Prop 63

There Is No Budget Deal Until California Voters Say OK

Joe Mathews — Thu, 12 Feb 2009 15:18:00 -0500

Want more proof that the initiative process is too powerful in California? All the recent talk about lawmakers reaching a budget deal is bunk. The deal, even if it passes, requires the voters to sign off on multiple ballot measures later this year. That's right -- California simply can't handle a budget emergency without a vote of the people.

Details have not been released, but I count at least five separate ballot measures that would be needed to complete this deal: 1. a measure authorizing the modernizing of the lottery and borrowing against future funds. 2. the approval of some sort of new spending limit that Republicans insisted upon in negotiations. 3. Changes to the state's education funding formula. 4. A measure permitting the state to raid money that voters approved for early childhood programs and 5. A measure permitting the state to raid money that voters approved for mental health programs.

Given the extreme costs of delays by the legislature, and their inability to do much without the voters OK, the real question is: why bother having a legislature at all?

Only One Way Out Of California Mess: The People

Joe Mathews — Fri, 09 Jan 2009 03:12:00 -0500

It has become obvious that Gov. Schwarzenegger and legislative leaders of both parties simply won't be able to reach a compromise that comes anywhere close to closing California's rapidly growing budget deficit, now estimated at some $40 billion over two years. The state government is running low on cash. Within weeks, it may have to start paying people in IOUs.

Democrats simply won't agree to enough cuts. Republicans won't agree to tax increases, and they can block that because of the state's requirement for a two-thirds vote. The Democrats' convoluted (if politically smart) attempt to do an end run around two thirds and raise taxes by majority vote isn't going anywhere; even if it's revived and signed into law, it's all but certain to get struck down in the courts or overturned by referendum. The governor you ask? Schwarzenegger has little credibility with lawmakers of either party. When it comes to big deals, he simply can't close.

For anyone who still held out hope that our state's leaders could fashion a way out of this mess by themselves, the legislature's very own analyst offered an answer today: no way. The legislature's failure to act over the last two months has added $12 billion to the problem, according to a report from the legislative analyst's office and comments by its chief Mac Taylor. So what to do? The voters, via the ballot measure, are the only ones who can resolve the crisis.

That's my reading of the LAO report, at least. The LAO explicitly suggests that the legislature and governor seize on the idea of a special election (talked about for June or later) and move it up to April. What would be on the ballot? Well, first there would be two ballot measures that were sent to the people as part of last year's budget agreement --the $5 billion in lottery borrowing and the establishment of a stronger rainy day fund for the state. To that, the LAO would add measures, suggested by Schwarzenegger, that would ask voters to redirect money previously set aside by ballot initiatives (Prop 10 for early childhood, Prop 63 for mental health) to the state's general fund.

The LAO and Taylor don't stop with just these four measures. The legislative analyst actually proposes new measures to add to the ballot. What are they?

1. Two new measures that would also grab money apportioned by initiative to help with the current state budget crisis. One of the measures targeted would be Prop 49, the after-school initiative sponsored by Schwarzenegger himself in 2002

2. A measure that would permit the state to issue gas tax bonds -- that is to securitize future gas tax revenues -- and use the money to accelerate the building of current transportation projects.

3. A measure that would ask voters to approve massive short-term borrowing in order to put such borrowing on a stronger legal footing if it is challenged in court. The LAO suggests one method might be to seek more "economic recovery bonds" -- that is general fund bonds to cover the deficits -- like the $15 billion in bonding authority in Prop 57, which was approved by voters in the last major budget crisis, in early 2004.

4. A package of tax increases would be placed before voters as ballot measures. These are tax proposals that Republicans won't support. The LAO, bowing to political reality, says the legislature should let the people decide. Given the number of tax proposals on the table, it's possible this could produce a half-dozen different measures.

All told, the legislative analyst -- yes, these folks work for the legislature, which is supposed to handle the budget -- are arguing that the only way out of the fiscal mess is an April election in which voters would cast ballots on, by my count, between 9 and 15 complicated and important measures. (The LAO report is titled, "Overview of the Governor's Budget." It would have been more honestly titled: "You Know That Question About Whether the State Is Governable? It Isn't. Even Those of Us Who Work in the Legislature Know This"). Clearly, California has reached a point where it is no longer a true republic. Ballot measures are the coin of the realm. We are truly a blockbuster democracy.

And if the voters don't approve most of these budget measures in the special election the LAO wants?

Well, then, there may be no way out.

Department of Hypocrisy: California Republicans, Champions Of Direct Democracy, Now Want To Violate It

Joe Mathews — Wed, 20 Aug 2008 14:58:00 -0400

Today's LA Times story by my longtime colleague Evan Halper makes one thing painfully clear. California's Republican legislative leaders, for all their championing of direct democracy and the rule of the people when it comes to subjects such as Prop 13 (property taxes) and Prop 22 (same-sex marriage ban), are prepared to violate all sorts of voter-approved initiatives to get a budget deal and avoid a tax increase.

Halper got his hands on a memo that details what Republicans are talking about. As Halper recounts the memo's contents, the Republican proposals involve "diverting money specifically set aside by voters for local governments, road and other transportation projects, mental health programs and early childhood education." To give a little history, voters set aside money for transportation via ballot initiative with Prop 42 (2002), for local government with Prop 1A (2004), mental health programs with Prop 63 (2004), and early childhood with Prop 10 (1998). For Republicans to want to raid such funds is hypocrisy. To borrow against such funds in the name of opposing tax increases is dishonest. The act of raiding such funds creates a debt for the state that must be paid back. The very act of raiding the funds is thus a tax increase in disguise.

While much of Halper's story is about the sales tax, the dispute between Republican Assembly leader Mike Villines and Gov. Schwarzenegger is not merely a fight over taxes, no matter how much conservatives frame it as such. It's also about the merits of raiding such funds and violating the will of voters. Schwarzenegger is saying that you can hold the line on all tax cuts or protect the will of the voters -- but you can't do both. And he thinks there's a deal in which he trades a temporary sales tax hike for a rainy day fund and some sort of spending limit. If he's right, Republicans should leap at the deal -- and focus their attention on making sure that the spending limit is real. Republicans also should bargain for a seat at the table in the tax reform effort being launched by Assembly Speaker Karen Bass. And when they get such a seat, they need to participate openly, with the knowledge that some taxes may go up and some may go down as a result. Yes, that may be too much to hope for. But Republicans could bring a business perspective to tax reform, and focus the reform effort not only on producing a broader, more stable tax base but a tax approach that improves the growth picture in California. .

The Problems of Initiative Policymaking

Joe Mathews — Wed, 13 Aug 2008 13:34:00 -0400

Rose King was part of the committee that drafted Prop 63, the successful 2004 California ballot initiative to fund mental health programs. But she writes in the Sacramento Bee that she considers the effort a failure -- in large part because of the fact that it was established by initiative. (Hat tip: Fox & Hounds Daily).