)

The district that Harkey is running in was considered a safe Republican seat until 2016, when Congressman Issa narrowly defeated Democrat Doug Applegate. After Democrats realized the 2018 election would be their opportunity to unseat Issa, the incumbent decided not to seek re-election this year.

San Diego Democrats began winning formerly safe Republican races a few years ago. In 2012, Democrat Scott Peters upset Republican Congressman Brian Bilbray in a district that stretches from Coronado to La Jolla and east to include Poway and Rancho Bernardo. Since then, Peters has managed to defeat Republican challengers, including DeMaio in 2014.

The same year Peters won a seat in Congress, voters elected Bob Filner San Diego’s mayor — the first time a Democrat had held that office in 20 years. Democrat Dave Roberts also landed a seat on what had been an all-Republican county Board of Supervisors. (Filner and Roberts later faced scandals, and neither kept their seats.)

Despite the apparent popularity of the gas tax repeal in San Diego County, the local Democratic Party aims to overcome that momentum the Republicans are counting on.

“If they’re successful in repealing this legislation, in a year, two years, five years, people will be bitterly complaining about why (state Route) 78 doesn’t move,” said Jessica Hayes, chair of the San Diego County Democratic Party. “Why aren’t they doing anything with 78? Why didn’t they fix the 805? Why don’t we have road repair here?…

“And we’ll have to say, well, the Republican Party took it away from you,” Hayes said.

A working families campaign

The core of the Prop. 6 campaign is four words: You can’t trust Sacramento.

“It’s unfair to working families, it hits them pretty hard and it comes at a time when the politicians have shown that we can’t trust them to fix our roads,” DeMaio said. “They always divert and raid the funds.”

DeMaio’s skepticism doesn’t stop with Democrats. He has called out the California Republican Party and the state Chamber of Commerce for ignoring working families, too.

“Part of the problem I see we have in the state is that you don’t really have a functional effective opposition party,” he said. “A lot of decisions are made around the special interest table up in Sacramento. And the Republican Party told us, no, no, you don’t play in this. We’ve already made the decision for you. And if you want our checks, you’ll stay on the sidelines.”

San Diegans are a prime example of the kinds of voters who could be swayed by DeMaio’s pitch. About 62 percent of likely voters in the San Diego and Orange County region don’t trust the state government, according to polling from the Public Policy Institute of California.

DeMaio is quick to remind voters that about one-third of the gas tax money has been designated for infrastructure projects other than road repair, including public transportation. San Diego County covers 4,526 square miles and commuters rely on roads, rather than public transit, to drive to work.

He argues that loopholes in the tax law will allow some of the funds to pay for state budget deficits and pensions.

But the Republican Party faces an obstacle to winning over working families.

“When the Republican Party says we are fighting for the working men and women in California, they have to recognize that they are butting up against a much bigger problem,” said Darry Sragow, a longtime political strategist for California Democrats. “And that is that the party has become known as hostile to people of color.”

In 1994, former Gov. Pete Wilson, who was elected San Diego’s mayor three times beginning in 1971, ran his re-election campaign on Proposition 187. The law established a citizenship screening test and prevented immigrants living in the U.S. illegally from using non-emergency services, including public schools.

When the measure passed, it hurt the California Republican Party with Latino and African-American voters, a problem that persists today. A report released in August by the Public Policy Institute of California shows 77 percent of likely Republican voters are white, while half of likely Democratic voters are white. And 22 percent of likely Republican voters earn less than $40,000 a year, compared to 34 percent of likely Democratic voters.

Republican leaders behind the gas tax repeal want to persuade working-class Californians to reconsider how they feel about the GOP.

They’re warning that the gas tax will increase with the rate of inflation. They say the estimated $779 that each Californian will spend annually because of the gas tax is similar to the price a typical family spends on Christmas. They bring up a Legislative Analyst’s Office report, which says Caltrans is overstaffed by 3,500 employees, costing $500 million annually.

San Diego County Democrats have pushed back. Assemblyman Gloria called DeMaio’s theory that the tax money will be spent on pensions “one of the most deceptive arguments I have ever seen in politics.”

“It’s fine to make an argument to be anti-tax, to support more potholes in our communities, but you can’t do it by lying to the voters,” Gloria said. “Voters should hold the people who are perpetrating these lies accountable.”

San Diego Democratic Assemblyman Todd Gloria. Video produced by Brad Racino.

Democrats have their own facts to cite. In June, voters passed Proposition 69, which requires gas tax funds from SB 1 to be used for transportation projects only. And commuters in San Diego County spend $2,000 a year on the hidden costs of poor roads, according to the transportation research group TRIP.

Of the $1 billion in gas tax money San Diego County has already received, $128 million has gone for road work, excluding highways, and $195 million to expand and maintain Interstate 5.

But Prop. 6 is retroactive, so all the money already awarded would disappear if the proposition passes.

That’s fine with DeMaio. He plans to spend the next two months before Election Day hitting a new city every three to five days, holding rallies and news conferences whenever possible. He’s convinced the repeal will succeed. Once it does, he said he’s prepared to come back with three ballot initiatives for 2020 that would help working families.

If they happen, those efforts will probably be based out of San Diego.

“I don’t know if this is indicative of more to come,” said Jessica Levinson, a campaign finance expert and political science professor at Loyola Law School. “But I know that it’s at least proved that San Diego can flex its political muscle when it comes to getting something on the ballot.

We’ll let you know when big things happen.
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