May 19 Special Election Wrap-Up

(I’ve been out of town for the past couple of days, and will continue to be through the weekend. Posting will continue to be light.)

So, Propositions 1A-1E were defeated, in thoroughly unsurprising fashion. I don’t have all that much to say, that hasn’t already been said by others, so I’ll just post some links.

It is disappointing to see the continuing fail of the state’s Democratic leadership. I find it shocking that they actually believe that this was a referendum on new taxes, when the revolt on Prop 1A at the state party convention was clearly no such thing. Why assume that the ‘voters’ sided with the Howard Jarvis Taxpayers Association rather than the Courage Campaign, especially when there is evidence to to contrary?

However, despite Democrat’s seeming acquisence to the governor’s Hooverite budget, there is finally a real discussion about the long-term structural reforms needed to get the state back under control. Of course, some people still don’t understand what the hell is going on. The problem is structural, not personal. On that note, an alliance of progressive organizations, including the Courage Campaign, have launched the Declaration of Democracy campaign, calling for a majority vote budget. Go here to support it.

Finally, OC Progressive has the run-down on the effect of the governor’s budget proposal on local police forces. I guess you’re only ‘soft on crime’ if you want sensible sentencing reform.

The LA Times on the May 19 Special Election, Again (Updated)

Faced with polling that shows that voters aren’t buying their last editorial, the Los Angeles Times tries, once again, to convince people to vote yes.

Some voters seem to think that rejecting these measures will send politicians a message. It will. It will tell them that Californians won’t stand for constructive compromise of the sort that Republican state Sen. Dave Cogdill of Modesto and Assemblyman Mike Villines of Clovis sought when they agreed to the deal, and that we’ll grant political points for intransigence but none for actual accomplishment. It will tell them that we are suckers for grandstanding. It will tell them to keep fighting and stay deadlocked.

California must get on a different road, change its political dynamic and perhaps its political structure, but it can do that only if it can move. And to move, voters must pass the ballot measures. There is little point in arguing over the next turn if the discussion takes place in the back seat of a rusted-out hulk.

First off, the entire car metaphor (not quoted), is ridiculous, but for those of you who bothered to follow through to the whole editorial, I’ll play along. The spending cap, prop 1A, is the equivalent of reducing the size of gas tank so we’ll never be able to travel as far while also deciding not to pay for regular maintenance. The car will keep running for a while and will cost less – right until the transmission falls out.

More seriously, passing the ballot propositions won’t actually keep the state running. Prop 1A doesn’t have any effects for 3-4 years. The education funding in Prop 1B is already owed to the schools by the state. Indeed, the California Federation of Teachers has sued the state to get that money. Prop 1c will only help the state if we can find anyone to buy our bonds – a problem we are already having – and with lottery revenues down there isn’t much incentive for potential purchasers. Propositions 1D and 1E just shuffle money around, at the cost of our state’s worst off; and prop 1F has nothing to do with the budget at all.

Even if all of the ballot measures pass, we are still looking at a budget short-fall of $10 billion dollars on May 20th. It would be nice if the LA Times recognized that simple fact. There is no significant up-side to passing these ballot measures, and a considerable cost in future  budget flexibility. Unless, of course, you are a centrism fetishist who cares more about ‘bipartisan compromise’ than actually solving our state’s problems.

Since we’ll still have a budget crisis on May 20, there is no good reason to create a spending cap on May 19. Instead, we need real long-term budget reform, in the form of a return to a simply majority requirement for both the budget and taxes. I agree that the majority vote won’t solve our immediate problem – but neither will Prop 1A. If nothing else, the Times should recognize that if we can afford to put off a majority-vote reform until the present crisis has passed, then surely we can do the same with an ill-conceived and poorly debated spending cap.

Update: The Sacramento Bee has different numbers:

The Republican governor’s Department of Finance has projected a budget gap of $15.4 billion if the May 19 special election ballot measures pass and $21.3 billion if they fail. The state would gain nearly $6 billion in solutions if Propositions 1C, 1D and 1E pass, including $5 billion in 1C’s borrowing against the California Lottery.

