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Decoding California's May Special Election

It's no easy thing for Californians to figure out exactly what the six measures on the May 19 special election ballot do. For one thing, the Legislature and Governor did their best to hide the real impact of the measures by ordering up some glossy campaign-speak to decorate the titles and summaries on the ballot. It's easier to sell "budget reform" and "lottery modernization" than a tax increase (Proposition 1A) and more borrowing (Proposition 1C).

But even without the deceit, these measures do not yield to a quick study. For the first time in the nation's history voters are being asked to amend a state constitution to require the use of linear regression in determining how much the state will invest in higher education, health, and environmental protection. If it were necessary for a voter to actually explain how Proposition 1A works before being allowed to vote for it, I suspect it would get less than 1 percent of the vote.

As hard are the measures to understand, it may be harder still for them to answer the critical question: What do they mean for California? What signal will voters be sending by passing them?

Propositions 1D and 1E are the most clear-cut. If they pass, these measures will shift to the state's general fund revenues currently being raised for, and dedicated to, services for preschool children and the mentally ill. These programs, and their supporting revenue, were originally enacted by voters in Proposition 10 (1998) and Proposition 63 (2004). If they temporarily reverse themselves, voters will be making a statement about priorities: protecting schools, health care, and prisons is more important than funding mental health and early childhood services. But as Joe Mathews has pointed out, they will also send a signal that initiative campaigns should never again do the responsible thing and pay for new spending with new revenue.

The meaning of Proposition 1C is more hidden. It's called the Lottery Modernization Act but that title is just political cover. Gov. Arnold Schwarzenegger, having famously promised in 2003 and 2004 to "tear up the credit card forever," wants another MasterCard moment.

At its heart Proposition 1C allows the Governor to borrow against future lottery revenues to pay our bills today. Schwarzenegger resists the notion that this is actually borrowing. It's a "gift from the future," he said a few months ago. But the reality is that Proposition 1C asks voters to take on more debt, a very expensive and risky debt at that. No one can be sure that changing the lottery will yield significant new revenue. Investors will price that uncertainty into their calculations when it comes time to set an interest rate for the lottery bonds. This debt will cost taxpayers more than the 2004 deficit bonds Schwarzenegger once vowed would be the state's last.

Resorting to debt is a popular tactic in the state Capitol. It lets governors and lawmakers put off budget reckonings -- tax increases and spending cuts -- until term limits boot them out of town. But there's no escape for the voters. Pay it now or pay up later, but the bill will come due.

The bumper sticker for Proposition 1A is that California needs a rainy-day fund and a spending limit to get its budget under control. And it would be hard to find any budget expert who doesn't believe it makes sense for the state to put aside revenue in good times to draw down when economic storms swamp the budget in waves of red ink. In fact, as I've explained elsewhere, it's such a good idea that the constitution already requires it. At Schwarzenegger's urging in 2004, voters approved Proposition 58, part of which sets aside a growing proportion of revenues to create an $8-billion budget stabilization account. California also has a spending limit, originally passed as Proposition 4 in 1979 and revised by voters in 1990, which prevents state spending from growing faster than the economy itself.

But the real impact of Proposition 1A will be in the way its impossibly complex machinery changes California's budget priorities.

Voters are being asked to write in stone a new budget direction for the state. Schools and community colleges will continue to follow the spending trajectory set out by Proposition  98, the state's minimum funding guarantee for education. But through the interaction of Proposition 1A's rainy-day fund and spending limit, infrastructure projects -- roads, dams, canals, pipelines, sewage treatment plants, levees, the kinds of projects California formerly (and intelligently) funded through fees and taxes on those who used and benefited from the projects -- will have a permanent new claim on general fund revenue. Tax cuts will also get a favored position.

But all else in the state budget -- higher education, health, social services, parks and the environment -- will be ratcheted down over time. And major initiatives to address pressing state problems, such as the health care reform proposed in 2007 by Governor Schwarzenegger, will become simply impossible to enact.

More than a decade ago my longtime colleague Peter Schrag began writing about what he called the "Mississippification" of California in the wake of Proposition 13 and the tax revolt. May 19 may be the day we Californians really start singing "Dixie."

New America's California program is partnering with the California Center for Research on Women and Families to create a rich debate among policy experts and citizens about the May election ballot measures. This piece and others can be found at CCRWF's new site.

The 8 California ballot initiatives

The 8 ballot initiatives appear to be a case of irresponsible "borrow now so as to spend (even more) later"...

Oh! Where have my taxes gone..?

