Millions spent on California politics, but it’s just chicken feed

After last November’s elections were over, the combatants filed year-end reports on what they spent for and against legislative candidates and ballot measures and it was close to $700 million – nearly two-thirds more than spending during the previous election cycle.

That’s very big money to anyone not named Gates, Buffett, Ellison – or maybe Trump.

But it doesn’t count another $600 million-plus spent during the two-year election cycle by various interest groups on lobbying the Legislature and state regulatory agencies. Nor does it include millions spent on other aspects of influencing politics that don’t show up in state filings.

It’s fair to conclude that state-level spending on politics of all kinds approached $1.5 billion during that two-year period. Big money? Yes. But in another context, chicken feed.

California has the fifth- or sixth-largest economy in the world, depending on how some of the more erratic European economies are performing at the moment. The state’s output of goods and services is roughly $2.5 trillion a year.

No small share of that economy is affected by the decisions of state politicians and those they appoint to various boards and commissions. The state budget alone, including more than $100 billion in federal funds, is close to $250 billion.

Californians spend another $300 billion-plus per year on insurance premiums, mostly regulated by the state Department of Insurance and its elected commissioner, or other state agencies.

Add at least $100 billion a year for electricity, natural gas, water, telephone and TV service, much of it decreed by the state Public Utilities Commission.

Just those obvious examples add up to $1.3 trillion over the two-year cycle covered by the political spending. And there are countless billions that can’t be easily quantified, even though they exist. Changing one word in a legislative bill can sometimes mean millions of dollars gained or lost by some interested party.

Therefore, the $1.5 billion spent on political action during the last two years was one-thousandth of the estimated $1.5 trillion at stake in the decisions that elected and appointed state officials would make.

It could be likened to putting a dollar in a casino slot machine in hopes of winning $1,000 – an investment with a potentially enormous payoff.

That explains why thousands of interest groups hire hundreds of lobbyists to monitor legislation and administrative decisions – such as the 600 sets of regulations state agencies issue every year – and attempt to influence those decisions and regulations.

It also explains why so much money is shoveled into campaigns for the Legislature and other state offices and into those for and against ballot measures.

The pharmaceutical industry alone spent over $100 million to defeat a ballot measure dealing with drug prices, clearly persuaded that were it to pass in California it could spread to other states with multibillion-dollar consequences. Like other forms of political spending, that’s chicken feed.

This story was originally published February 14, 2017 at 2:27 PM with the headline "Millions spent on California politics, but it’s just chicken feed."