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Refighting Prop 98, and Why John Mockler Must Never Die

Updated: The San Diego Union-Tribune is engaged in a curious war over a very old question: when is an increase in spending a cut in spending? The added wrinkle is that the paper is focusing on education spending in California, and that takes us back to the education spending formula -- and incomprehensible morass -- known as Proposition 98.

To help the easily confused, this is a different Prop 98 than the eminent domain measure that will appear on your ballot this June. (Every decade or so, the Secretary of State busts open the odometer of blockbuster democracy, and resets the Proposition numbers at 1).

The education funding formula Prop 98, passed by California voters 20 years ago, is one of the two ballot initiatives that has the most influence over how our state is governed. The other, Prop 13, passed by voters in 1978, limits how fast taxes can go up, and requires a two-thirds vote of the legislature to pass a tax increase. (Two-thirds for passing a budget came decades earlier). Taken together -- and they must be considered together -- Props 13 and 98 represent the central problem of California budgeting and finance, and thus reflect what the voters want: 1. Limits on taxes, and 2. ever escalating spending on the government programs people most cherish.

Prop 98 is nearly impossible to understand. Based on extensive reporting I did on the subject for a 2006 book, I'm convinced that, among California's more than 36 million residents, there's exactly one person who may truly understand it -- its author, John Mockler, a longtime education official and consultant. God save us all if Mr. Mockler is ever so selfish as to die.  I, for one, believe it would be very much in the state's interest if the legislature and the governor would make it the law that John must live forever. Better yet, let's make it a constitutional amendment and put a Mockler Must Not Die measure on the next statewide ballot.

In brief, Prop 98 consists of three different formulas, or "tests." Each budget year is governed by a different test. What determines which test is used in a given year? The growth of general fund revenues, the economy, and the relation between the two. Exactly how does this work? Ask John Mockler.

In a gross over-simplification, Prop 98 effectively provides a constitutional guarantee of increasing education spending. In California, with a growing population, that makes a certain amount of sense.

But there have been criticisms that Prop 98 contributes to the state's up-and-down budget fluctuations. Gov. Schwarzenegger, who now knows more about this subject than he would like, is a particular critic of how the formula is reset each year. In my conversations with him, he often argued that one outlier year -- a very bad or very good year for state revenues -- can throw the Prop 98 guarantee and thus the whole budget out of whack. The California Teachers  Assn., which sponsored the measure and protects it with a ferocity the early Christians should have devoted to the Holy Grail, has been privately amenable to a little bit of smoothing of the formula, but will never sign on for wholesale changes. Why? They believe in funding schools. And Prop 98 is a major source of their power. Or to put it another way: If you control half the state budget, you control the entire state budget. Goo goo types occasionally argue for a simplification, but don't hold your breath. Prop 98's very complexity is its most effective defense against reform. It is difficult to change what you cannot understand. 

So when is a cut in education spending a cut in education spending? When the state doesn't fully fund the Prop 98 guarantee. And when is that exactly? Well, there's one guy who can tell you.