Calif. Votes No on Fee Reform

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LOS ANGELES -It was close, but when the votes were counted in California, Proposition 37, the cable-industry-backed fee reform initiative, had lost.

Proposition 37, which was bankrolled by agriculture, manufacturers, distillers, tobacco companies and to a lesser degree, cable operators, sought to limit the power of cities to designate some charges as fees. Under state law, new taxes must be approved by a two-thirds vote of either the electorate or the state Legislature. But under the law, fees are a different animal and can be approved by a simple majority.

Proposition 37 would have made it more difficult for cities and regional authorities to create new revenue sources by calling them fees.

The measure would not have affected "old" charges passed through by cable operators, such as franchise and possessory interest fees. However, it could have curbed charges faced by operators expanding into new classes of business.

The proposition failed, with 47.8 percent of voters approving the measure and 52.2 percent voting no. The showing was surprising, considering supporters of the measure spent less than $1 million-a fraction of what was spent on other ballot initiatives.

Advertisements were predominantly mailers that mimicked party platform voting cards.

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