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The High Price of Fighting Amazon

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The High Price of Fighting Amazon

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Amazon.com worker Jennifer Bladow moves pre-packaged copies of the Harry Potter and the Half Blood Prince, by author J. K. Rowling on a conveyor belt at the Amazon.com shipping facility.

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Amazon, the online retailer, has already dedicated more than $5 million to reverse, via referendum, legislation that requires it and other online retailers to collect sales tax on the items it sells in California.

But it's not clear if the referendum will have any meaning -- if legislative Democrats and brick-and-mortar retailers get their way.

As an end run to blunt the referendum, the state senate is moving forward a new bill to establish the tax.

This bill would be diffierent because it would have to be passed by a two-thirds vote as an "urgency" measure. In California,  a bill passed by a two-thirds vote is not subject to referendum.

This is an aggressive political manuever -- at a time when Democrats in the legislature are making a number of aggressive manuevers to consolidate power.

Such aggression makes some sense, particularly since the state needs every dollar it can get in these budget times. (A brief political note: has any company mismanaged its political and governmental affairs work in California as much as Amazon?)

But there is a cost to this manuever.The end run weakens the best part of California's dysfunctional system of direct democracy.

Here's the short version. California has the worst of both worlds in direct democracy -- we have a very strong initiative (that is, the power to initiative legislation or constitutional amendments by going directly to voters) and a very weak referendum power (the power to reverse an act of the legislature by the vote of the people).

This is unhelpful because initiatives in California make it very hard to govern, permitting powerful interests to circumvent the budget and checks and balances to get what they want.

The referendum, by contrast, is a much better tool if you want a healthy democracy; it gives the people the power to block major legislative manuevers, but not circumvent them. Ideally, California would have many more referendums than it has, but fewer initiatives.

This Amazon manuever, however, takes us in the wrong direction by further weakening the referendum.

Lawmakers don't have to respect the referendum, but they should -- since a referendum is an opportunity for them to communicate with the public, explain what they are doing, and improve the public trust in them.

A referendum on the Amazon measure is a great opportunity because the legislature has a strong case. Why should on-line retailers from out of state get an advantage that people who invest in California don't have?

The fact that Democrats are manuevering around the referendum makes the case for changing the referendum law so that even legislation passed by two-thirds is subject to referendum.

This is true in several other states, including our neighbor to the north, Oregon.

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