Welcome to the Wednesday, September 13, Brew.
Here’s what’s in store for you as you start your day:
- California veto referendums will look different next year
- A final look at tomorrow’s mayoral runoff in Nashville
- Decline in Vanguard, BlackRock support for ESG shareholder proposals
California’s veto referendums will look different next year
On Sept. 8, California Gov. Gavin Newsom (D) signed AB 421 into law, changing how the state’s veto referendums will appear on future ballots.
AB 421 passed through both chambers along party lines, with all present Democrats voting in favor and all Republicans voting against the bill.
A veto referendum is a citizen-initiated ballot measure that asks voters whether to uphold or repeal a state law. California is one of 23 states with such a process.
Before AB 412, when a veto referendum appeared on the ballot, voters could select” Yes” or “No.” A “Yes” vote was in favor of upholding the bill, and a “No” vote was in favor of repealing it.
Moving forward, AB 421 replaces “Yes” and “No” with “Keep the law” and “Overturn the law,” respectively.
Twenty-one of the 23 states with veto referendums use “Yes” and “No” or “For” and “Against” for veto referendum ballot language. But what those terms actually mean can vary.
In 18 states, the affirmative “Yes” vote means “I want this law to go into effect.” But in Alaska, Maine, and Wyoming, “Yes” means “I want to repeal this law.”
California joins Nebraska as the only other state that does not use the “Yes” or “No” format. In Nebraska, veto referendum ballot language includes “Retain” or “Repeal.”
AB 421 also changes veto referenda ballot titles to be formatted as a question rather than a statement. The state will now format every ballot title as follows: “Should California keep or overturn a law passed in [year the law was enacted] [no more than 15 words describing the general subject or scope of the law]?”
Beyond the ballot, AB 421 requires that the state’s official voter guide identify the top three funders of the effort to repeal the law.
There are currently two veto referendums set for California’s 2024 ballot: AB 1137 and AB 257, though that list may shrink.
AB 1137 would prohibit new oil and gas wells within 3,200 feet of homes, schools, nursing homes, and hospitals. Sentinel Peak Resources CA LLC, Signal Hill Petroleum, Inc., and E&B Natural Resources are the top three donors to the repeal effort.
AB 257 would establish a fast-food council to regulate wages and working conditions. Chipotle, In-N-Out Burger, and Starbucks were the top three donors seeking the law’s repeal. But, on Sept. 11, the campaign behind the referendum announced it had reached a compromise with legislators and would withdraw this referendum by Jan. 1, 2024.
California adopted the veto referendum process in 1911. Since then, voters have decided 50 veto referendums, upholding 21 (42%) and repealing 29 (58%).
AB 421 is the 35th bill approved this year that addresses ballot measures and recalls. Use the link below to learn more about those changes.
A final look at tomorrow’s mayoral runoff in Nashville
Nashville voters will elect a new mayor tomorrow, Sept. 14. Yes, that’s a Thursday.
Freddie O’Connell and Alice Rolli advanced to the runoff from a 12-candidate field following the city’s Aug. 3 general election.
O’Connell finished first in the general election with 27% of the vote to Rolli’s 20%.
While Nashville’s municipal elections are officially nonpartisan, O’Connell, who represented District 19 on the Nashville Metro Council, is a Democrat. Rolli, a former staffer for Govs. Bill Haslam (R) and Lamar Alexander (R), is a Republican.
Axios Nashville’s Nate Rau wrote that O’Connell “sold voters on a progressive vision of the city and highlighted his vote against the $2.1 billion Titans stadium deal as proof of his commitment to controlling development growth.”
O’Connell completed Ballotpedia’s Candidate Connection survey, writing, “I’m running for mayor to make it easier for people to stay in Nashville by tackling the cost of living and quality of life.” You can view O’Connell’s full survey responses here.
Rau wrote that Rolli “campaigned on addressing crime, keeping taxes low and pressing Metro Nashville Public Schools for improvement. She sold voters on her conservative bona fides by touting her resume.”
Rolli told The Tennessean she “is running … to usher in a new era of regional cooperation to address our challenges of growth” and that she “has pledged to not raise taxes on Nashville residents and to get our fiscal house in order.”
The runoff winner will hold the unique distinction of being Nashville’s fourth mayor in five years.
In 2018, former Mayor Megan Barry (D) resigned after pleading guilty to a felony theft charge stemming from an extramarital affair while in office. Vice Mayor David Briley (D) assumed office and won a special election to serve the remainder of Barry’s term. Briley ran for re-election in 2019, losing to incumbent Mayor John Cooper (D), who is not seeking re-election this year.
Democrats currently hold 64 mayoral offices in the country’s 100 most populous cities, Republicans hold 24, independents or nonpartisan mayors hold six, and two mayors’ affiliations are unknown.
In addition to Nashville, 28 other large cities are holding or have held mayoral elections this year.
Decline in Vanguard, BlackRock support for ESG shareholder proposals
On Aug. 29, Vanguard—the world’s second-largest asset manager and the largest passive asset manager—reported it approved 2% of the environmental, social, and corporate governance (ESG) resolutions shareholders proposed in the 2023 proxy voting season.
This represented a decrease from 2022 when the company supported 12% of ESG shareholder proposals.
Vanguard’s report followed a similar announcement in late July from BlackRock—the world’s largest asset manager—saying it supported 22% of ESG shareholder proposals in 2023, down from 47% in 2022.
Both reports come at a time when Republican state and federal officials who oppose ESG investing—particularly in the management of public funds—have begun to open investigations and make official requests of asset managers.
On July 6, U.S. Reps. Jim Jordan (R-Ohio), Thomas Massie (R-Ky.), and Dan Bishop (R-N.C.) sent letters to Vanguard, BlackRock, and State Street requesting information about their efforts to combat climate change through ESG investing. Jordan said such efforts might violate antitrust laws.
And on May 10, a group of Republican state attorneys general filed a motion with the Federal Energy Regulatory Commission (FERC) to prevent BlackRock from using equity stakes to require utility companies to adopt ESG policies. In the motion, the attorneys general asked the FERC to limit BlackRock’s ownership in utility companies to $10 million in voting stakes.
ESG refers to an investment or corporate governance approach that involves considering the extent to which corporations meet certain standards related to environmental, social, and corporate governance issues, like carbon emission or board diversity goals.
In the context of public policy, ESG refers to using such criteria when regulating and managing public funds, including pensions.
To learn more about ESG, click here. For more information on areas of disagreement and inquiry related to ESG, click here. And for more information on state responses to ESG investing, click here.
You can also use the link below to subscribe to Ballotpedia’s Economy and Society newsletter, which covers developments in the world of ESG and hits inboxes every Tuesday.
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