Mulling a majority-vote budget

JULY 6, 2010

By JOHN SEILER

With yet another state budget not passed by the July 1 beginning of the fiscal year, Democrats and their union allies are putting the blame on California’s two-thirds supermajority rule for passing a budget in the Legislature. As commonly happens in recent years, the Republican minority in each house of the Legislature has just enough votes to hold up a budget by opposing Democratic-sponsored tax increases.

In some years, Republicans stay solid and prevent tax increases. In other years, such as 2009 and 1991, enough Republicans break ranks to pass a tax-increase budget. This year, it’s too early to tell whether last year’s pattern will be repeated. Much depends on if Gov. Arnold Schwarzenegger, as last year, himself backs tax increases, then pressures several fellow Republicans to go along with him.

To get beyond the impasse, this fall voters will decide the fate of Proposition 25, the Passing the Budget on Time Act, which institutes a majority-vote budget. It’s already being supported by the California Teachers Association.

But what would happen if it did pass? Would that make it easier to raise taxes, as supporters hope? What would happen if taxes were increased so easily? Would Democrats, without having to worry about Republicans in the Legislature, massively increase taxes?

To find out, I researched how things work in Massachusetts. Also a heavily Democratic state, its budget can be passed with only a majority vote. Republicans are close to irrelevant in the Legislature; but, like here, the GOP is able to elect moderates as governor, the most recent being Mitt Romney from 2003 to 2006.

“We have passed tax increases recently on business, and last year we increased the sales tax by 25 percent,” Steve Poftak told me; he’s Director of Research and Director of the Shamie Center for Better Government at the Pioneer Institute for Public Policy Research in Boston. He also was the commonwealth’s Executive Office for Administration and Finance.

At 6.25 percent, the state’s sales tax still remains lower than California’s rates of 8.25 percent to 10.25 percent, depending on county levies. Like California’s Proposition 13, Massachusetts has a limit on property tax increases, there called Proposition 2½. However, Poftak told me that initiatives in Massachusetts only can limit local taxes. At the state level, tax-limitation measures can be amended by the Legislature — that is, effectively ignored.

As in California, one check on tax increases is the governor’s veto. But with only a majority vote needed in Massachusetts, such a veto is much less of a threat. In California, it has been three decades since a governor’s veto was successfully overridden, on the budget or anything.

As in California, Poftak said that public-employee unions are “extremely powerful.” Yet, even in Massachusetts, “there are some union leaders who take a more strategic view, looking at how this works in the long term” concerning taxes, expenditures, and public employee salaries and benefits. He said that, in his state, the major concern now is runaway health insurance costs for public employees. “At least some union leaders see that this can’t continue indefinitely.”

“Taxachusetts”

Contrary to its image as “Taxachusetts” and its recent tax increases, Massachusetts remains at the low-end of the group of states with high taxes. “We’re about 10 positions better than people perceive us to be,” Poftak observed.

Its top income tax rate is 5.3 percent, compared to 10.55 percent in California, 11 percent in Hawaii, 7.85 percent in Minnesota and 8.97 percent in New York.

According to the 2010 ALEC-Laffer Economic Competitiveness Index, Massachusetts ranked 32 of the 50 states, about middling. By contrast, California ranked 46th, among the “States That Do Everything Wrong,” according to ALEC-Laffer, as I noted in a recent article on CalWatchDog.com.

Yet Massachusetts’ ranking has fallen in recent years, from 22nd in the ALEC-Laffer score as recently as 2008. Poftak said that the state has raised corporate taxes seven consecutive years in a row, “whether under a Republican or Democrat.” The Republican governor was Romney. Today, Massachusetts’ top corporate income tax rate is 9.5 percent, 44th most burdensome in the country. California’s is a little better, 8.84 percent, ranking 38th worst.

Boston Tea Party II

Even though Massachusetts’ state government is dominated by Democrats, the voters have the final say. One limitation on tax increases is “that people here are very angry, just as they are everywhere,” Barbara Anderson told me; she heads Citizens for Limited Taxation, a Massachusetts group that calls itself “the Voice of Massachusetts Taxpayers.” Slogan: “Every Tax Is a Pay Cut…A Tax Cut Is a Pay Raise.”

