25: Scariest Prop On The Ballot

NOV. 1, 2010

While the rest of the nation is about to enjoy a much-needed corrective to President Barack Obama’s big-government fright fest, Californians can expect election results that range from disappointing to depressing. Perhaps it’s fitting that Election Day this year comes during Halloween week.

There are scary candidates on the ballot. We’ve got the prospect that Jerry Brown —- the man most responsible for gumming up the state’s infrastructure thanks to his “small-is-beautiful” approach during his first governorship, and who will bet our economic future on a “Green Jobs” fantasy —- will take over as the head of our state. Meg Whitman is fading, a reflection of her principle-lacking positions and the perception that she is a just a billionaire trying to buy an election.

The lieutenant governorship may go to Gavin Newsom, the San Francisco mayor who simply defied the state’s law on same-sex marriages. I couldn’t care less about gay marriage, but there’s something wrong with a mayor picking and choosing which state laws to follow. His Republican alternative, Abel Maldonado, is best known for his support for tax increases. If he wins, he will position himself as the voice of the state Republican Party, which is worse than a B-rate slasher flick.

On the initiative side, there are other harrowing choices: Proposition 22 would give the state’s ham-fisted redevelopment agencies a permanent hand in the till; Proposition 27 would undermine redistricting reform, thereby allowing politicians to go back to the old way of picking their own voters to assure safe seats. There’s good stuff, but most of those items are down in the polls.

But nothing on Tuesday’s ballot is scarier than Proposition 25. “Every year, budget gridlock and political games hurt schools, threaten vital services and cost taxpayers millions. Prop 25 reforms this broken system, holding legislators accountable when they fail to pass the budget on time,” argues the YES on 25 website. They resolve that problem by eliminating Proposition 13’s requirement for a two-thirds legislative vote majority to pass budgets and replacing it with a simple majority of the Legislature. The initiative would dock the pay of legislators who fail to pass a budget, but that’s populist window-dressing.

If passed, Prop. 25 means that the same Democrats who view tax increases and government expansion as the answers to every problem can go ahead and pass their budgets without input from the Republican minority.

There’s a reason the “Yes” side is funded almost entirely by the public employee unions and the Democratic Party. Under the current situation, even though Republicans have a minority of members, they are able to extract concessions for budget passage. Imagine this new world with Brown as governor.

Debate centers on what Prop. 25 means for tax increases. One has to be naive to think the backers of this initiative are driven by their desire to end budget delays. The unions’ goal is to get more money from taxpayers to fund their programs and priorities. To win support, they claim the initiative will not affect the two-thirds legislative vote requirement to hike taxes. As the Legislative Analyst’s Office explains, “the measure states that its intent is not to change the existing two-thirds vote requirement regarding state taxes.”

But opponents argue that once passed, taxes will soar. They make persuasive technical arguments.

First, the initiative creates a new type of bill that would be defined in the constitution as follows: “bills providing for appropriations related to the budget bill,” and such bills may be passed by a simple majority. Prop. 25 foes argue that there’s nothing keeping an appropriation bill from including a tax increase, which could then be approved by a majority vote.

Second, they point to the direct language of the initiative: “Notwithstanding any other provision of law or of this Constitution, the budget bill and other bills providing for appropriations related to the budget bill may be passed by … a majority of the membership.”

The first 10 words suggest this initiative supersedes Prop. 13 and all other provisions of law as related to these specific types of bills, thereby, arguably, allowing tax hikes if they are part of a budget package. So while stand-alone tax increase bills —- i.e., an effort to raise taxes on oil companies —- would clearly still require a two-thirds vote majority, Prop. 25 foes argue that budget-related bills that have tax increases hidden within them would only require a simple-majority vote. They say Prop. 25 drafters could have placed language in the actual measure —- and not just in the summary —- warding off tax increases, but chose not to do so.

Once the measure passes, expect the supporters, who now insist that Prop. 25 does not apply to tax increases, and opponents, who argue the reverse, to switch sides. The initiative’s backers will insist that, yes, tax increases are allowed under the proposition —- just look at what the bill’s opponents said during the election. Anti-tax activists will then insist that the courts uphold the intent stated by Prop. 25’s backers.

