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During the budget week from hell, we mildly cheered on the progress of the budget process. We were concerned about the short-term budget issues, but were also dismayed by the rapid rightward shift of the negotiations. Unfortunately, as an Editorial Board we simply cannot support the measures as they have been brought to the May 19 Special Elections Ballot. We share the concerns of the League of Women Voters that this package was poorly designed and poorly executed, resulting in a plan that will ultimately create more harm than good. And since none of these measures address the structural revenue gap, adding another layer to an already suffocating fiscal straightjacket makes no sense whatsoever.
We do not appreciate the fearmongering message from supporters of the initiatives, who obviously can't find anything to recommend in these solutions and thusly must warn of impending doom in order to get them passed. We remind voters the words of Bill Clinton: "If one candidate's trying to scare you, and the other one's trying to get you to think... if one candidate's appealing to your fears, and the other one's appealing to your hopes, you'd better vote for the one who wants you to think and hope."
Prop 1A - State Spending Cap. NO
Beginning with Prop 1A, the heart of this package, we cannot do better than the LWV in briefly describing the flaws:
[Prop 1A] would actually make it more difficult for future governors and legislatures to enact budgets that meet California's needs and address state priorities. It would amend the state Constitution to dictate restrictions on the use of funds put into the reserve and limit how "unanticipated" revenues can be used in good years. It could lock in a reduced level of public services by not taking proper account of the state's changing demographics and actual growth in costs. Prop 1A would also give future governors new power to make budget cuts without legislative oversight. Like the other propositions opposed by the League on this ballot, Prop 1A came from a deeply flawed process that resulted in measures written in haste and without public input or analysis. The League would support real budget reform, but we regretfully conclude that this measure would only make things worse. (League of Women Voters)
And there's actually much more. We don't have to guess about the impact of spending caps. In 1992, Colorado instituted a spending cap as part of TABOR, and within a few years spending on education, health care, and practically all other measures of government dropped from the middle of the pack relative to other states to almost dead last in every category. Considering that California ALREADY ranks near the bottom in these categories, the result would be even more disastrous. The California Budget Project estimates that the cap would force the state to reduce expenditures $16 billion dollars below the Governor's baseline spending projections by 2010, $17 billion by 2011 and $21 billion by 2012. That's a FAR BIGGER gap than the two years of tax revenues that would be lost by voting down 1A. These revenues are highly unlikely to ever be recovered, because of the faulty indexing of the cap and the fact that it's based on a level of revenues made during the worst economic crisis since the Great Depression. And Democrats claiming that there's an ingenious "out" of the spending cap because it could be raised if taxes are raised neglect to mention that this doesn't apply to fees, which would essentially end any efforts to work around the conservative veto by raising revenues through fees to fill a budget gap. In fact, the way the spending cap is structured, it would force contributions into the rainy day fund EVEN IN DOWN BUDGET YEARS.
Failure of Prop 1A would indeed reduce funding to our government in 2011-2013. Yet this assumes that legislators could never deal with revenues in the intervening two years. Further, the increased revenues we would receive from Prop 1A are simply not worth the long-term damage to our government that this measure would create. That's why the CTA and the Democratic establishment worked so hard to defeat a similar spending cap plan in 2005.
Prop 1B - Education Funding. Payment Plan. NO
Prop 1B isn't really inherently bad. It is simply made irrelevant by our position on Prop 1A through a clause that takes 1B down if Prop 1A fails. It provides a workaround to a disputed technical question in Proposition 98 by setting up a one-time $9.3 Billion fund for education. If this didn't come with the baggage of Prop 1A, it would be worth considering. But as it stands, we simply cannot accept the pair. That being said, if Prop 1A passes, it is important that Prop 1B passes. If we were to vote strategically, we would vote No on 1A and Yes on 1B, but we leave that decision to you.
It is worth noting that Prop 1B would not provide a solution to the catastrophic financial crisis facing public education in this state, and would do little if anything to help the 26,000+ teachers who received a layoff notice last month keep their jobs in the fall. Since Prop 1B's effects are not permanent, it would not exempt public education from the likelihood of funding shortfalls that Prop 1A would produce. Education has already suffered enough from one-time short-term budget deals that produced long-term problems.
