By Katy Grimes

With all of the focus on the November ballot initiatives to raise taxes, Proposition 31 seems to have quietly avoided heavy scrutiny in the main stream media thus far. But this initiative is a wolf in sheep’s clothing, pretending to be much-needed reform.

There is growing confusion about ballot title and summaries on California’s ballot initiatives. It’s almost impossible to know how to vote on something. A “no” vote may mean “yes,” and visa versa, given the way the California Attorney General’s office plays fast and loose with writing the titles and summaries of ballot measures.

This is the case with Proposition 31 –what’s up is down, and what appears to be reform, is not. Equally disturbing is how so many of the state’s newspapers are jumping on board this phony “reform” measure. Even the California Republican Party officially endorsed Prop. 31.

However, most voters have grown suspicious  of anything claiming to offer “good government”  reforms.

Proposition 31

Proposition 31 would establish a two-year state budget, instead of the current annual budget cycle. It would prohibit the Legislature from creating expenditures of more than $25 million without first providing a source of the funding.

Prop. 31 would allow the governor to unilaterally make budget cuts if the Legislature fails to make necessary cuts, and would require the establishment of performance goals for budget items, as well as performance reviews of all state programs.

Prop. 31 would require the publication of all bills at least three days prior to a vote by the Legislature. It would give counties the power to alter state statutes or regulations related to spending unless the state Legislature or a state agency vetoed those changes within 60 days.

This “budget reform” initiative is intended to bring more transparency to the budgeting process, according to proponents.

So far, this sounds pretty good, right?

Dig a little deeper; the list of backers of Prop. 31 should raise everyone’s hackles.

Prop. 31 is both a new law and state constitutional amendment. It is sponsored by California Forward, a political action group which claims that it wants to “transform our state government through citizen-driven solutions to provide better representation, smarter budgeting and fiscal management, and high quality public services so all Californians have the opportunity to be safe, healthy and prosperous in the global economy.”

California Forward was created by “California Common Cause, the Center for Governmental Studies, the New California Network and the Commonwealth Club of California’s Voices of Reform Project at the urging of the California Endowment, the Evelyn and Walter Haas Jr. Fund, The William and Flora Hewlett Foundation, The James Irvine Foundation, and The David and Lucile Packard Foundation,” according to Ballotpedia.

Nicolas Berggruen, a European billionaire born and raised in Paris, France, has provided more than $1.5 million to the Prop. 31 Campaign. Interestingly, Berggruen is registered as a Democrat in Florida, and has provided the funding behind the Think Long Committee for California. He is also the founder and president of Berggruen Holdings and the president and chairman of the Nicolas Berggruen Institute.

Merger of wealth and politics

Earlier this year, California Forward and the Think Long Committee for California merged to form the ultimate elite group of former politicians and impertinent billionaires.

“The lineup of the two groups is a who’s-who of Capitol politicians who apparently just didn’t get enough of the place while in power: Former Assembly Speaker Willie Brown; recalled Gov. Gray Davis and his replacement, Arnold Schwarzenegger; Sunne Wright McPeak, former Contra Costa supervisor and former secretary of the California Business, Transportation, and Housing Agency; another former Assembly Speaker, Fred Keeley;  former California Secretary of State Bruce McPherson; and another former assembly speaker, Bob Hertzberg,” I wrote in Bored Billionaire Groups Merge.

“These politicians joined forces with billionaire financier Nicolas Berggruen; union boss Bob Balgenorth, president of the State Building & Construction Trades Council of California, AFL-CIO; and ueber-wealthy foundations such as the Evelyn and Walter Haas, Jr. Fund, the William and Flora Hewlett Foundation, the James Irvine Foundation and the David and Lucile Packard Foundation.”

As the founder of the Council for the Future of Europe, Berggruen supports “fiscal federalism and coordinated economic policy” to rescue the European Union from its debts–just the policy needed to fix California’s budget ills.

Real reform

“California needs a top- to-bottom overhaul that connects political decision-making to its unique social and economic reality and creates cause-and-effect accountability for those we elect to office,” said Sacramento Bee political columnist Dan Walters. “Proposition 31 is akin to giving someone with a flesh-eating infection an aspirin to relieve the pain momentarily when the patient truly needs radical surgery or powerful drugs to stop the infection.”

While the California Republican Party has endorsed Prop. 31, many Republicans are not supportive.

The East Bay Tea Party warns that Prop. 31 “amends the California Constitution and creates a ‘Super’ Council that will oversee all levels of government. Corruption cannot be fixed by adding a new layer of bureaucrats.”