Even if these worries are for naught and tax increases are still held to a supermajority vote standard, I foresee this scenario: The Democratic Legislature votes for a $100 million budget even though it’s clear that revenue will only be $85 billion. That brings on a constitutional crisis —- as the state budget comes into conflict with the tax-increase restriction. States aren’t allowed to run a deficit, but the constitutionally approved budget is $15 billion off the mark and the state cannot muster the sufficient votes to raise taxes to fill the gap. The courts could step in —- as they have done in Nevada —- and impose a $15 billion tax increase. It’s just a theory, but why take the chance?

Knowing how cynically state government operates, it’s wise to expect the worst. California taxes will go up early and often, Republicans will be pushed further to the margins and Democrats and public employee unions will have deeper control of the Legislature.

That scares me far more than Jerry Brown.

–Steven Greenhut

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  1. Peter
    Peter 1 November, 2010, 09:50

    It is scary when people who purport to be knowledgeable say things like the statement in this article:
    “They resolve that problem by eliminating Proposition 13′s requirement for a two-thirds legislative vote majority to pass budgets and replacing it with a simple majority of the Legislature.”
    Proposition 13 is NOT the source of the two-thirds requirement for budget passage; that is found it Article IV, Section 12, and it predates Proposition 13 considerably.
    While there is debate on the tax increase question, the opponents view would render the provisions of Article IV Section 12 superfluous, and the rules of statutory construction prohibit that.
    Finally, Proposition 58 from 2004 prohibits the Legislature from passing, and the Governor from signing, a budget that is not balanced. So your scenario is again an uninformed speculation – any budget passed in violation of the balanced budget requirement would simply be thrown out by the courts.

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  2. Steven Greenhut
    Steven Greenhut 1 November, 2010, 12:10

    That was obviously a mistake about Article IV. My apologies. However, your last point is wrong. If that were the case, then the courts would have thrown out the last budget and others before it. It’s more than speculation that Prop. 25’s passage will lead to tax increases. One need only look at the goals of its union supporters.

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  3. Why?
    Why? 1 November, 2010, 12:23

    I guess by calling Jerry Brown “the man most responsible for gumming up the state’s infrastructure thanks to his “small-is-beautiful” approach during his first governorship, and who will bet our economic future on a “Green Jobs” fantasy” really is wearing your bias on your sleeve, which begs a question, why is your opinion worth anything more than the million other uninformed bias views in the world. I’m sorry total capitol directed me to your ignorant rants. Good luck with Sarah: she and the Fox-aganda crew are the ones who are betting the future on fantasies. Where can I donate to shut down CalWatchDog?

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  4. Steven Greenhut
    Steven Greenhut 1 November, 2010, 12:45

    Why?

    Well, a column is by nature biased. I am a longtime critic of the empty vessel of Sarah Palin and even got slammed by Bill O’Reilly because of my criticism of him and his program. But you read one sentence you don’t like and you have me (a libertarian, by the way) all figured out and even want to shut down our entire site. And you call me ignorant?

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  5. Peter
    Peter 3 November, 2010, 14:02

    Actually, the last several budgets were balanced legally, if not practically speaking, because they assumed things that were unrealistic to get there. Prop 58 doesn’t prohibit unrealistic assumptions, so the courts wouldn’t have cause to throw them out. However, your uninformed scenario is that you could enact an unbalanced budget on its face ($100 billion of expenditures and $85 billion of revenues) without any semblance of a bad assumption to fill the gap! That is what allows the court to throw the budget out as invalid…..

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  6. Bc
    Bc 3 November, 2010, 15:08

    This is what happens leading up to bankruptcy. Federal bankruptcy law prohibits this kind of planned plunder and has two year claw back provisions to dissuade management from grabbing what’s left. If bond holders don’t run away after this passes or equivalently jack up yields they never will. Either way it’s check mate for Ca.

    Reply this comment

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