Statewide June Election Could Make Things Worse

by Paul Hogarth on February 3, 2009

With the state bankrupt and giving I.O.U.’s instead of tax refunds, the California legislature is expected to vote on a mid-year budget later this week. It’s bound to have horrific cuts, but no one has details because it’s being crafted in secret negotiations with the “Big Five” (Governor + party leaders in each chamber.) Democrats control 63% of the legislature, but the “two-thirds rule” lets Republicans run the show. And the minority refuses to vote for a single tax increase – unless Democrats agree to kill the eight-hour workday (and other similar extortions.) Everyone thinks a statewide special election is inevitable, which could help us get meaningful budget reform. But June 2nd would be a terrible time to do it, because none of the needed fiscal reforms would be on the ballot. Instead, we’d have the Governor’s awful proposal to borrow money off future lottery revenue – and a deeply insidious proposal to cap state spending. While San Francisco has no choice but to call a June special election (or else cut half of its General Fund), the state musn’t go full speed ahead.

After writing a piece last week that argued the need for California voters to approve budget reforms, I developed a weird sense of dread that my article was written in vain. Of course we must abolish the “two-thirds rule” so the state can pass a sane budget, and the political mood is ripe for some fiscal reforms that would save local government. But op-ed pieces alone don’t put good things on the ballot, and the fact we may have a statewide special election soon doesn’t guarantee voters will get the chance to weigh in on these ideas.

To place an amendment on the California ballot, you either need (a) a two-thirds vote of the state legislature, or (b) a petition with 700,000 valid signatures, i.e. eight percent of how many voted in the last gubernatorial election. Placing an initiative statute – such as restoring the upper-income tax bracket – would require 430,000 signatures, or 5% of the last turnout. The first option isn’t likely (why would two-thirds of the legislature vote to scrap the “two-thirds” rule?), so the realistic approach is to start collecting signatures.

Democrats have submitted an initiative to lower the threshold to pass the state budget from two-thirds to a 55% majority, and are in the process of gathering signatures. But if we have a June special election, voters still won’t have the opportunity to pass it. Because in order for ballot initiatives to qualify for an election, all signatures must be turned in 131 days beforehand – and June 2nd is 120 days away. Our only hope to have this passed is to delay any statewide special election until August, or possibly even into November.

As for other budget reforms that are desperately needed (and politically winnable among voters), no one has even started collecting signatures for them yet. Progressive activists must file these initiatives with the Attorney General’s Office for review immediately – so that we can start the expensive and time-consuming process of gathering nearly a million signatures. Otherwise, they won’t be on the statewide special election – and it will all be academic.

What initiatives would we expect to see on a June 2nd statewide special election? According to the Secretary of State’s Office, four propositions have already qualified. Two are budget related, and both would make the fiscal crisis worse. One is Arnold Schwarzenegger’s idea to borrow money from the state’s future lottery revenues – which would sink us even further into debt. But a recent poll has voters not liking it, so hopefully it would go down in flames.

The second proposal – however – is far more dangerous, because the same poll showed 70% of respondents calling it a “good idea.” Authored by State Senator Roy Ashburn (a Central Valley Republican), it would impose a mandatory state spending cap – putting California in a fiscal straitjacket that would render us impotent at addressing our needs.

Spending caps have been tried elsewhere. Colorado passed a spending cap in 1992, and the disastrous results include: (a) teacher salaries plummeted from 30th to 50th in the nation; (b) children receiving full vaccinations fell from 24th to 50th; (c) and low-income adults with health insurance dropped from 20th to 48th. “By creating a permanent revenue shortage,” said the Center on Budget and Policy Priorities, a spending cap “pits state programs and services against each other for survival each year and virtually rules out any new initiatives to address unmet or emerging needs.”

An analysis by the California Budget Project projects that, if voters approve a Republican spending cap, the state would have to cut $40 billion a year – “eliminating all General Fund support for higher education; the judiciary; child support services; health care services; resources – including fire protection; and environmental protection.” This is no accident. The sponsors’ true intentions are simply to starve the public sector, shrinking the size of government (as their mentor famously said) so we can “drown it in the bathtub.”

But that’s the reality we would face with a June 2nd statewide special election. Voters like the idea of restricting how much the government can spend, knowing we are in bad budget times and sacrifices must be made. It won’t be impossible to defeat this proposal, but we’ll have to work hard (and devote a lot of resources) to educating voters about its dire consequences. And it will be far more difficult, and quite infuriating, if there are no sensible alternatives on the same ballot – while everyone is asking for solutions.

A statewide special election makes no sense – unless progressives can also qualify their own budget reforms (eliminate the “two-thirds rule”; restore the upper-class tax bracket; amend Prop 13 to exempt commercial property; amend Prop 218.) But going full speed ahead doesn’t give us that opportunity. It only poses the risk of doing more harm than good – and we can’t afford to screw it up.

The same, however, cannot be said about San Francisco’s independent effort to hold a special election on June 2nd. Facing a $576 million deficit that could mean cutting half its General Fund, the Supervisors have no choice today but to move ahead. While the City has its own fiscal straitjacket that will hamper its ability to raise revenue, we don’t have the luxury of time to make sure the state can fix its own house in order. We’ll have to walk alone for now.

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