And, it is important to notice that California Forward rather awkwardly avoided pointing out in its official ballot argument in favor of it that Prop. 31 will socialize state revenue sharing. Tax sharing governments are not accountable to the taxpayers of jurisdiction with which they share taxes.

Tax sharing is a banal sounding term, but actually means central government-collected, locally-shared taxes, and is nothing more than Senior English Semantics, covering for “redistribution.”

My CalWatchDog.com colleague Wayne Lusvardi warned of this in “Proposition 31 would regionalize state revenue sharing“: “Despite regionalization failing miserably in the European Union, California is proposing to adopt it as a tax-sharing policy for distributing state funds to local governments if voters approve Proposition 31 on the November ballot.”

Others warn that Prop. 31 adopts parts of the United Nation’s Agenda 21.

“It calls for the institutionalization of the UN Agenda 21 ‘3 E’s’:

* Economy: Private/Public Partnerships and Project Labor Agreements will replace free markets;

* Equity: Social and Environmental Justice and the redistribution of wealth will be mandatory instead of Equal Justice;

* Environment: Climate Change, Species, Habitat and false science will be used as an excuse to regulate and control the citizens of California,” explained the Halfway to Concord blog.

“The ‘Super’ Council will measure the ‘Performance and Accountability’ of every government entity against the UN Agenda 21 3 E’s. The Council will have the ultimate power to make or stop a local jurisdiction from doing anything based on this proposition.”

Opposition to Prop. 31

Ballotpedia reports that the opponents to Prop. 31 are mostly labor unions, along with the California Democratic Party. But their opposition isn’t quite the same as the Tea Party’s.

The arguments against Proposition 31 in the state’s official voter guide were submitted by:

*Sarah Rose, the chief executive officer of the California League of Conservation Voters.

*Joshua Pechthalt, the president of the California Federation of Teachers.

*Ron Cottingham, the president of the Peace Officers Research Association of California.

*Anthony Wright,  the executive director of Health Access California.

*Lacy Barnes, the senior vice-president of the California Federation of Teachers.

*Lenny Goldberg, the executive director of the California Tax Reform Association.

Other opponents include the California Democratic Party, and:

The Public Policy Institute of California just published a statewide survey that found when voters read the ballot title and label of Prop. 31, “25 percent of likely voters say they would vote yes, 42 percent would vote no, and 32 percent are undecided.”

PPIC found, “The proposition does not have majority support in any party, demographic, or regional group. Many likely voters across groups do not know how they will vote on Proposition 31. Twenty-nine percent of likely voters say the outcome is very important to them.”

There are many things about Prop. 31 to dislike, including the many exemptions. Prop. 31 exempts the state’s growing and unchecked bond debt, and the exponential growth of existing state programs.

As Prop. 31 opponent Health Access pointed out, “Prop 31 would enshrine all of its 8,000+ words (longer than the U.S. Constitution) into the California Constitution — unable to be changed without another vote of the people. Even the unobjectionable parts of Prop 31 (a two year budget cycle, for example) shouldn’t be in the Constitution, written in stone for a generation or more.”

By Wayne Lusvardi

Despite regionalization failing miserably in the European Union, California is proposing to adopt it as a tax-sharing policy for distributing state funds to local governments if voters approve Proposition 31 on the November ballot.

Prop. 31 is a combined new law and state constitutional amendment sponsored by the California Forward political action group.  Nicolas Berggruen, a European billionaire, is the biggest sponsor of California Forward with a $1 million donation to the pro-Prop. 31 Campaign.  Berggruen owns the IEC College of vocation schools in California and is a registered Democrat in Florida.  He founded the Council for the Future of Europe, which has proposed “fiscal federalism and coordinated economic policy” to rescue the European Union from its debts.

Regionalism Will SAP Revenues from Suburbs to Cities

Urbanologist Wendell Cox writes that “regionalism” is an emerging policy of the Obama administration, as described in Stanley Kurtz’s new book, “Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities.” Kurtz is a social anthropologist from Harvard.

Prop. 31 will not result in new regionalized governments. Rather, it will end up in what Cox calls “fiscal regionalism” run by a committee.  The tax-sharing facets of Prop. 31 are:

1. “Granting counties, cities, and schools the authority to develop, through a public process, a Community Strategic Action Plan for advancing community priorities that they cannot achieve by themselves.”
2. “Granting local governments that approve an Action Plan the ability to identify state statutes or regulations that impede progress and a process for crafting a local rule for achieving a state requirement.”
3. “Providing some state funds as an incentive to local governments to develop Action Plans.”
4. “Implement the budget reforms herein using existing resources currently dedicated to the budget processes of the State and its political subdivisions without significant additional funds. Further, establish the Performance and Accountability Trust Fund from existing tax bases and revenues. No provision herein shall require an increase in any taxes or modification of any tax rate or base.”

