Ballot Measures

Should Voters Have to Approve All Pension Increases?

Joe Mathews — Fri, 26 Jun 2009 15:33:00 -0400

California is slowly moving in this direction. Orange County adopted a measure requiring voter approval of pension increases for government workers last fall. San Diego has a similar requirement in place. Now Ventura County is looking at putting such a measure on the ballot next year.

It's true that state legislators and local elected officials have a record of irresponsible pension giveaways. (For evidence, look no further than SB 400, the notorious 1999 law that permitted the spiking of pensions across California). But, as this story notes, voters can be big spenders too, even when it comes to pensions.

There's also a question of how intimately voters should be involved in government decisions. The move by economic conservatives to require votes on pensions mirrors the effort by environmentalists and NIMBY types to require votes on every change in land use policy. I can think of any number of controversial government decisions that might be routinely kicked to voters. Should every local community vote on any new government contract? Every new traffic rerouting? Every school opening or closing? Where does it stop?

Matt Welch vs. the LA Times

Joe Mathews — Wed, 03 Jun 2009 14:58:00 -0400

My friend and former LA Times colleague Matt Welch, writing on his blog at Reason, the libertarian magazine he edits, makes a very good point about media commentary, particularly from our former paper, that voters are responsible for the state's fiscal fix because they vote for so many ballot measures that boost spending.

I think the line of commentary is right. But it's also new, and it's more than a little disingenuous for the LA Times to be making this argument. Welch looked back and discovered that the LA Times endorsed 20 of the last 22 bond measures on the statewide ballot. Patient, heal thyself.

Welch also reveals that one of the two non-endorsements happened only becasue of his own work inside the editorial board.

From the blog: "The only other bond measure lacking support from California's premier newspaper was a $2.85 billion low-income housing initiative in 2006, one of five bonds on that particular ballot. Without boast or fear of contradiction, I can report that the paper would have hi-fived that measure, too, had I not been sitting on the editorial board then, arguing until I was Laker-purple in the face that incurring so much bond indebtedness so soon after Gray Davis' fiscal meltdown was courting budgetary disaster. It was because of this turd-in-punchbowlitis that the following sentence made it into the November 2006 endorsements editorial: 'But $42.7 billion in new bonds would mean that nearly 6% of the state budget would be claimed for debt service each year.' So instead, my colleagues went for $39.85 billion. It was the small victories that counted.

"I mention all this not to tweak the noses of my old pals back home, but rather to highlight a persistent mindset among California's political class: It's everybody's fault but mine, and there is no such thing as yesterday."

Let's Vote More

Joe Mathews — Wed, 20 May 2009 12:23:00 -0400

Angry about special elections and long ballots full of confusing propositions? In today's LA Times, I suggest the solution may be... more regularly scheduled elections. Specifically, a strict system of quarterly elections that the state and all local governments in California would follow. The story is here.

Stop the Lies: Prop 1A Isn't That Long

Joe Mathews — Wed, 13 May 2009 20:51:00 -0400

cross posted at Fox & Hounds Daily.

Criticize Prop 1A if you like, but opponents of the measures (and heck, even some supporters) should stop saying that it's long. It's not.

By comparison to other California ballot measures, 1A is short and compact. And the legislative and gubernatorial staffers (not to mention the interest group folks) who drafted 1A have done a much better job of being concise than sponsors of ballot initiatives.

Prop 1A is a little less than 3,000 words. If that seems like a lot, consider this: between 2000 and 2006, 15 of the 46 voter-sponsored initiatives on the ballot were over 5,000 words long, according to a 2008 report from the Center for Governmental Studies. Eight of those 46 initiatives were longer than 10,000 words.

The trend, the CGS report found, is at least 20 years old. Between 1980 and 1987, only two initiatives were longer than 5,000 words. (Irony: One of those initiatives, Prop 37, the lottery initiative, would be changed under Prop 1C on next Tuesday's ballot). Most initiatives in this era - and previous eras - were about the same length as Prop 1A, between 1,000 and 3,000 words. But in the 1988 and 1990 elections, all 13 initiatives exceeded 5,000 words.

