It's The Economy, Stupid

California’s non-partisan Legislative Analyst Office (LAO) is researching the economic impact of a November ballot initiative that would effectively overturn the state Supreme Court’s decision legalizing same-sex marriage. Some LGBT activists say that a favorable fiscal analysis could resonate with voters, particularly in an atmosphere of state budget crisis and a besieged national economy.

“This is something voters care especially about when we are in an economic downturn," says Shannon Minter, the lead attorney who argued the case on behalf of same-sex couples. Currently, California has a budget deficit of approximately $16 billion.

Results of the LAO's analysis are due to the Attorney General on July 4. A preliminary analysis the LAO conducted last November found no costs or benefits to the government from banning same-sex marriages because they were not recognized at the time. But the context has changed as a result of the May 15 ruling and same-sex weddings that began being performed on June 17.

Recent data from the Williams Institute on Sexual Orientation Law and Public Policy, a think tank at the UCLA School of Law, suggested that same-sex marriages would benefit California’s economy and the ballot measure to ban such unions would have a negative impact.

According to the study, in-state and out-of-state couples that choose to marry in California would contribute $683.6 million to the economy over the course of three years. Of this amount, about $55 million would go to state and local governments in the form of tax revenue, and governments would also receive about $9 million in license fees.

The LAO is still in the process of analyzing the Williams Institute data. “We will consider all pertinent information related to a ballot measure and come up with an independent analysis of the measure's fiscal effect on state and local governments,” says Jessica Bird, an LAO staff member.

It remains to be seen whether gay advocates can frame the ban as a pocketbook issue for voters, but opponents of same-sex marriage who support the measure appear to be avoiding economic rhetoric since the argument may not work in their favor.

“We’ve heard from parties on both sides,” says Bird at the Legislative Analyst Office. “I wouldn’t say that any group is saying the ballot initiative would be positive for the economy.”

In an e-mail exchange, Assembly member John Laird, a Santa Cruz Democrat who chairs the Budget Committee, noted that while “no one has done a complete analysis” at this point, “my view is that overturning the marriage decision would cut revenue to the state and local governments from marriage fees and hotel taxes.”

And to some extent, the numbers won’t be purely hypothetical by the time voters reach the polls in November since small businesses across the state will already be seeing an impact on their bottom line.

"I imagine that they'll feel the uptick throughout the summer,” says Sharon Sandow, CEO of the West Hollywood Chamber of Commerce, which represents 530 businesses including a broad scope of lawyers, bakeries and photographers that will likely be impacted by the wave of marriages. If the ban passed in November, she added, "It would be a huge reversal, but it would also be a huge tragedy. I think this is a huge opportunity for businesses and the community as a whole."

Results of the LAO's fiscal analysis will be distributed to the public by the Secretary of State in late July on its Web site, and at its Fresno, Los Angeles and San Francisco offices. A statewide notification via mailed voter guides will follow in late September. ?

Having received the 694,354 signatures required for certification, the ballot initiative to ban same-sex marriage requires the approval of a majority of the state’s voters to pass. The measure would amend the state constitution to define marriage only as a union between a man and a woman.

The Field Institute, which has been polling statewide attitudes on gay marriage for 30 years, published a study on May 28 showing 51% of Californians now support same-sex marriage compared to 42% who are opposed.