By Michael D. Belote, Esq.
CMA Legislative Advocate

Musical Chairs

Term limits. Popular with the public, with lobbyists not so much. While the prior system, where legislators might stay in office for decades, clearly led to stagnation and stultification, term limits have downsides as well. The biggest is the necessity of constantly bringing new legislators up to speed on complex issues and having to make personal connections with substantial numbers of new members every session.

CMA is a perfect example of this challenge. While most legislators, but certainly not all, have purchased residential properties secured by deeds of trust, almost none have any experience with the private money segment occupied by CMA members. The name “California Mortgage Association” gives just a hint of the sophistication and expertise of CMA members in our specialized form of real estate finance. And we have a great story to tell about this essential part of real estate lending!

When the dust cleared on the November 2022 general elections, 36 brand new members were elected to the California legislature, out of 120 total seats. This November the number of new members is expected to total approximately 40. This means that in one two-year period, over 60% of the combined Assembly and Senate will be either brand-new or nearly new. Imagine being elected
to office and suddenly being expected to understand complex policy details on literally thousands of issues facing California.

As the title of this column indicates, elections in a term-limited legislature is a little like musical chairs. When a Congressional seat opens up, like the ones presently occupied by Adam Schiff, Katie Porter, Jackie Speier, or Anna Eshoo, state legislators immediately assess their chances. Congressional seats are sort of a holy grail because they come with higher pay, a pension plan, and no term
limits. When state senators file to run for Congressional seats, Assembly members try to move up to the “upper house” in Sacramento. When state legislative seats come open, local elected officials often file for the Assembly or state Senate.
And when a state legislator has no time left under term limits, they often will run for down-ticket state-wide offices like Lieutenant Governor, Controller, or Treasurer, or for local county boards of supervisors. It is dizzying trying to keep track of who is running for what, and it sometimes feels like everyone is running for something!

This pace of change is why it is so critical that CMA exists, because literally no other organization in Sacramento speaks for those in the private money industry. In turn, that makes the CMA-PAC incredibly important, because individuals running for office, or for reelection, need resources to get their messages to voters. The legislative process in Sacramento is far cleaner than some members of the public believe, but it still costs money to run for office, especially in a state where an Assembly member represents approximately 500,000 constituents, and a state senator approximately one million!

2024 will be a critical year in Sacramento, with a new Speaker of the Assembly (Robert Rivas of Hollister), new President pro Tem of the Senate (Mike McGuire of Sonoma County), new chairman of the Assembly Judiciary Committee (Ask Kalra of San Jose), new Commissioner of the Department of Real Estate (Chika Sundquist, well-known and hugely respected by CMA members), and much more.

February 16 is the deadline for introduction of new bills for 2024, and it is expected that some 2500 new proposals will be introduced. Dozens will be of interest to CMA members, on such diverse subjects as licensing, taxation, liability, housing, homeowner’s insurance, and more. Expect to hear much more about these bills soon.

Finally, the November 2024 ballot will present hugely important questions relating to local taxation, including proposals fundamentally altering Proposition 13. Future columns will describe the three taxation measures presently headed for the
ballot in November, which are certain to “tax” the ability of voters to sort through.

Thank you SO much for your support of CMA.