How about this for an irony? A big reason why voters must decide on Propositions 1A thru 1E is because of previous ballot initiatives that were themselves longer than Prop 1A. In addition to the lottery initiative of Prop 37, Prop 98 (the education initiative that provides the basis for parts of Prop 1A and Prop 1B), Prop 10 (the early childhood initiative that would be partially undone by Prop 1D) and Prop 63 (the mental health initiative that would be partially undone by Prop 1E) were all longer than Prop 1A.

If anything, instead of criticizing 1A for being long, opponents would be more honest to argue that it's not long enough. Prop 1A doesn't always explain or define its terms. And in the unlikely event it were to pass, there would be quite a bit of debate - and litigation - about the exact meaning of some of its language.

So, voters, please give Prop 1A a read. It won't take you long.

Decoding California's May Special Election

Mark Paul — Thu, 30 Apr 2009 01:30:00 -0400

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.

Please Join Us This Saturday In San Diego

Joe Mathews — Mon, 27 Apr 2009 14:33:00 -0400

Please join us this Saturday morning, May 2, in San Diego for what should be a fascinating discussion about the ballot measures on the May 19 special election. The event runs from 10 to 11:30 a.m. at the San Diego Hall of Champions. (Sports fans out there would be wise to make it a day of California governance and sports). The event is free, but be sure to reserve yourself a seat by signing up here or here. And you can consider this brunch if you like--there will be food.

The panel is headlined by former Congressman and former state finance director Tom Campbell, who has thought as deeply about the state budget as anyone alive. (He has an interesting discussion on tax reform currently running on his web site). Also on the panel are Chris Reed of the San Diego Union-Tribune, writer of America's Finest Blog; New America senior scholar Mark Paul; and your blogger. The co-sponsors are New America, the Center for Policy Initiatives, and the City Club of San Diego.

What Mr. Mayor Doesn't Know

Mark Paul — Wed, 01 Apr 2009 00:34:00 -0400

Former LA Mayor and state education secretary Richard Riordan is getting a lot of attention, here and elsewhere, for his screed against Gov. Schwarzenegger and the budget measures on the May 19 special election ballot. What no one seems to have noted, however, is that Riordan doesn’t seem to have a clue about California fiscal realities.

In just 777 words Riordan manages to leave no California budget canard behind.

More taxes on the rich “will be economically disastrous for California,” Riordan (“and I am one of them”) writes. It is perhaps a sign of how little taxes matter to the rich that Riordan seems not to have noticed that California has spent the last three decades lowering his taxes.

Since 1978 California has slashed property taxes. It eliminated the inheritance tax and lowered the top income tax rates on high incomes. It has lowered both the nominal and effective corporate income tax rate, and in 2011 will let multinational and multistate companies reduce their payments even more. Economists may quarrel about who bears the burden of the corporate income tax, but to the extent it falls on wealthy shareholders and owners –– and they always insist it does –– the rich now pay less.

As a result, even with the temporary .25 percentage point income tax hike in the recent budget (which hit the middle class proportionally harder than the rich), the wealthy pay lower tax rates today on their income and property than when Ronald Reagan was governor. This trend hardly seems likely to set off the “exodus” of the rich that Riordan suggests.

That’s not the only exodus Riordan imagines. “Anti-business rules and laws…are scaring companies out of California,” he writes. Except that they aren’t, as Jed Kolko and his colleagues at the Public Policy Institute of California have comprehensively demonstrated in a series of studies: “Policymakers’ (and the media’s) concerns about jobs leaving California are for the most part unwarranted.”

Riordan is equally unhinged from the facts on the spending side of the budget. He throws around all the usual buzzwords: “duplicative,” “bureaucrats,” “unions,” “special-interest groups.” But Riordan seems not to have noticed that California has been the nation’s leader in restraining costs in public health programs; it spends less per MediCal beneficiary than any other large state. Or that it is near the bottom in per-pupil spending in schools, with the largest secondary school classes in the nation.

Yes, California needs to reform health care and education (an effort that notably ground to a halt during Riordan’s tenure in Sacramento as education secretary). But “save billions of dollars” without significantly reducing the quality of health and education? Only in your dreams.

If Riordan’s uninformed shriek, written by the former mayor of the state’s largest city and published in the state’s most important newspaper, represents the level of seriousness at which the May election issues will be discussed, California is in even bigger trouble than I imagined.

