Shorter Bass And Steinberg: Booga Booga!

by: David Dayen

Fri Apr 17, 2009 at 16:21:45 PM PDT

There seems to be a great deal of misinformation about Proposition 1A, the spending reform measure. This is NOT a spending cap, but rather a mechanism to force savings in good years to protect funding for services when our economy sours.  If California had a rainy-day fund like most other states, $9 billion in cuts could have been avoided this year. In the long-run, Proposition 1A will stabilize state spending for critical services.

Um, actually, folks, that's what a spending cap IS.  It caps spending and puts money into a rainy day fund.  Of course, the way this cap is structured, the rainy day fund would have to take money even in DOWN budget years, due to its stringent, restrictive nature.  The line about how $9 billion in cuts could have been avoided this year with rainy day fund money is offered without the knowledge that the money would have had to come FROM somewhere, and would have meant $9 billion in cuts in years prior.  Not to mention the fact that it would have had to be replenished almost immediately.  With this spending cap - yes, Madame Speaker and Mr. President pro Tem, sorry to burst your bubble but that's what it is - spending will be forced $16 billion dollars below the Governor's baseline budget next years.  That's the ENTIRE gain of the $16 billion in temporary tax increases in just one year.  And the cap goes on and on and on.

Pathetic.  About the only good thing here is the shout-out to eliminating 2/3 for budgets and taxes.  I appreciate that, but would appreciate some honesty about the spending cap even more.

UPDATE: Funny, Steinberg and Bass' pal Mike Villines, who has been going around the state with them promoting 1A, has some different thoughts about what the measure would do:

Proposition 1A represents a significant victory for taxpayers at a time when our state needs it most. Proposition 1A ties the hands of legislative liberals, and it forces our budget into a fixed formula and a hard spending cap. That means, for the first time in decades, that liberals will have to make tough spending choices and cut their pet projects.

It also means the taxpayers will no longer be treated like a giant ATM machine. Consider this fact: if we had Prop 1A in place today, our state would not be $31 billion in the red. Instead, our state would have a much more manageable $5.4 billion budget gap. That means that during the worst economic recession since the Great Depression, Proposition 1A would have ensured that our budget gap was manageable. That's the proof that Proposition 1A protects taxpayers.

Villines is wrong about this being a good idea, but he happens to be right on the numbers.  With a spending cap, approximately $27 billion MORE would have had to been cut in the years leading up to the current budget.  That's more than half of the entire education budget.

Did you guys think we wouldn't notice the diametrically opposed arguments, depending on the constituency?

Dear Fellow California Democratic Party Member:

At this month's California Democratic Party Convention in Sacramento, you will be asked to take a position on Propositions 1A, 1B, 1C, 1D, 1E and 1F that will appear on a special statewide election May 19.  We strongly urge you to support this package to provide California the short-term revenues to get through these difficult economic times, as well as the long-term reforms to stabilize our budget process and protect funding for vital services.    After months of difficult negotiations, we made some of the toughest decisions elected officials could ever make.  We closed a $42 billion budget shortfall that threatened to send California into fiscal collapse - halting thousands of jobs, devastating critical education, health, children's and senior services, and plunging our economy into deeper meltdown.

The tough choices we made will begin the long process of getting California back on track and providing long-term stability to the programs and services we all value.

Make no mistake: the final budget agreement contains important victories that hold true to our shared Democratic principles.  In particular, we negotiated four years of desperately needed revenue increases, worth $12.5 billion this year alone.  We cannot overstate the significance of this achievement.  By doing so, we were able to protect education, health care and safety net services from even deeper cuts.

We were also able to stave off Republican demands to roll back hard-fought environmental and worker protections.  And, through Proposition 1B, we will ensure that schools are repaid over time for the painful cuts they have endured because of this budget crisis.

But the package and revenues we negotiated will all be for naught if we don't pass Propositions 1A-1F in May. Unless Prop. 1A is approved, California will lose $16 billion in revenues from the sales, vehicle license and income taxes beginning in Fiscal Years 2011-2013.  Prop. 1A also provides the mechanism to restore $9.3 billion in funds to schools.  And without Propositions 1C, 1D, and 1E, we will lose another $7 billion in funding.

Losing $23 billion in revenues, on top of the $8 billion deficit projected by the Legislative Analyst, will result in renewed demands for catastrophically deep cuts to schools, hospitals, essential children's services and senior programs for the foreseeable future.

There seems to be a great deal of misinformation about Proposition 1A, the spending reform measure. This is NOT a spending cap, but rather a mechanism to force savings in good years to protect funding for services when our economy sours.  If California had a rainy-day fund like most other states, $9 billion in cuts could have been avoided this year. In the long-run, Proposition 1A will stabilize state spending for critical services.

Passing Propositions 1A-1F is the first step in restoring our state's fiscal health and voter confidence in state government.  This is essential for us to move forward with our shared priorities such as expanding healthcare to all Californians, further reforming the budget process to eliminate the destructive 2/3 requirement for budgets and taxes, protecting against climate change, and ensuring necessary education, health and social services for the people of California.

We hope you will join us in supporting Propositions 1A-1F.