Proposition 1A through 1F of the propositions in the upcoming special election deserve a NO vote, because it's downright fraud. Remember you are paying for prison cells, education health care and other forced Federal mandates for illegal alien families. Welfare - $1.8 to $3 billion per year is lost due to fraud in the Food Stamps, Medi-Cal and Cal WORKS programs. Remove illegal immigrants and felons from Cal WORKS. More than 42 percent of California’s taxpayer-funded, Medi-Cal births are to illegal immigrant mothers. Every month, $37 million in welfare and food stamps, health care goes to illegal alien families in Los Angeles county. A blockbuster example of fraud is the Earned Income Tax Credit (EITC). Economics writer Ed Rubenstein’s new report, “The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism,” The author says immigrants collected about $12 billion from the EITC last year, the majority not paying a cent towards it. Robert Rector of the Heritage Foundation found high school-dropouts-who headed households pay an average of $9,700 a year in taxes but collect an average of $32,138 a year in benefits. All this money in real dollars is procured from unaware taxpayers. Surf NUMBERSUSA for the truth not the propaganda you expect for the open border zealots.

This isn't reform; it's pure and simple huge taxation plans!

Do not trust the sleazy polititions!

The explanation of the May 19th 2009 California Special Election is simple.

The whole election is merely a multi-billion dollar taxation package.
1A: extends taxes
1B: spends those extended taxes
1C: borrow to spend more now
1D: raids taxes for the general fund
1E: raids more taxes for the general fund
1F: meaningless red herring to make you think it's about reform

They want to raise the monies taken in by more than a quarter of the entire budget. This isn't reform. It's pure and simple taxation!

The California legislature doesn't want to be seen to raise taxes; they want YOU to raise the taxes on yourself by voting in propositions 1A to 1E. 1F is just there to make it look like reform.

california fraud

24 year old democrat here. These initiatives have fraud written all over them!!!!!!

Special Election

It's clear that the packaging of these ballot measures doesn't add up to the potential impact they will have. I find it interesting that the media isn't providing adequate coverage as I believe in an informed public. Recommend a NO vote on all Propositions 1A through 1F.

Prop. 1A - Proponents are calling it "budget reform" and "budget stabilization". However, the bill allows for the so-called spending limit to increase every time the Legislature increases taxes! Is that really a spending cap? It also EXTENDS the recent sales tax increase, the doubling of the car tax, and the state income tax increase for ANOTHER two years. We already pay the highest income tax in the nation, and under 1A, we would pay even more! On top of all of this, there would also be a reduction in the tax credits for dependents, costing an average 200 dollars per child. Altogether, the average California family would be paying around 1,100 dollars more a year! This is something that none of us can afford.

Prop. 1B - Earmarks 9.3 billion dollars to go to our schools, and while this may seem like a good idea, budgets should be considered in their entirety, and not just pieced together and through mandated formulas. 1B would withhold much needed money from the rest of the state budget.

Prop. 1C - An attempt to change the state lottery and spend tomorrow's lottery money today, to avoid making the tough decisions we elected them to make.

Props. 1D and 1E - Redirects children's and mental health services funding to the state's general fund. Generally this is a good thing, reversing "ballot box budgeting" and budgeting through rigid formulas, but the politicians and union bosses are trying to pass 1A-1F as a package, and the Republican Party recommends rejecting all the propositions as a package.

Prop. 1F - Naively hopes to prevent budget deficits by withholding raises for legislators and elected state officers if the state budget does not balance. Frankly, any politicians who would vote themselves raises in those situations, deserve to be put on record so that the voters can take appropriate action.

California budget and the Economy

Game over gents. Thru, finished, over, done with, ended, kaput. Can I make this statement any more clear? I am not sure most Californians understand the nature of what is going on here with this current economy, much less the so called California State budget? To be exact, it ain't just the California state budget which is broke. The current budget "game" is finished... worldwide, and this current "game" ain't gonna get "fixed". No way, no how. The current game is OVER. It has ended. There is no "fix". What is needed is acknowledgement that this is the case, and then start a new game. The old game has ended..... in bankruptcy. And bankruptcy is what needs to happen, not only the state of California, but to the nation as well. Plain and simple. Put the entire business into a type of bankruptcy proceeding. And start over. There is now no other way, no matter what the so called experts say. Everyone else (China, India, Russia, etc.) will cooperate when they realize that there is no other choice. In the meantime, your politicians will go thru the usual motions, pretending that they know how to control this or that. But they don't.
So the California special vote this past week was just a stall as events will prove. Think this comment is just blather & opinion do yah? Just remember you read it here.