May 19 Special Election: Don’t Listen to the LA Times

The Los Angeles Times came out with its endorsements on the May 19 special election. Unfortunately, their decision-making is a little baffling. With regards to Proposition 1A, they see the problem (one I have called government by algorithm) and then draw a truly strange conclusion:

The reserve fund is closely linked to the spending cap, and that gives us pause, because The Times has long objected to hands-free budgeting — decision-making that removes human thinking from the fiscal planning process. But after several decades’ worth of ballot measures that impose formulas to grab cash for education and other favored programs, California finds itself so far down the robo-budgeting road that it may need a bit more automation just to regain its bearings [emphasis added].

I disagree – strongly. Beyond being anti-democratic (with a small ‘d’), more “robo-budgeting” makes the legislature even less accountable to voters. The only way to restore balance to the budgeting process is to make the legislature more accountable to voters. Currently, for example, the 2/3rds rule prevents true accountability because no single party gets the blame or credit for the debacle. Republicans point to the Democratic majority and say “don’t blame us”, while the reverse is equally true. This cultivates a throw-the-bums-out mentality that makes the entire process more toxic and discourages innovation and true reform. The spending cap will complicate this issue. The Times would be better served by opposing Prop 1A and calling for systematic budget process reform, including both the repeal of outstanding robo-budgeting propositions and the 2/3rds rule.

Additionally, the Times completely ignores the increased power given to the Governor to mandate cuts in lean years – a step that further reduces legislative accountability and further distrupts an already unequal balance of powers in Sacramento.

The Times then moves on to Prop 1B, and draws this conclusion:

It’s ostensibly intended to restore $9.3 billion in funding that public schools and community colleges would get in better economic times under Proposition 98 (the granddaddy of ballot-box budgeting measures, passed in 1988 as an attempt to ensure adequate school funding). But in doing so, it could ratchet up the autopilot spending that Gov. Arnold Schwarzenegger says he’s trying to stop. We support better funding for schools, but not by imposing more inflexible formulas [emphasis added].

And yet this is precisely what proposition 1A does! Honestly, their reasoning is not internally consistent. Instead, I suspect they honestly oppose robo-budgeting, but want to appear to be part of the “responsible center” – hence their endorsement of proposition 1A.

The rest of the editorial is more-or-less what you would expect, and, honestly, I don’t care all that much about the remaining propositions. However, on Prop 1C, they make another inconsistent argument. Namely, that it will raise revenue without raising taxes. What it will actually do it raise revenue now at the cost of decreased revenue in the future. Fewer cuts or tax increases now at the cost of cuts or tax increases in the future. This is, of course, exactly what the state does when it borrows, but given declining lottery revenues due to the economy, I’m not so certain we’ll be able to sell its future revenues for nearly as much as the governor things we can. This is not a wise or responsible path.

For a more complete discussion of my opinions on the ballot measures, see this post here. Also take a look at the Calitics endorsements (hint: we more-or-less agree) and the nonpartisan League of Women Voters, who have a very good discussion.

May 19 Special Election: Just Say No

Calitics has announced its endorsements for the ballot propositions on the May 19 special election: no on everything. I agree, and will not duplicate their analysis. I’ve written before on the problem with spending caps (Prop. 1A), but it is worth quoting the League of Women Voters on this issue:

[Prop. 1A] would actually make it more difficult for future governors and legislatures to enact budgets that meet California’s needs and address state priorities. It would amend the state Constitution to dictate restrictions on the use of funds put into the reserve and limit how “unanticipated” revenues can be used in good years. It could lock in a reduced level of public services by not taking proper account of the state’s changing demographics and actual growth in costs. Prop 1A would also give future governors new power to make budget cuts without legislative oversight. Like the other propositions opposed by the League on this ballot, Prop 1A came from a deeply flawed process that resulted in measures written in haste and without public input or analysis. The League would support real budget reform, but we regretfully conclude that this measure would only make things worse. (League of Women Voters)

The only issues where I break a little from the Calitics editorial board is on propositions 1D and 1E. As a rule, I am generally opposed to dedicated tax increases tied to specific spending. With the exception of sin and consumption taxes tied to related issues (carbon taxes for climate change, alcohol/tobacco taxes for health care), I feel that such arrangements strip flexibility from the legislature and prevent reasonable shifts in government priorities. They distort the budget process just as Prop 13 does, if not to the same extent. However, the issue of dedicated taxes should be addressed as part of comprehensive budgetary reform, and not as a part of a crazy budget work-around. So, I come to the same conclusion: no on Props. 1D and 1E.

With it increasingly clear that this budget will not be sufficient even if all of the ballot propositions pass, there is no reason to pass them at all. We cannot be held more hostage than we already are.