BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
COVER STORY

Status Quo Plus on Ballot Initiatives
Voters went for small changes

If ballot initiatives are the true voice of the people, then this year the voice came through loud and clear: Don't rock the boat. Rather than clamoring for change, voters approved measures that tweaked the status quo.

They had their chance to stir things up with education, but across the nation, voters demurred. True, four states approved increases in school funding, including teacher pay raises. But folks in Michigan and California gave a big thumbs-down to vouchers that could be used to help fund private education.

In Michigan, the proposition was limited to vouchers for kids in the worst-performing districts. Voucher proponents around the country had high hopes for the measure. But despite the backing of the DeVos family--founders of Amway Corp.--and encouragement from Senator John McCain (R-Ariz.), the measure was trounced by a more than two-to-one margin. Also defeated was California's Proposition 38, which would have granted every pupil a $4,000 credit for use in private schools. ''I went to public school, and I didn't turn out so bad,'' explained Todd Piro, a student at the University of California at Los Angeles, after casting his anti-voucher, pro-funding votes. The political upshot: For the near term, at least, these vetoes put the voucher movement on life-support.

Warm and fuzzy feelings for public schools, though, were no indication of a broader liberal victory. True, this year's crop of initiatives was top-heavy with anti-business and pro-environmental measures. But most fell shy of the mark. The big kahuna was a health care effort in Massachusetts. It would have mandated universal health coverage by 2002 while imposing stringent new requirements on managed-care companies. Advocates hoped the state would set a mold for health-care reform nationwide, but health-maintenance organizations teamed up with other Massachusetts businesses to paint the measure as extremist. ''This would seriously drive up the cost of health insurance,'' says Karen M. Ignagni, president of the American Association of Health Plans. Backed by an estimated $5 million ad blitz, the industry pulled off a narrow victory after trailing by double-digits in pre-election polls.

ANTI-SPRAWL. Topping enviros' wish list was a plan to limit clear-cutting in Maine's forests. Even though a tougher measure failed four years ago, backers returned this year with slightly looser provisions. They lost by a wide margin. In Colorado and Arizona, anti-sprawl activists tried to limit growth in the suburbs of Denver and Phoenix by strengthening land-use planning. But voters resoundingly chose gridlock over further restrictions on development.

The one big victory for the green crowd was approval in Florida of a multibillion-dollar high-speed passenger rail system that would link the state's five biggest metropolitan areas. Eclipsed by the state's notoriety in other races, it sailed to an easy, if unheralded, victory. ''It really wasn't a hard sell,'' considering the state's growing congestion, shrugs John G. Sowinski, a consultant to the group that backed the measure.

Perhaps most notable was what was not on the ballot this year. There were none on such incendiary issues as affirmative action or illegal immigration. Tax-rollback efforts, ballot perennials, were few and far between. Only Massachusetts passed a sizable cut--from 5.9% to 5% in the state's income tax.

So what next for these ballot measures? Expect many of the issues to keep cropping up. Organizers in Washington and California are trying to get universal health care on the ballot in those states. And education groups are likely to come back with more funding requests. The worst that can happen is that the people will say no.

By Dan Carney in Washington, with Arlene Weintraub in Los Angeles, William C. Symonds in Boston, and bureau reports

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