Proposition 32: Political Contributions by Payroll Deduction. Contributions to Candidates.

The Question

Should unions, corporations, government contractors and state and local government employers be prohibited from using payroll-deducted funds, or in some instances their own funds, for political expenditures?

The Situation

California and many local governments have laws covering campaign finance and related disclosure requirements, which are applicable to state and local candidates and ballot measures, but not to federal officials.  Under state campaign finance laws there are three types of political spending: 1) political contributions which  include giving money, goods or services directly to a candidate, at the request of a candidate, or to a committee that supports or opposes a candidate or ballot measure; 2) independent expenditures which are funds spent to support or oppose a candidate or ballot measure, but not coordinated with a candidate or a committee that supports or opposes a candidate or ballot measure; 3) other political spending which is spending by an organization to communicate political endorsements to its members, employees or shareholders.  There are various limits imposed on political contributions, but no such limits on independent expenditures or other political spending.

Many unions use some of the funds received through payroll deductions to make contributions to state and local candidates or candidate/ballot measure committees, or to make independent expenditures in political campaigns. Other than unions, few, if any, organizations currently use payroll deductions to finance political spending in California. 

The Proposal

Prop 32 would prohibit all organizations from using funds derived from payroll deductions for all political spending, including making contributions to state and local candidates or candidate/ballot measure committees, or making independent expenditures. It would also prohibit corporations and unions from making political contributions to candidates and their committees from their own funds, but would not prohibit them from contributing funds to ballot measure committees. The prohibition also would not affect a corporation or union’s ability to spend money on independent expenditures so long as the union or corporation does not do so using  payroll deductions. Prop 32 also would prohibit government contractors (including public sector labor unions) from making contributions to elected officials who play a role in awarding any contracts, from the time the contract is being considered to the date the contract expires. None of the foregoing restrictions would affect campaign spending for federal offices such as President of the United States or members of Congress.

Fiscal Effect

There would be increased costs to the state to investigate alleged violations of the law and to respond to requests for advice.  Combined, these costs could exceed $1 million annually.

A YES Vote Means

Unions and corporations could not use money deducted from an employee's paycheck for political purposes. Unions, corporations, and government contractors would be subject to additional campaign finance restrictions.

A NO Vote Means

There would be no change to existing laws regulating the ability of unions and corporations to use money deducted from an employee's paycheck for political purposes. Unions, corporations, and government contractors would continue to be subject to existing campaign finance laws.

Supporters Say

  • Prop 32 prohibits money for political purposes from being deducted from employee’s paychecks without their permission.
  • Prop 32 prohibits both corporate and union special interest contributions to politicians.

Opponents Say

  • 99% of California corporations don’t use payroll deductions for political contributions, so Prop 32 would only affect unions.
  • Business Super PACs and independent expenditure committees are exempt from Prop 32's controls.