What if Props 1A-1F fail?

Calitics is pretty excited. Polling, most recently from SurveyUSA, shows that a series of amendments meant to solve this year’s California budget crisis are likely to fail. All get less than 50% support, with only one seeing less than 50% opposition (and a lot of undecideds, obviously).

In the abstract, I’m glad. The problem in Sacramento is twofold. First, property taxes are capped in ways that have progressively starved the state over the last 30 years. That means you have to raise taxes every year in order to simply keep up with inflation and population growth. Which brings us to the second problem: you need a 2/3 majority to get a tax hike. And slightly more than a third of the legislature is Republican. The California Republican party is no big tent. The wingnuts have used primaries to install anti-government zealots in every seat they can, and Democrats picked up any seat that wouldn’t elect a wingnut. So Republicans vote as a bloc to oppose any tax increase, and then turn around and complain that the schools/hospitals/emergency response/roads stink. These propositions were cobbled together as a way to get enough revenue to keep California from simply declaring bankruptcy, laying off thousands of teachers, and shuttering firehouses as fire season heats up.

The danger of not passing these things is obvious. We need teachers. We need firefighters. We need hospitals. We need a budget. And proponents insist that this is the only way to get a budget.

The problem is, the more I read about these things, the less I like them. Prop 1F blocks cost of living pay increases for legislators and various random officials when the budget isn’t balanced. This doesn’t save enough money to matter, and it assumes that the our politicians are so venal that they’ll drop their deeply-held disagreements about how to fund the state simply to get a fistful of dollars. If this is presented as an actual solution to anything, it’s an insult to voters, and if it’s just meant as a punitive measure, why are we wasting time on it.

Another measure (1C) would let the state borrow against lottery revenue. They promise that the money they’re borrowing against will still get sent to education, but it’s a gamble on a gamble, and that sort of financial idiocy is what got Wall Street into its current troubles. No thanks.

Two of the propositions (1D and 1E) would divert funds currently dedicated to early childhood programs and to mental health toward general expenditures. This is not a permanent solution, needless to say, and I’m not inclined to screw kids and the mentally ill just to placate wingnut Republicans.

Prop 1B would settle a dispute over whether the governator has been diverting funds dedicated to education. If it passes, and if Prop 1A passes, the education community’s reading wins out.

Prop 1A shackles the state government to a stupid regression-based budget cap. Stupid because it caps spending based on the previous year’s budget adjusted for population growth and inflation. Any revenues gathered beyond that cap would be allocated to a rainy day fund that would be harder to raid than the current one. First, this actively discourages any spending reduction, since that would forever hobble the state’s spending. Second, it ties budget increases to statewide inflation, not to statewide inflation in the fields government spends money. In recent years, for example, the cost of health care has increased very rapidly, and healthcare is a big part of the state’s expenses. Third, the economy is cyclical, and government spending is most effective when it is countercyclical. In good times, the government should be able to reduce spending and then raise spending in later years. This doesn’t encourage that behavior. It encourages bad policy, and is based on bad policy assumptions.

Pete Rates The Propositions is a generally reliable source on such things, but his take on 1A is silly, and his support for it seems to violate the very sensible principles he applies elsewhere. In general, he argues against imposing a straitjacket on funding, embedding today’s spending priorities in the constitution. Indeed, that’s why he supports 1D&E, and why he opposes 1B. Of 1B, he writes: “Prop 1B is budgeting by ballot box, and that’s dangerous. Because when you vote for an earmark like this, you’re also voting to withhold that money from everything else the state could fund, since the state must balance its budget on limited income.”

In the case of 1A, not only are spending priorities embedded in the constitution, but total spending is limited by a formula guaranteed to strangle spending on a growing part of the state budget, ultimately hobbling the government. If 1B is dangerous, 1A is juggling dirty needles.

I mentioned two problems with creating a budget in California, and this addresses neither. Nor does it do anything to address a third problem, the proliferation of amendments earmarking funds to specific purposes. When the budget can grow arbitrarily large, such earmarks are unwise but not onerous. But when you cap the budget, the legislature has start by fulfilling any number of ill-considered propositions carving out unalterable amounts of money for worthwhile projects, and then fund everything else out of the shrinking pile of leftovers. If that isn’t “budgeting by ballot box,” I don’t know what is.

Pete addresses the objection that “it imposes an effective spending limit for most programs, and the list of programs exempt from the spending limit is arbitrary and permanent.” The response? “The spending limit is the point of the whole proposition.” Exactly. It’s a bad idea, bad policy, and should be voted down.

And here’s my problem. I don’t know what happens then. The proponents of 1A-F insist that, if they fail, teachers, firefighters, and nurses will all be laid off. And that might be true. It’d be a disaster.

Is it a bluff? Will a few Republicans take their lithium and vote for a sane budget that raises taxes enough to get us through tough times? Or will they burn the joint down for the insurance money?

Comments

  1. #1 Evil Bender
    May 13, 2009

    Or will they burn the joint down for the insurance money?

    That one, I think. Republican strategy across the country seems to be to obstruct, hope everything goes to hell, and then blame Democrats. They’re betting everything that, so long as bad things happen on the other guy’s watch, they look good.

    This is a silly assumption, and obviously terrible news for their constituents, but all indications are this is there plan.

  2. #2 Moderately Unbalanced Squid
    May 13, 2009

    “Two of the propositions (1D and 1E) would divert funds currently dedicated to early childhood programs and to mental health toward general expenditures. This is not a permanent solution, needless to say, and I’m not inclined to screw kids and the mentally ill just to placate wingnut Republicans.”

    On the other hand, as was pointed out during yesterday’s Forum on KQED, the props jeopardize 45 cents of every dollar for these programs, and not passing them jeopardizes the other 55 cents of every dollar. It’s like some bizarre financial Sophie’s choice.

  3. #3 Josh in California
    May 13, 2009

    The proponents of 1A-F insist that, if they fail, teachers, firefighters, and nurses will all be laid off. And that might be true. It’d be a disaster.

    I’m still trying to figure that one out. I haven’t read the full text of the propositions yet, but the summaries said that they were cutting spending on education, etc. I’m not seeing how cutting the budget for education is going to prevent teachers from being laid off.

  4. #4 Angry Voter
    May 14, 2009

    I’m tired of being a Tax/Wage Slave to the government.

    Roads are crap… Can’t see anything government is doing for me, except robbing me blind! GOVERNMENT, you filty theives, quit stealing my finances, freedom & future! Go broke for all I care!

    NO MORE TAXES!!!! No on Props 1A-F!

  5. #5 Hate the government
    May 14, 2009

    If the government spent tax collections wisely, I would go along with them. But they don’t so I won’t. No on all propositions.

  6. #6 Julie
    May 19, 2009

    There’s no easy answer. But to blame it ALL on Republicans doesn’t fly. What about the unions? Bullying government/businesses to spend money they don’t have? I see no mention of those issues here.

  7. #7 Josh Rosenau
    May 19, 2009

    I’m not entirely sure how this relates to the legislature or the budget. Unions don’t vote on the budget. Democrats voted to create a balanced budget that provided essential services by raising taxes. Republicans voted against it, knowing that the result would be further cuts, most prominently in education, health care, and public safety. Where do you see the unions fitting into that?

  8. #8 anonymous
    June 2, 2009

    @7 well, duh – if they all worked for free, less money would be needed to pay for the essential services.

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