Proposition 1C - Securitization of the lottery. NO
Prop 1C would allow the Treasurer to sell bonds backed by the lottery revenues. The budget deal assumes that we will get $5 billion for this deal, but that number remains highly speculative. However, our opposition does not stem chiefly from any quibble with the amount of money it would bring in, but rather from our overall sense of failed governance that emanates from the entire package and this proposition specifically. George Skelton calls this proposition a "payday loan" and no better words could describe this.
The fact is that we have done this before and it failed. Back in 2004 after Arnold wiped out the dreaded "car tax" he came to the voters of this state complaining about how we are going to fix this budget. So, he told us that if we just passed props 57 and 58 to sell some bonds and tweak the budget process, he'd handle it from there. Needless to say, the problem was exacerbated rather than ameliorated, in particular because the state NEVER SOLD THE BONDS. If this package represented real reform that would allow the state to move forward with an honest and democratic budget process, this would be more palatable. If we knew that we wouldn't just be back in the exact same situation 18 months from now, this might even be a reasonable idea to dig ourselves out of a very deep hole.
As it is, we'd prefer to wait for something real.
Prop 1D - Diverts $600 Million from Prop 10 First Five funds to other childhood programs. - NO
The First Five Program was created in 1998 by the passage of Proposition 10. By raising the cigarette tax by 50 cents per pack, California was able to create a sustainable program with its own source of revenue. But that has always been a thorn in the craw of the right-wing Republicans. It is spending they cannot touch for programs they would rather not fund. But the First 5 commission has been successful in providing funding for innovative and successful programs. And the commission's own prudence has led it to the chopping block. They planned for the inevitable decrease in cigarette taxes by building up a cash reserve, and that money has grown too tempting for the Legislature. It is a pot of money, and they cannot resist.
Rather than raiding First 5, we should have provided a sustainable revenue for the state. We should not abide by these budget gimmicks and ploys, and First 5 should not be their victim.
Prop 1E - Diverting Mental Health Services Funding - NO
This initiative would cut into the Prop 63 (2005) money for mental health services from the 1% surcharge on income over a million dollars. Although this slash job wasn't as bad as what was suffered by First 5, as it has a prominent defender, it is still unacceptable. Mental health services are financially prudent spending. It saves money that will end up being spent elsewhere, whether for homeless services or prisons. Diverting this revenue is penny wise and pound foolish. Both Prop 1D and 1E come from the "rob Peter to pay Paul" school of budgeting, although in this case "Peter" is young children and Californians with mental health needs who have few defenders or other resources to fall back on.
Prop 1F - Wasting Your Time. An Initiative. - NO
Prop 1F would block any pay raise for legislators when the budget is showing a deficit. It is an infinitesimally small amount of money in the grand scheme of things and accomplishes remarkably little for something on a statewide ballot. First, not getting a raise in deficit years is not a sufficient incentive for anyone to actually do anything, nor is it really meaningful shared suffering. The implicit assumption that the trivial penalty of Proposition 1F could be a meaningful incentive to not run a deficit treats elected officers as greedy sociopathic children who need petty personal financial incentives to deal with the state's budget. Building this assumption into the California Constitution is unnecessary and further entrenches in the state constitution far-right market fundamentalism and contempt for the role of government.
Second, if we're going to constitutionally impose shared suffering or financial penalties on elected officials, why is it a balanced budget that's the trigger? Why not base it on the number of California's children in poverty, the condition of our infrastructure, the state of our parks, the number of homeless, the funding levels of our schools? Instead, Proposition 1F privileges a morally blind view of the world -- balanced budgets are the only measure of legislative accomplishment for which elected officers can be penalized financially. Why this needs to be on the ballot can be answered only by Abel Maldonado, but it's a nothing more than an ill-conceived placebo designed to placate angry voters -- and so will no doubt pass. However, we don't need to countenance Abel's temper tantrums.