California Propositions 22 and 25: “The State Spending Propositions”

From stimulating the economy to reforming the healthcare system, Obamanomics has come under a critical public eye. Our big-name leaders have become big-time spenders. We, the people, have become wary. Such scrutiny of our leaders raises the question: What should government spending look like? At the state level, this is the question addressed by Propositions 22 and 25—“the state spending propositions.”

Prop. 22 is a hot mess of bias and unrefined logic. The premise of Prop. 22 is that funding for local governments, transportation, and redevelopment programs should be protected against state interference. While we all might like to see a helping hand extended toward local government and these specific programs, let’s take a look at the recoil felt by other facets of state government.

Currently, when the state needs additional funding for transportation projects, it issues transportation bonds. When it comes time to buy back the bonds, the state typically uses fuel tax revenue. It just makes sense this way: highway, road, and transit projects are being paid for by those who use them. Prop. 22 would disallow the state from using fuel tax revenue to buy back previously-issued transportation bonds. Instead Prop. 22 would require that the state dig into the General Fund for bond repayment. What this essentially means is that transportation projects—still receiving their original funding from fuel tax revenue—would be grabbing extra state money. It’s no wonder that Prop. 22 is co-sponsored by the California Transit Association (not to be confused with Caltrans, the California Department of Transportation).

But that’s not all Prop. 22 does to limit the state’s availability of funds. Currently, the state is able to—and does—borrow from the fuel tax revenue to fund other government services like public education. “Borrow” is the key word here; the state is required to pay back borrowed funds within three years. Prop. 22, however, would restrict the state’s ability to borrow from fuel tax revenue. The state would be forced to borrow from private markets to balance the budget, or take other measures such as increasing taxes or cutting funding for specific programs. Prop. 22 would also disallow the state from reallocating property tax revenue to areas that need it most. Property tax revenue is distributed among counties, cities, special districts, redevelopment agencies, and schools and community colleges. When necessary, the state can shift around funds from property tax revenue. By revoking the state’s ability to reallocate funds, Prop. 22 would again force the state to use its General Fund when faced with insufficient capital.

Simply put, California needs the flexibility to adapt to changes in the economy. When times are tough, we must determine our priorities and protect those first. California is having a tough time keeping a balanced budget (which it’s required to do) and, according to senatorial estimates, is likely to pass on a $10 billion deficit to next year’s budget. Because the state is supposed to keep a balanced budget, this debt will have to be addressed in the near future. For California citizens, this means increased taxes or decreased program spending. I, for one, would rather see cuts in transportation than education.

Prop. 25 deals with passing the state budget on time. The process for passing the state budget is long and arduous. The governor first submits a proposed budget to the state legislature by January 10. Each house of the legislature—the assembly and the senate—must pass a revised version of the budget with a two-thirds vote by June 15. The legislature then sends the budget back to the governor for approval, and the budget goes into effect July 1, the beginning of the fiscal year. Requirements be damned, the 2010-11 state budget wasn’t passed by the legislature this year until Oct. 8, ending the longest budget impasse in California history.

Prop. 25 attempts to resolve the late budget problem. First, Prop. 25 would lower the legislature voting requirement to pass the budget from a two-thirds supermajority to a simple majority. If the budget still isn’t passed on time, Prop. 25 would hold legislators accountable by withholding their pay for each day beyond June 15 that the budget has not been submitted to the governor.

Though it is well-intentioned, Prop. 25 is in direct conflict with the principle of bipartisanship. Because the budget would only require a majority vote to be passed, the majority party—providing it has more than half of the members of the assembly and senate—could autonomously choose whether or not a budget should pass. The issue here is the power to say “no.” With the current two-thirds supermajority requirement, as long as the minority party accounts for more than a third of the assembly or senate it has the collective power to fail a proposed budget. Under Prop. 25, however, the minority party by definition would not have the power to fail a budget by itself. This means that the majority party could pass a budget without considering the minority party opinion. Unfortunately, this partisan push defeats the good intentions of Prop. 25.

Props. 22 and 25 deal with state spending in very different ways, but are quite similarly flawed. Each comes with its advantages and its drawbacks, and in each case the drawbacks are too significant for the proposition to be justified. We should allow the state to determine its priorities in economic downturns, and we should preserve the compromise brought about through bipartisanship. We should fail Props. 22 and 25.

Facebook Comments

Leave a Reply