Hold your nose, but vote for Props 1A, 1B, 1C, 1D, 1E and 1F.
Thursday, April 30, 2009
California is in a huge fiscal mess. Ever since the passage of Proposition 13 in 1978, requiring a two-thirds majority vote to raise taxes, the state has lacked a sane way to address its fiscal needs. The recession has made the crisis much worse, but it is the underlying structural problem that needs change. Now.
The propositions on the May 19 ballot are designed to pay for the “solution’’ the Legislature came up with in late February, when lawmakers adopted a plan to fix the $42 billion deficit after the longest budget impasse in state history.
The props suck – this is no way to run a candy store, let alone California – but for now, they’re what we’re stuck with.
A yes vote on Propositions 1A, 1B, 1C, 1D, 1E and 1F is a dirty fix for the budget morass, but a short-term one we hope will lead to true budget reform on the ballot in the near future.
Proposition 1A would trade higher taxes for two years (1-cent sales tax, increased vehicle license fee, increased income tax on top wage earners that will bring in an additional $15 billion in revenue thorough 2012-13) to help fix the state’s immediate budget problem. This money will be used to balance the budget in the fiscal year that begins July 1. In exchange for the temporary tax increase, 1A creates a spending cap and transfers money to a “rainy-day” fund in good fiscal years.
Proposition 1B requires the state to pay K-12 schools an additional $9.3 billion over a number of years beginning in 2011-12, but will not go into effect unless voters also approve 1A. It’s intended to settle a legal dispute about how much money the state owes schools under Proposition 98, approved by voters in 1988 to guarantee public school funding.
Proposition 1C authorizes the state to borrow $5 billion against future lottery profits in 2009-10 and $5 billion in 2010-11.
Proposition 1D allows the state to temporarily take money from First 5’s early-childhood programs: $608 million in 2009-10 and $268 million annually (through 2013-14).
Proposition 1E authorizes the state to take about $230 annually for two years from mental health programs.
Proposition 1F – the most popular of the lot – would prevent state officials from getting pay raises during budget deficit years.
Proposition 1A is the most controversial measure. The governor and legislators say it’s the linchpin of the $48 billion package. But far right pundits don’t like it because it increases taxes, and the left doesn’t like its state spending cap. The anti-tax Howard Jarvis Taxpayers Association is fighting it, and Republican gubernatorial frontrunners Steve Poizner, the state insurance commissioner, and former eBay head honcho Meg Whitman, oppose 1A – and the entire ballot package.
On the left, the League of Women Voters opposes 1A, 1C, 1D and 1E. (They are neutral on 1B, but argue that the Legislature can restore school funding without it.)
“We oppose these measures because they are not the solution to our long-term financial crisis,” says League President Janis R. Hirohama, adding that the league would support real budget reform.
She’s dead right. The state needs to change the two-thirds requirement. This arcane restriction, which cedes control of the budget process to the minority party, is largely to blame for California’s inability to pass an on-time budget this millennium. Only two other states, Rhode Island and Arkansas – with a combined $4 billion spending plan compared to California’s $100 billion – have such a requirement. A simple majority, or even a 55 percent approval in both the state Assembly and Senate, would make more sense. We fully expect to see lawmakers and everyone who has endorsed the special election budget package embrace such a change – and hope to see it on the ballot in 2010.
And we don’t like betting California’s future on the lottery, or taking money away from preschool programs.
Still, California’s financial outlook is so bleak we can’t support voting no on the six ballot measures.
The 17-month budget adopted in February, which ends in June 2010, includes $15 billion in program cuts, $12.8 billion in temporary tax increases and $11.4 billion in borrowing.
It’s already fallen short. Even if voters approve the budget-related ballot measures, the state’s looking at an $8 billion gap by June. If the props fail, the deficit grows to $15-$20 billion.
It took months of political wrangling to get three Republicans in each house to agree to support the current budget package. If voters reject the compromise plan – which hinges on the May special election – this will send lawmakers back to the drawing board, and it’s nearly impossible to believe Republicans will support a new deal that includes anything other than deep cuts.
The Weekly urges a yes vote on propositions 1A-1F. This is no way to balance a budget. But a $20 billion gap will send California over a cliff. So we’re going to hold our noses, vote yes on May 19, and hope these lousy measures will lead to real reform.