She said state taxpayers are especially mad at the the Legislature for ignoring the voters’ will when Question 4 was passed in 2000, rolling the state income tax of 5.95 percent, in increments, down to 5 percent. Instead, the tax was frozen at 5.3 percent.

She said the Libertarians in the state even have tried to pass an initiative to entirely repeal the state income tax with Question 1 in 2008. It lost, but still garnered 30 percent in a very liberal state.

Her group has a political action committee which, she said, is targeting 50 state legislators who voted to freeze the tax cut. “We’re expecting a revolution on Nov. 2,” she said. “Even if you throw out only a few of them, the rest will get the message. Since they threw out the initiative [Question 4], we have decided that we have to change them first.”

A big problem, she said, is that “in the past, we always had fiscally conservative Democrats to work with Republicans. But we have not had many of them in recent years. I would expect that, if some Republicans win in November, some conservative Democrats will start speaking up.”

John Seiler, an editorial writer with The Orange County Register for 19 years, is a reporter and analyst for CalWatchDog.com. His email: [email protected].

The Voice of Massachusetts Taxpayers

20 comments

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  1. Tylerle13
    Tylerle13 6 July, 2010, 12:55

    California is way too polarized to just have a simple majority for budget & tax issues. With just a simple majority required in California, you are never going to have a consistant environment since the years that republicans have a majority, there will be massive cuts to social programs in order to avoid tax increases, then in years the Dems are in power there will be huge increases in taxes to fund more and more social programs.

    Voters will get pissed off with the party in power every couple of years, then shift power to the other side. They will get mad when the social services keep getting cut, then when their taxes go up to fund those social services they will get mad again and vote the other way.

    If they would reduce the amount of government programs down to the more neccessary programs, and audit those programs to get rid of the fraud on the consumer side and the waste & redundance on the government side, we would not have the problems that we have now. If the proposal of a tax increase was a rare occurance, and was neccessary to fund something that was almost universally viewed as a vital program, then there would be more people willing to meet in the middle and compromise on those issues. Right now, there are way too many programs that are either flooded with fraud & abuse or they are just pointless programs, so when there are multiple tax increases proposed every single year, you are going to have a much more difficult time getting people to support it.

    We need to keep the 2/3 majority in place and have a legitimate audit of all of our state funded social programs to determine which ones are neccessary and which ones are a complete waste of tax money. If people believe their money is going to fund mostly pork programs & pet projects, you are going to have a much more difficult time convincing people to give up more of their money, especially when they know you are just going to come back and ask for even more the next year.

    Reply this comment
  2. StevefromSacto
    StevefromSacto 6 July, 2010, 14:50

    Tell you what, I’ll drop my opposition to ending the 2/3rds requirement when the Repubs drop their no taxes pledge.

    Reply this comment
  3. StevefromSacto
    StevefromSacto 6 July, 2010, 14:53

    And one more thing. If we’re going to audit all social programs, let’s have a legitimate audit and public airing of all tax breaks. Let’s find out which breaks are absolutely vital and which can be postponed or eliminated during this budget crisis. That’s the fair and equitable thing to do. But I’m not holding my breath.

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  4. John Seiler
    John Seiler Author 6 July, 2010, 20:54

    StevefromSacto: Republicans don’t have a “no new taxes pledge.” Some do and some don’t. And some that do, like Maldonado, betray that pledge and stab taxpayers in the back.

    Reply this comment
  5. Tylerle13
    Tylerle13 7 July, 2010, 07:38

    I have no problem with that. Some of them are in place to help keep prices of certain things lower in order to increase business activity in every other sectors, so you might want to go all the way down the food chain to figure out whether each tax break is a net gain or loss for the state. There are also some that are in place because the people in charge of those companies bet on the right political horse and their bet paid off in the form of tax breaks, and I have no problem with those being repealed.

    And like I said, if the proposed tax increases were a rare occurance that were only used in an absolute emergency, and were only neccessary to fund programs that everyone agrees with, there would be no problem getting 2/3 of people to go along with it. The Reps in Sac have cried wolf too many times, so nobody trusts them when they say they need to raise taxes. They come and ask for more money before the “Temporary” taxes from last years budget have even expired, then they blow it all on pet projects and pork. Nobody wants to sacrafice another couple percent of the little money we make just so some termed out state representative can have their name on a Library or Multi-Cultural facility in their district.

