Voters Reject Corporate-Backed Ballot Measures

Published on

Voters rejected two business-backed measures that would have changed
the electric power and auto insurance industries in California.

With all precincts statewide reporting, PG&E-backed Proposition
16 was failing with 52.5 percent no votes. No votes on Proposition 17,
sponsored by Mercury Insurance, accounted for 52.1 percent of the

Proponents of the measures were still holding out hope, with
thousands of absentee ballots yet to be counted.

Shannan Velayas, a spokeswoman with the secretary of state’s office,
said the number of absentee ballots varies from county to county, so the
state does not now know how many are out there. She said it’s in the
“tens of thousands.” Counties have until July 9 to report final
absentee totals.

Opponents of Propositions 16 and 17 said they were confident, given
the numbers. Out of about 3.85 million votes cast, Proposition 16
trailed today by about 185,000 votes. Proposition 17 was failing by
about 156,000 votes.

Proposition 16 – formally known as the Taxpayers Right to Vote Act –
was put on the California ballot as a constitutional amendment requiring
a two-thirds vote before a public utility could extend service to new
customers or new territories.

From the beginning, it was spearheaded virtually single-handedly by
San Francisco-based PG&E, which spent more than $45 million to
persuade voters to approve it.

Proposition 17 was put on the ballot by Mercury Insurance. It would
have overturned state law prohibiting insurance companies from
considering a driver’s insurance history to set rates, plus allow
“loyalty discounts” to customers even if they switched insurance

Mercury poured nearly $16 million into the effort, according to

The company wasn’t immediately available for comment. But Mike
D’Arelli, executive director with an insurance lobbying group that
supported Proposition 17, called the results disappointing.

“Voters missed an opportunity to extend an auto insurance discount
that could have lowered auto insurance rates for millions of drivers,”
said D’Arelli, executive director of the Alliance of Insurance Agents
& Brokers.

Harvey Rosenfield, the noted consumer advocate who led the fight
against the proposition, was scheduled to make a statement later.

Existing law lets insurers offer loyalty (or “persistency”) discounts
to long-term customers. Mercury has been fighting for years for the
right to extend the discounts to other insurers’ long-term customers in
an effort to lure them away. Rosenfield says that because of the “zero
sum” regulations governing insurance premiums in California, companies
that give discounts to one group have to raise premiums on others. He
said newly insured motorists, or those who’d let their insurance expire
temporarily, would pay big surcharges as a result.

Proposition 17 proponents said they would continue to pursue a
complaint with the Fair Political Practices Commission over the
financing of the opposition to the initiative.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases