Negotiations to toughen theft and drug penalties collapse

Following an acrimonious collapse in talks between the Newsom administration and proponents of a ballot measure that would toughen penalties on retail theft and fentanyl use as part of changes to a 2014 law, state legislators are working on a possible competing initiative for the November ballot.

Gov. Gavin Newsom and Democratic leaders in the Legislature face a deadline for introducing a bill in time for the November election that they had not met as of press time Monday afternoon. The proposal marked an abrupt change of plans over the weekend after Democrats added provisions to a package of retail theft and other anti-crime bills that would make them inoperable if voters approved the initiative, backed by the California District Attorneys Association and large retailers, this fall.

Chris Micheli, a partner with Snodgrass & Micheli LLC who is not involved in the negotiations, said Democrats in the Legislature could approve a proposed constitutional amendment with a supermajority later this summer, although it is not clear if the leadership has the votes.

Assemblyman Kevin McCarty, D-Sacramento and the chair of the public safety committee, objected to the "poison pills" in the various retail theft bills. He could not be reached for comment about how he would vote on a competing initiative.

The law enforcement-backed initiative would roll back parts of Proposition 47, which reduced some theft and drug crimes from felonies and misdemeanors to address mass incarceration in state prisons. Many prosecutors, law enforcement officials and retailers have blamed the initiative for the rise in thefts since Prop. 47 passed in 2014.

The Homeless, Drug Addiction, Retail Theft Reduction Act would increase sentences for repeat retail theft offenders and increase charges for fentanyl dealers, among other provisions.

A Newsom spokesperson and other Democratic legislators could not be reached for comment as of press time.

Last-minute negotiations that allow proponents to pull initiatives from the ballot at the eleventh hour are possible. A deal was struck last week between Newsom, the California Labor Federation, and the state Chamber of Commerce on a compromise that kept an initiative that would have repealed the Private Attorney Generals Act, or PAGA, off the November ballot - assuming the bill passes by Thursday.

But negotiations on the Proposition 47 initiative have not gone as smoothly, in part because of a disagreement about the timing of any initiative. Greg Totten, CEO of the California District Attorneys Association, argued in a letter to Newsom's chief of staff, Dana Williamson, that an initiative or legislation to avoid it needed to happen this year.

Williamson wrote to Totten that "we are open to something in 2026 as well as providing all the necessary bells and whistles to make sure the deal is rock solid."

Totten, however, balked at any delay and complained that a June 12 proposal "does not address repeat theft, aggregation, excessive taking or smash-and-grab theft."

The email exchange, leaked to the media, ended with testy emails by Williamson, who told Totten on June 15 that he was "incapable of taking a win. ... This is why no one wants to work with you."

In a phone interview on Monday, Yolo County District Attorney Jeff Reisig - who is involved in the initiative campaign - said "we've never seen a single thing in writing" about any compromise legislation and said there has been no good faith effort to negotiate.

"It's just been really sneaky," he added. "It's clearly an attempt to undermine the initiative."

Democrats have raised substantive objections to passing the bills and then the law enforcement initiative as well, saying they would like to keep Prop. 47 and address specific crime problems in the legislation in a careful way. But the political winds may have shifted against Democrats since 2014, even in liberal cities, where concern about retail theft and fentanyl use has drawn a lot of public attention. The PAGA compromise, a deal with labor and the plaintiff's bar, occurred because business interests wanted some of the goals they achieved without the risk of a ballot initiative.

Reisig said he thought Democrats were more concerned with the keeping the initiative off the 2024 ballot, which features some close races that could affect control of Congress, and would be unable to pass urgency legislation if it comes to that.

"We don't think they have the votes," he said. "We're going to the ballot in November based on their absence of good faith negotiations."

With PAGA and a major anti-tax measure off the ballot due to a ruling last week by the state Supreme Court, business interests - including big retailers such as Walmart Inc. and Target Corp. that back the initiative - will have more money to spend on a fall campaign.

At the same time, opponents also will have more resources available that would have been devoted to fighting the anti-tax initiative.