    Reply this comment
  6. Fred Mangels
    Fred Mangels 7 July, 2010, 08:33

    Tyler wrote,“…you are never going to have a consistant environment since the years that republicans have a majority, there will be massive cuts to social programs in order to avoid tax increases, then in years the Dems are in power there will be huge increases in taxes to fund more and more social programs.”

    The Democrats have held the majority in the state legislature for decades now. I don’t see any sign that is going to change. As much as we hear of voters being pissed off with our state legislators, they nearly always re- elect them.

    Reply this comment
  7. Tylerle13
    Tylerle13 7 July, 2010, 08:44

    And that probably has a lot to do with the fact that our taxes are some of the worst in the nation, our pensions are out of control, and our social programs are black holes for tax money.

    The reason the same kind of people are continuously sent back to Sac has a lot to do with the fact that most of the districts are “safe districts”. They have gerrymandered the district lines so bad that it is damn near impossible to get rid of representatives, no matter how bad they are. Look at Pat Wiggins. That lady is bat s*** crazy and she is still being allowed to cast votes that effect the future of our state.

    Eliminating the 2/3 requirement would be in the top 5 worst thing that have ever happened to california.

    Reply this comment
  8. David
    David 7 July, 2010, 13:23

    John Seiler and tylerle13: let me see if I understand your position here. You are opposed to democracy, because you fear the people will do something you don’t like. So you want a small minority — as few as 14 out of 120 legislators — to have absolute veto power over the actions of the government. Is that about it?

    Reply this comment
  9. Tylerle13
    Tylerle13 7 July, 2010, 13:48

    Not what I said.

    I said that it is not in the best interest of the state to be eliminating then recreating programs every couple of years. If this state went from a 2/3 requirement to a simple majority, most of our legislators time would be spent repealing or reimplementing the same regulations & programs that they didnt agree with when they were on the minority side.

    Our legislators need to realize that the taxpayers arnt just an ATM that they can keep going back to whenever they fall in love with a new pet project. If there was not so many wasteful social programs, they wouldnt need to ask for more tax money so frequently and in the rare occurances that they did ask, they wouldnt meet so much resistance because people would support what the money is going towards.

    The fact that the state has added to the amount of people that they employ, yet they are coming to us for more tax increases before the increases from last year have even expired, shows us that they are not making the same sacrafices that we are being forced to make.

    Reply this comment
  10. David
    David 7 July, 2010, 14:54

    So because of your fear that legislatures might want to do different things in different years, you want a tiny minority, as small as 14 out of 120, to have total veto power over the budget. That’s not democracy. The founders are rolling over in their graves. Having different majorities do different things is called “representative self-government”. It would be nice for CA to try it.

    Reply this comment
  11. StevefromSacto
    StevefromSacto 7 July, 2010, 15:04

    Welcome, David. It’s kind of lonely here on the moderate side. Nice to have you aboard.

    As to CalWatchDog’s comment, other than Maldonado and possibly Roger Niello, please tell me which other legislative Republicans have NOT signed the no tax pledge.

    Reply this comment
  12. Tylerle13
    Tylerle13 7 July, 2010, 16:10

    Once again, not what i said. Having them waste time enacting & canceling out worthless pet projects is a waste of both time & money that could be used in a much better way. I am not against government, i am against government waste. They already get away with passing staggering amounts of pork with a 2/3 requirement. We have some of the highest taxes in the nation and we still have a $20 billion deficit. Letting them levy taxes easier sure isnt the answer. The fact that we would be starting at a 10% income tax, a 10% sales tax, an extra car tax & registration fees, bs CRV tax, gas tax, a tax whenever we buy electronics, and all the other hidden taxes, then we will be going up from there is a little bit frightening.

    What makes you think things would be better if the veto power was in the hands of 19 people instead of 14?

    Reply this comment
  13. David
    David 7 July, 2010, 17:04

    I think things would be better with a majority-vote budget because it would be more likely that the will of a majority of the people would govern, instead of the power of a tiny minority. I fully understand that majorities sometimes will do things I don’t like. So be it. If I can’t persuade a majority of my fellow citizens, I deserve to lose. But so do conservatives. Instead they take refuge in the 2/3 rule, which is cheating pure and simple: the 2/3 rule was passed by a simple majority. It didn’t even get 2/3 itself. So you have taken away my right to self-government. And I want it back.

    Reply this comment
  14. Tylerle13
    Tylerle13 7 July, 2010, 17:45

    You are assuming that the politicians in sacramento are always doing what they promised in their campaign speeches & what the majority of the people in their districts want. Unfortunately that is not the case. Most of them just vote in lock step with their party or tow the line for the largest campaign contributers. Very rarely are they considering what their constituants want.

    In their first term they just keep a low profile on hot button issues & scream really loud if they direct some pork to their district, so they can get elected to a 2nd term. One they are termed out they really couldnt care less what their constituants say since they are no longer useful to their political career. They will most likely be trying for a statewide or national position if they have any political value left, and as long as they made the party bosses & some big campaign contributers happy, they dont need to worry too much about a few little people that may be pissed in their home district. If they cant latch on to another position in politics, they can just take their pension & benefits and go home happy.

    They take a portion of my right to pursue happiness from me every week on payday, and at the store, and at DMV, and at the gas pump, etc. Hell, thats supposed to be a God given right too! I dont think our wonderful politicians in Sacramento plan on giving back either of those rights anytime soon buddy. We can always hope though!

    Reply this comment
  15. David
    David 7 July, 2010, 18:07

    Tylerle13, I wonder how far your alienation from representative government really goes. Since you support the 2/3 rules, why not a 4/5 rule, or a 9/10 rule? After all, why should 67% of legislators be able to raise your taxes? Shouldn’t it take at least a 90% vote? How about 100%? Why not a unanimous vote of everyone in California before anyone’s taxes can be raised?

    Heck, why even have an elected government at all? Would it be okay with you to abolish elected offices altogether, and have a king or an emperor, as long as it meant your taxes would go down? Since you already are denying your fellow citizens the right to majority rule, why not take it all the way?

    Reply this comment
  16. Tylerle13
    Tylerle13 7 July, 2010, 18:55

    Like i said, if it was truley representative, that would be great, but there are very few people in sacramento right now that listen to their constituants.

    If it was truley supposed to be a representative government, they would have political districts that are a true representation of a geographic area. They wouldnt have these districts carved and manipulated in ways that make no geographic sense, just to ensure they get a high percentage of one specific party so they have a “safe” district. If it was truley a representative government, then why would the politicians (many of which happen to be in safe districts) be funding a proposition to overturn an initiative that would have the districts redrawn? That initiative was one passed by the voters of California, and is an accurate representation of the will of the people, but the politicians are trying to circumvent the will of the people in order to preserve their current system of guarenteed seats. That sounds like they have a stacked deck and they want to keep it that way. That doesnt sound like they want to give people the ability to truley govern themselves.

    Most of the stuff they vote on is only a simple majority anyway, the 2/3 rule is just for taxes and the budget. It was a majority of voters that chose to add the 2/3 requirement, so why is a majority opinion in this instance not good enough for you? The representatives lost the trust of the voters, so the voters had to add a safeguard into our taxing & spending policies to ensure that they didnt continue to abuse the taxpayers.

    Reply this comment
  17. David
    David 7 July, 2010, 21:28

    I can’t help but notice that you didn’t answer my question about whether it would be okay with you to have a king or an emperor, as long as they didn’t raise your taxes. What do you say about that?

    Do you personally know any state legislators? They are not quite the evil, selfish people you suggest. Some are better than others, but many are sincere, dedicated people who work quite hard to listen to the people of their districts, and do what they think is in the long-term best interest of the state.

    I am baffled as to why you think that when the people adopted a redistricting commission, that was the will of the people, but if the people were to adopt a different system, that would be “circumventing” the will of the people. People are allowed to change their minds, aren’t they? If you think having districts drawn by a commission is a good idea, fine; but it makes no sense to argue that once people adopt a commission, they can never change their minds about it. Prop 11 was approved by 50.8% to 49.2%. It was hardly a giant mandate.

    As for why it is unfair for rules imposing supermajorities to be adopted by simple majorities, I would just ask if you think it would be fair if 51% voted to double your taxes, and also require a 2/3 vote to lower them in the future. Would that process be okay with you? What if 51% were to abolish the redistricting commission, and require a 2/3 vote to ever adopt one again? I doubt that would be okay with you. And indeed it would be unfair. But it is equally unfair for any other supermajority requirement to be adopted by a simple majority vote. It is the theft of democracy, and California should stop it.

    Reply this comment
  18. Tylerle13
    Tylerle13 7 July, 2010, 22:25

    As long as I am the one who is named king, that would be perfectly fine, but then i would have to tax the hell out of the rest of you to pay for a bunch of sweet robes and some royal palaces. You know better than that. I dont believe 1 person is able to decide what is best for a large number of people. I think a small enough group can be easily manipulated or corrupted, which is why i have no problem with people voting in safe guards to protect themselves from that.

    I dont believe all politicians are that bad, but i believe enough well meaning people start off with the best of intentions, then they get to Sacramento and realize they can either stick with their principles and be ineffective, or play the game and atleast get some of what they want out of their time there, so they are forced to compromise their beliefs.

    If the majority of Voters vote for something, the so be it. The fact that the voters will vote a safeguard into law, then the politicians will turn around and put it right back on the ballot is ridiculous. They are basically telling the voters that they are stupid and they dont know what they are doing. The legislators have their chance to make rules, if they fail to do it or if they are abusing their power, the people will step in and do it themselves. The legislators shouldnt be resubmitting petitions to contradict what the voters just decided on.

    The fact that there is a substantial amount of voters do not end up paying any income taxes kind of skews the game against those people that do pay taxes. If someone is given the option to increase the taxes on someone else in order to provide themself with something for free, they are going to vote for that tax. In order for that kind of tax to go through, you would need well under half of thevpeople who actually have to pay that tax to vote in favor of it, if a simply majority is all that is required. That means there is not a fair representation given to the people who are the ones who have money at stake. And no, i am not saying that low income people shouldnt be able to vote, so no trying to put words in my mouth. It would just be easier to argue for a simple majority if everyone had an equal proportion of money at stake. People are going to be much more generous in distributing money that belongs to someone else, especially when it will benefit them in some way.

    The 2/3 requirement just ensures that the minority group is not completely ignored during the rule making process since they are also going to be living by those rules. All it does is force some cooperation & concessions between parties instead of just a party line vote every time.

    Reply this comment
  19. David
    David 8 July, 2010, 07:38

    Your statement about money is telling. You aren’t quite willing to say that poorer people should be unable to vote, but you have no problem with making their votes unequal, through the 2/3 rules. I guess that makes sense to those who believe that people with less money do not deserve the same rights of citizenship that the rich have, and that it is okay to artificially suppress their will by law, by denying them majority rule.

    It’s interesting that you believe supermajorities can be imposed by simple majority vote, but think that taxes should only be raised by vote of the people who would directly pay that tax. By extension, I suppose only people who smoke should decide whether there is a tax on cigarettes, and only people who drink should decide if there is a tax on alcoholic beverages.

    It seems to me you are happy to write procedural rules that will produce the policy results you want, instead of adopting neutral rules, and letting the consequences be the consequences. Ironically, this is the same charge you make about redistricting. Your devotion to neutral process seems to vary by whether it benefits you.

    Reply this comment
  20. Tylerle13
    Tylerle13 8 July, 2010, 08:56

    Like I said before, I am not suggesting that Low-income people have any less rights. In that case, I would be stripping myself of rights, because I sure as hell dont make enough money to be lumped in the high tax brackets. With the broken tax system that we have, where only half of the people are paying income taxes and almost half of the people are receiving some sort of government benefit, you are going to end up with half of the people voting on what to do with other peoples money.

    Let me put it this way, if you go out to a nice dinner with a group of 6 people, do you think the 3 people that plan on ordering Steak & Lobster should be able to determine that the entire group is splitting the bill equally? Should the people that just order a salad & water be forced to subsidize the Steak & Lobster of the other people, even though they are not eating that food? Do you think the people would have ordered the Steak & Lobster if they were under the impression that they would have to pay for the entire thing instead of the other people at the table being forced to pay for part of it?

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