PPIC Poll Shows Five Of Six California Measures In Trouble

Joe Mathews — Thu, 26 Mar 2009 20:33:00 -0400

Here's a link to the poll, which shows five of the six measures on the May 19 special election ballot with less than 50 percent support. Here's pollster Mark Baldassare's take on the results in the Sacramento Bee. And here's my upbeat prediction, via Fox & Hounds Daily.

That optimism is based on the fact that opposition to the measures is poorly funded, disorganized and late to the game. The Sacramento Bee, in this news story, suggests the opponents are coming together to fight Prop 1A, the spending limit. But the opposition is forming too late to make much difference on its own. The real problem is that people don't understand much about the measure other than its link to taxes. As Ted Costa, the anti-tax activist who is co-chair of one of the campaigns against 1A, said on a conference call yesterday, "We can beat this with just robocalls." 1A likely loses even without a campaign against it.

Whitman Takes the Easy Path on The Props

Joe Mathews — Tue, 17 Mar 2009 18:44:00 -0400

Writing in the Sacramento Bee, Meg Whitman, the eBay chief turned GOP gubernatorial contender, comes out against Props 1A (spending limit and rainy day fund), Prop 1B (a boost in the education funding base) and Prop 1C (a plan to modernize the lottery and borrow against future revenue). She supports Props 1D and 1E (which redirect voter-approved moneys for early childhood and mental health programs) and the populist 1F, which would bar legislative pay increases in years with deficits. All six measures were part of last month's budget deal and appear on the May 19 special election ballot.

This is safe politics but something short of leadership. Whitman needs the conservatives who vote in Republican primaries, and they hate the temporary tax extensions that are part of Prop 1A. (If the measure passes, the temporary taxes run for 4 years. If it fails, they run for 2 years). One potential rival, former Congressman Tom Campbell, has bravely backed Prop 1A. Another, insurance commissioner Steve Poizner, has adopted a line similar to Whitman's.

Poizner and Whitman are taking the easy way. What would be the hard way? I'd love to see these two Republicans put together plans that would address the state's budget problems. They won't of course. Because of the politics and because the state's budget deficit can't be closed without increasing some taxes. If there's a way to do it without tax increases, I haven't seen it.

'These Are Not Serious People'

Joe Mathews — Thu, 12 Mar 2009 21:16:00 -0400

That's how California Gov. Arnold Schwarzenegger today characterized opponents of the six measures that were part of last month's budget deal and go before voters in the May 19 special election.

Schwarzenegger made plain in a speech at the Commonwealth Club that, despite sagging approval ratings, he intends to campaign strongly for the package of six measures.

He also revealed a tough political strategy: go negative against opponents of the package and particularly the spending limit and rainy day fund measure, Prop 1A. In the speech, Schwarzenegger depicted those opponents as out of the mainstream, "the far left" (who want to spend) and "the far right." He was not kind. Consider this excerpt:

In a blast at members of his own party, he said: "Those who say that we could balance the budget through spending cuts alone are guilty of political cynicism at its worst. These are not serious people."

That's right, the governor of California effectively declared that much of the Republican establishment, a majority of GOP legislators and the two of the three GOP candidates for governor in 2010 (Steve Poizner and Meg Whitman) "are not serious people." That's a bit much, but their opposition to taxes in this circumstance is certainly unserious. It appears that the third GOP candidate, former Congressman and Schwarzenegger finance director Tom Campbell, has the governor's endorsement. If he wants it.

As for the Democrats, he called them hippies and said they don't know math. "Those who say we could balance the budget through tax increases alone reveal their total economic ignorance and lack of math skills. Their grasp of economics must come from living on a hippie commune."

And there was this classic piece of Arnold rhetoric, as an explanation for why a rainy day fund is needed: "Many of you probably have a pet. At my house, we have dogs, and I'm the one in charge of feeding them every morning. If I put outa whole week's worth of food, they would eat it all and not have anything to eat for the rest of the week. Dog food, tax revenues -- it's the same thing. Perhaps that's not a good example. Some smart-aleck reporter will say that I compared the legislature to my Labradors. But I love my Labradors."

No, governor, this smart-aleck blogger wouldn't say that. He'd say that you said you love your Labs, and left your feelings about the legislature to the imagination.