Walmart is the biggest funder of California’s Proposition 36, which would reclassify certain misdemeanor theft and drug crimes as felonies. The megachain pumped $2.5 million into the early efforts to qualify the measure for the November ballot, and it recently donated $1 million more.
California voters, who have been inundated with news stories and social media videos of people running out of stores or shopping malls with stolen goods, overwhelmingly support Prop. 36, according to recent public polling. It would follow that Walmart also considers retail theft a major problem.
But it doesn’t — at least, not by its own words. Walmart’s most recent annual report to the federal Securities and Exchange Commission and investors, a document of nearly 100 pages, lists 22 different potential risks to the company, including strategic, operational, financial and legal ones. Nowhere is retail theft mentioned.
This is the disconnect around Prop. 36. Though the measure is widely touted as a strong stand against organized retail theft, including stiffer penalties for repeat offenders, much of its appeal is rooted in imagery that doesn’t square with recent crime statistics. Some of the initiative’s original supporters and funders have quietly backed away from it, including major store chains and the powerful California Retailers Association.
Kelsey Bohl, Walmart’s director of corporate communication, did not address specific questions from Capital & Main, including why the company backs the measure but doesn’t list retail theft among its perceived store risks. In an email, Bohl said Walmart still supports Prop. 36, which she called “a balanced approach that will provide local communities with the effective tools they need to help enforce the law and improve safety for all.”
In addition to targeting retail theft, Prop. 36 also would turn some drug crimes into “treatment-mandated” felonies and others into ones mandating extended jail or prison terms — yet it contains no funding mechanism to address the resulting flood of new inmates. The nonpartisan Legislative Analyst’s Office thus concluded Prop. 36 will raise state criminal justice costs by tens of millions to “the low hundreds of millions” of dollars annually.
“Prop. 36 is nothing more than an effort to take us back to the ‘war on drugs,’ locking people in prison for drug possession and eliminating money for treatment,” said Anthony York, a spokesperson for the No on 36 campaign. “The more voters learn about what is really in Prop. 36, the less they like it.”
The polling numbers say otherwise. And that is due, at least in part, to the fact that there’s virtually no context around the reforms the proposition claims to address.
Media coverage of California retail store crimes, some of those instances perpetrated by organized groups of thieves, drove much of the narrative that resulted in Prop. 36’s drafting by a group led by district attorneys. And without doubt, the state’s property crime rate per 100,000 residents ticked up in both 2021 and 2022, according to data analysis by the California Budget & Policy Center.
But by last year, the property crime rate was once again dropping, the center’s research found. And in all those years, even including widely publicized retail theft sprees in places like Los Angeles and San Francisco, the state rates remained at nearly 50-year lows.
In 2022, despite an uptick in California, its property crime rate was below that of Nevada, Hawaii, Arkansas, Louisiana, Oregon, New Mexico, Colorado, Washington and the District of Columbia.
But the narrative of runaway crime continued, boosted by the National Retail Federation, which at one point released the startling information that nearly 50% of the estimated $94.5 billion of missing merchandise for U.S. retailers in 2021 was the result of organized theft. It was the sort of galvanizing statistic that cried out for immediate and furious pushback.
It was also false. As the National Retail Federation admitted in a follow-up report last year, the figure was actually closer to 5%, a discrepancy blamed on faulty data.
The drug chain Walgreens at one point blamed runaway retail crime as the reason for closing five stores in San Francisco. But as the Los Angeles Times noted, the chain later acknowledged another false narrative, saying the stores were actually closed for other reasons and that the decisions were made long before the uptick in retail crime in California.
Nevertheless, Prop. 36 was touted as an antidote to runaway property crime. It functionally would roll back some of the provisions of Proposition 47, a measure that passed by a wide margin in 2014. That initiative significantly reduced prison overcrowding by reclassifying some theft and drug crimes as misdemeanors, and redirected the money saved on those incarceration costs, some $800 million so far, to mental health and drug abuse treatment programs.
Jail or prison terms do not prevent reoffending and may actually increase it, a 2021 meta-analysis of 116 studies found. But that’s precisely what Prop. 36 will do: direct more people, disproportionately Black and brown, into custody.
Major retailers initially rallied to get Prop. 36 on the ballot. Walmart, Target and Home Depot remain the initiative’s largest funders, and the California Retailers Association fully supported it. But the situation seemed to change after state Democrats this summer advanced a series of anti-theft bills and Gov. Gavin Newsom signed them into law, apparently appeasing some of those retailers.
As Politico reported, some of the big-box-store enthusiasm for the ballot measure then waned. Though insiders speculated that the crime bills were Newsom’s and the Democrats’ way of trying to dilute the value of Prop. 36, the Yes on 36 campaign had no interest in backing off the initiative.
A splintering of interests seemed to ensue. When Newsom signed one group of the anti-theft bills in August, he did so at a lectern set deep inside a cavernous Home Depot in San Jose. Standing as part of a group behind the governor was Rachel Michelin, president of the California Retailers Association.
Neither Michelin nor the association responded to multiple requests for comment. Nor did Target or Home Depot; neither chain has been active in the Prop. 36 campaign since their initial funding.
Greg Totten, leader of the California District Attorneys Association and co-chair of the Yes on 36 campaign, explained the proposition as a complement to the laws signed by Newsom, even though the initiative was drawn up long before the legislative anti-theft package was put together.
Totten said that the new state laws won’t stand up to a court challenge, since they appear to amend provisions of Prop. 47 — and under state rules, that cannot happen without a vote of the people. “This makes the passage of Prop. 36 crucial for addressing the issue effectively,” Totten said in an email. A spokesperson for Yes on 36 called the legislative package of laws “a half-measure that fails to address the root causes of retail theft.”
Both Newsom and Vice President and presidential candidate Kamala Harris have deflected questions about Prop. 36. Newsom clearly dislikes the measure, at one point saying it “is not the way of solving” the question of retail theft or drug possession and calling it an “unfunded mandate.” But he has backed away from the topic almost entirely, pleading lack of bandwidth.
“I fear I can’t do everything,” the governor said during an appearance last month. “I’m trying to get Kamala Harris elected president of the United States … I just pray, I really do, that people take a good look at Proposition 36.”
Harris has declined to state whether she will vote for Prop. 36. Some political observers suggest that because the initiative is being touted as a crime prevention measure, it’s a no-win for the former prosecutor to speak against it.
But unless public opinion changes radically, Prop. 36 will become law. Despite dire warnings about future prison overcrowding and no subsequent lessening of crime, a public driven by years of frightening retail theft videos appears ready for a new approach.
“The fact is, Prop. 36 cuts money for drug treatment and will force state and local governments to spend billions more on jails and prisons,” Anthony York said. With only weeks to go until Election Day, that argument is running second to a narrative with the power to strike fear into voters.
