Opponents Call Gann ‘Front’ for Irvine Co. : Supporters of Rival Measure Attack Initiative That Would Limit New State Spending to Roads

Proponents of an initiative to ease the state’s constitutional spending limit blasted tax crusader Paul Gann and the Irvine Co. on Monday for backing a rival ballot measure that would allow more spending on roads but leave the limit in place for other government programs.

Spokesmen for several groups representing mainly educators and social workers said at a press conference in the Capitol that Gann was abandoning his Populist roots to do the bidding of the powerful Irvine Co., an Orange County developer that is a major player on the statewide political scene.

The attack prompted a sharp denial from Gann and a spokesman for the Irvine Co., both of whom asserted that the measure has broad-based support that goes far beyond the development community.

June, 1988, Ballot

Both sides are trying to qualify their initiatives for the June, 1988, ballot in a bid to alter the Proposition 4 spending limit, which was written by Gann and put in place by the voters in 1979. The limit, which is adjusted each year for changes in population and inflation, is responsible for the $1.1-billion tax rebate Californians will be receiving this year.

The initiative sponsored by the educators would raise the limit by accounting for economic growth and school enrollments. The Legislature would be free to allocate revenues to whatever programs it deemed appropriate.

That measure, which is backed by state schools Supt. Bill Honig, among others, would also allow the government to spend any revenues already collected, apparently eliminating any chance of another tax refund next year.

The initiative sponsored by Gann exempts any revenue raised from sales taxes on gasoline from the limit, while allowing that money to be spent only on transportation projects. That measure also requires the state to maintain a reserve equal to 3% of the state budget and exempts that reserve from the spending limit.

10% for County

Official estimates are projecting that the initiative would free up more than $600 million a year for transportation, about 10% of which would come to Orange County.

“The Paul Gann-Irvine Co. initiative is one which is just oriented toward one special interest--transportation only,” said Lenny Goldberg, executive director of the California Tax Reform Assn. “With the launching of this new initiative, Paul Gann has fallen into the pockets of the special interests. He has become a front man for the Irvine Co. and the highway lobby.”

Steve Barrow, a lobbyist for Common Cause in Sacramento, said the Irvine Co.’s motives “are clear.”

‘Rip-off’

“They want more money for the development activities,” Barrow said. “Whether that is done through legislation or an initiative, this proposal is a rip-off of the general fund.”

Bob Wells, a lobbyist for the Assn. of California School Administrators, added that his group believes that “transportation is not the only program in the budget that is having trouble right now.”

Goldberg and the others said they suspect the Irvine Co. to be the initiative’s major financial backer, although campaign spending reports for the effort are not yet required and proponents of the measure would not disclose the level of the Irvine Co.’s commitment.

Gann reacted angrily to the allegation that he is a “front” for the Irvine Co. or any other interest. “Nobody owns me,” he said. “Nobody controls me.”

Called Best Approach

Gann said he believes his initiative is the best approach because Californians want more money to fix their aging roads and build new ones. He said it makes sense to consider the sales tax on gasoline to be a “user fee” exempt from the spending limit. The rival initiative, he said, goes too far.

“Californians want the government to have a budget, not a blank check,” Gann said.

Neither Gann nor Joel Fox, president of the California Tax Reduction Movement and a co-sponsor of the measure, would reveal the extent of the Irvine Co.’s support of their movement. Fox said the effort so far has attracted small contributions from more than 23,000 donors.

“We’ve got some big contributions from corporations, and we’d like to have more, because these things are expensive,” Fox said. “But the Irvine Co.’s contribution alone would not make or break this campaign at all.”

Larry Thomas, the Irvine Co.’s vice president for corporate communications, said the idea that Gann was acting as a “front” for his company was “pure fabrication.”

Thomas added that the company is not alone in supporting more money for roads in Orange County: “I don’t think you can find anybody in Orange County who is not in favor of doing everything you can to improve the flow of traffic. It’s not a special-interest initiative for us.”