The war over Prop 67

“Down with the phone tax,” declared Garry South, as his car inched along Interstate 5 en route to a Southern California radio appearance.

For a paid political consultant like South, who is widely credited with Gray Davis’ early successes, the cell phone is a professional lifeline, transforming 20 minutes of once-useless traffic-jam downtime into an opportunity to sing the praises of a current client—in this case, the telecommunications business itself.

“The proponents of Prop 67 thought the telecommunications industry would roll over and play dead and not care that another tax was being slapped on their customers,” said South of the initiative to fund emergency care through a 3-percent surcharge on phone use. That, he believes, will prove to be a “fatal misassumption.”

Yet, just as one man’s ceiling is another man’s floor, one coalition’s “phone tax” is another’s “emergency medical care initiative.” What South portrays as corporations safeguarding the interests of their client base, his pro-Proposition 67 counterpart—Peter Warren of the California Medical Association (CMA)—sees as an attempt to “obliterate” a solution to the state’s growing emergency-care crisis.

The Coalition to Preserve Emergency Care—which includes health-care organizations, doctors, firefighters and health clinics—promotes Proposition 67 as a way to put an end to “ambulance diversion,” the disturbingly widespread phenomenon in which ambulances are forced to drive patients past nearby emergency rooms that are operating beyond capacity. Warren cites statistics indicating that during the first six months of 2004, UC Davis Medical Center was “on diversion” for 2,649 of 8,000 emergencies.

“What that means is that the ambulance calls up and says, ‘Can we go to UC Davis?’ and more than 30 percent of the time, UC Davis is turning away ambulances,” said Warren, noting that this was during a relatively emergency-free period. “This was not during flu season. This wasn’t in the middle of an earthquake. This wasn’t, God forbid, [responding to] the kind of terrorism that we’re running our entire 2004 election campaign around.”

The “No on 67” group, meanwhile, bills itself as “a coalition of seniors, taxpayers, consumers, small businesses and telecommunications providers.” But the list of top contributors posted at the California Secretary of State’s Web site indicates that it’s the tail end of this coalition—telecommunications providers—that’s wagging this particular dog. About a dozen donors have generated more than $6 million so far. A fifth of that comes from California’s own SBC, while the remainder includes out-of-state contributors ranging from the relatively frugal AT&T Wireless out of Texas ($20,000) through the Washington-based T-Mobile USA ($127,500) and on up to the Georgia-based Cingular Wireless ($1 million).

By comparison, Proposition 67 advocates have more than a hundred donors, but only about half the money. A few large health organizations write hefty checks, but the vast majority of contributions come from clinics around the state.

“There isn’t a penny contributed to fund the opposition from anybody who isn’t a telecommunications giant or a direct affiliate of theirs,” said Warren, noting that the overwhelming majority are based out of state. “They want to kill Prop 67 in its cradle so that it doesn’t come to Ohio next.”

And who better to handle the task than South? After all, it was South who came up with “Gray Davis: Experience Money Can’t Buy,” the campaign theme that helped Davis win re-election. (Like most good memes, that slogan gradually acquired layers of irony—first during recall depictions of Davis as a pay-to-play puppet for campaign contributors and more recently by his successor’s enthusiastic use of the same fund-raising tactics.)

The campaign to stop Proposition 67 is slick and imaginative: “If you liked the car tax, you’ll love the cell phone tax,” proclaims one print ad, ironically borrowing the very rhetoric (“Politicians in Sacramento just don’t get it …”) that drove out South’s old boss. Another depicts a cell-phone-wielding woman who has a look of horrified indignation, as though Willie Horton himself were on the line. There’s even a bizarre broadside called “One More in a Long History of Outrageous Taxes” that equates the measure with racist Southern poll taxes, colonial tea taxes and an ancient Roman urine tax.

Driving down Interstate 5, South used darkly humorous analogies to mock a health-care tax on what he sees as an altogether unrelated behavior—using the phone. “Would you tax somebody’s utility bills, you know, to pay for breast augmentation? Or tax somebody’s water use to pay for—uh, you know—coloring books for kids in daycare? Why are we trying to assist the emergency-care system in this state by imposing a tax on a totally unrelated activity?”

Proponents counter that taxing telephone use is both logical—because emergency services are accessed by dialing 911—and fair. The proposition would raise money from a broad base of people at the 3-percent rate, with a cap of 50 cents per month for land lines. Cell phones and business phones would not have the cap, but still would not exceed 3 percent. Low-income-phone-service customers would pay nothing.

Proposition 67 would raise an estimated $540 million a year, roughly equal to what California emergency-care services currently are losing. A major reason hospitals are losing money on emergency care is the rising percentage of uninsured Californians, for many of whom emergency rooms can be the only medical facilities available.

“It’s a 24-hour-a-day business that’s open to all comers,” said Warren. “You can’t ask them if they can pay before you provide the service. Nobody else can operate that way and survive.”

Measures like Proposition 67 and Proposition 72—the measure that would require larger companies to provide employee health insurance—are attempts at resolving health-care problems that California has yet to address. “We saw this beginning five or six years ago, and for us, it was a moral and ethical obligation to say to people that this system is failing,” said Warren. “People are dying because there isn’t the care available that could save their lives. People are ending up in wheelchairs or long-term nursing homes because they couldn’t get the care fast enough.”

The problem, as is often the case in politics, is that it’s easier to attack potential solutions than to attack the problems themselves. Warren believes his opponents are doing what “any grizzly bear would do if you tried to take a piece off its carcass,” but he hopes the public will see things his way. As cause for optimism, he cites an emergency-care measure in which Los Angeles County voters approved a property-tax increase for the first time since Proposition 13. But they didn’t have to deal with those phone-company ads. “In California,” he said, “it’s a lot easier to get a ‘no’ when anything is questionable.”