A proposed November statewide ballot measure could allow three of the nation's biggest paint companies to hand California taxpayers a bill for the cost of cleaning up health hazards caused by lead paint.
The measure would place a $2-billion bond on the November ballot to fund the remediation of lead paint, mold, asbestos and other environmental dangers in homes, schools and senior citizen facilities. The initiative also would reverse a November state appeals court decision requiring three paint companies — ConAgra, NL Industries and Sherwin-Williams — to shell out hundreds of millions of dollars for lead paint abatement. It also aims to block future lawsuits against the paint companies for similar claims.
Initiative proponents contend that the bond measure, which they're calling the Healthy Homes and Schools Act, allows for a more wide-ranging solution to lead paint problems than a potential legal judgment. The bond would finance the cleanup of other environmental threats in addition to lead paint and would apply across the state instead of only in jurisdictions that filed suit against the companies.
"The Healthy Homes and Schools Act is a holistic and comprehensive approach to cleaning up existing homes in California by creating a statewide solution to address a variety of hazards in homes, such as mold, lead, asbestos, pests and other threats," said a statement from Tiffany Moffatt, a spokeswoman for the bond campaign. "Essentially, the initiative provides rehabilitation for old housing — providing a broader public benefit for all Californians versus cherry-picking winners and losers."
Last week, ConAgra, NL Industries and Sherwin-Williams donated a combined $6 million to a campaign supporting the bond measure, indicating the companies were gearing up for a signature-gathering effort to qualify the initiative. That amount would likely be more than enough for supporters to collect the 365,880 valid voter signatures needed to secure a place on the fall ballot.
The bond proposal has angered those who have fought the companies in court for the last 18 years. The three companies, not the general public, should pay to clean up affected homes, said Greta Hansen, chief assistant county counsel in Santa Clara County.
"It's unfortunate that they're seeking to shift the burden for their unlawful activities to the taxpayers of the state of California," Hansen said.
The dispute over who's responsible for cleaning up lead paint dates back to a lawsuit filed in 2000 by Santa Clara and Los Angeles counties and eight other local governments across the state. The cities and counties argued that lead paint was a public nuisance and that the paint companies promoted its use even after they knew the material could cause negative health effects, especially in children. Lead paint became illegal to use in homes in 1978.
The November appeals court decision largely upheld a lower-court ruling requiring ConAgra, NL Industries and Sherwin-Williams to set up a fund for discovering and cleaning up lead paint problems in the communities that filed the lawsuit. The three companies have since asked the California Supreme Court to review the case. Shortly after the November court decision, the proposed $2-billion bond was filed with the state attorney general.
The bond measure includes language declaring that lead paint is not a public nuisance, a declaration that would apply to active court cases, including the suit filed by Santa Clara County and the other cities and counties.
"It seems to me that this is designed to erase liability in that case and also potential liability in any future cases for them, and substitute taxpayer-funded bond measures to do the remediation that these companies would otherwise be responsible for," said Sean Hecht, a UCLA School of Law professor who has followed the litigation.
The state's nonpartisan Legislative Analyst's Office came to a similar conclusion in its analysis of the bond, saying the initiative could reverse the existing court decision, cause the loss of several hundred million dollars in company-funded lead paint remediation and prohibit other local governments from filing similar lawsuits in the future. The analysts estimated the bond would cost the state's day-to-day operating budget roughly $110 million annually for the next 35 years to repay with interest.
The proposed ballot measure has also upset affordable housing activists. Last year, state lawmakers agreed to put a $4-billion bond on this November's ballot to fund low-income housing development and provide home loans for veterans. A second housing-related bond on the statewide ballot could complicate its passage, activists say.
"This appears to be a cynical, brazen attempt by a few select corporations to get themselves off the hook at taxpayers' expense, and we remain focused on the Veterans and Affordable Housing Bond that will actually bring safe, affordable homes to California families, seniors and veterans," said Ray Pearl, executive director of the California Housing Consortium, in a statement.
Private industries benefiting from the public initiative process is not uncommon in California politics. In 2008, billionaire Texas oilman T. Boone Pickens pitched a failed initiative that would have provided billions in state subsidies for consumers to purchase natural gas vehicles fueled by companies Pickens owned.
But Thad Kousser, a political science professor at UC San Diego, said he couldn't recall any companies sponsoring an initiative that would get them out of paying a legal judgment.
"There's nothing that comes to mind that says, 'Government stuck us with the tab for something, and we're going to make someone else pay for it instead,' " Kousser said. "That's the gutsiest element of this initiative."
The paint industry has been a major player in statehouses across the country. In 2011 and 2012, Harold Simmons, then owner of NL Industries, donated a total of $750,000 to a political organization supporting Wisconsin Gov. Scott Walker and state GOP lawmakers, according to leaked court documents published by the Guardian. Soon after the donations and amid intense lobbying from paint manufacturers, Wisconsin passed legislation to shield the companies from liability in lead paint lawsuits.
3:20 p.m.: This article was updated to add context about paint manufacturers' political spending and the history of state ballot measures.