According to Cox, regionalization strategies are “aimed at transferring tax funding from suburban local governments to larger core area governments.”  The Prop. 31 version of regionalization would not amalgamate city, county, special district and school district governments. Nor would it create new taxes. But it could authorize the state to withhold or divert taxes from local governments unless those governments adopted a “Strategic Action Plan” to distribute the revenues from the suburbs to the large urban cities.

In essence, a Strategic Action Plan, or SAP for short, would sap the wealth out of suburbs. SAPS might also sap the bond ratings from suburban communities.

Governor Would Become “Emergency” Czar

Probably one of the most controversial provisions of Prop. 31 would grant the governor the power to cut or eliminate any existing program during a “fiscal emergency.”  In essence, the governor could usurp local government decisions on where to spend state funds.

Budgets for local public schools, community colleges or cities could be cut at the whim of the governor and the funds diverted elsewhere.  The governor could conceivably use new emergency powers to divert state funds to his choice of regional Strategic Action Plans.

Why Democrats and Unions Oppose Prop. 31

Public unions have historically been concerned about granting the governor broader emergency powers.  On July 11, 1999, the Gov. Gray Davis administration called legislative committee chairpersons to inform them that the governor intended to direct the outcomes of selected funding bills without consulting their authors or the legislature.  The leaders of the legislature at that time — Assembly Speaker Antonio Villaraigosa, D-Los Angeles and Senate President Pro Tem John Burton, D-San Francisco — called Davis’ actions a “totally improper intrusion into the legislative process.” The concern was that Davis was going to kill a bill sought by labor unions to increase workers’ compensation benefits.

This explains why the Democratic Party is currently opposed to Prop. 31 giving the governor emergency powers over the budget. Also, any consolidation or revenue sharing arrangement of local governments might lead to the heads of local unions losing their jobs if absorbed into a larger union.

Why Republican Party Wrongly Endorses Prop. 31

Oddly, the California Republican Party supports Prop. 31. This is because Prop. 31 is being misleadingly advertised as a government budgetary efficiency measure.  But a two-year budget and performance budgeting do not need the approval of voters to be implemented.

Budget analyst John Decker in his book, “California in the Balance: Why Budgets Matter,” draws on an example from the Schwarzenegger administration to explain why a voter initiative is not needed for Prop. 31, except for the tax sharing provisions:

“Amid much fanfare the year after his election, Governor Schwarzenegger announced the results of a year long internal effort to find efficiencies in government known as the California Performance Review.  Though most of the recommendations made could be implemented administratively, few were actually taken in the form proposed.”

Local governments can form “joint powers authorities” in California without Prop. 31 and make their own decisions about revenue sharing.  In an email to this writer about Prop. 31, Wendell Cox stated: “State law permits Joint Powers Authorities and this is all that is needed.”

Tea Party Rightly Opposes Prop. 31 Despite Paranoia

The proponents of Prop. 31 may say that the Tea Party and those opposed to fiscal regionalism are over-reacting to its provisions.  But why are the proponents trying so hard to sell Prop. 31 as a budget reform and government performance measure with little mention of its tax-sharing provisions?

The East Bay Tea Party has more accurately perceived the dangers with Prop. 31 as the creation of a “super” layer of government that cannot be held accountable by local government elections.  Unfortunately, the paranoid Tea Party also fears that Prop. 31 would measure the “performance and accountability” of local governments by United Nations Agenda 21.

No doubt this sort of paranoia reflects the powerlessness and political marginalization of the Tea Party’s members in California. But such paranoia gives the opponents of the Tea Party reasons to discount them as “wing nuts” not to be taken seriously.

California Forward Hides Tax Sharing Part of Prop. 31

California Forward is selling Prop. 31 to the public as “trustworthy, accountable for results, cost-effective, transparent, focused on results, cooperative, closer to the people, supportive of regional job generation, willing to listen, thrifty and prudent.” The touted provisions of Prop. 31 call for a “two-year budget cycle” and for “performance budgeting.” Prop. 31 is officially titled “The Government Performance and Accountability Act.

California Forward makes no mention in its filing or in its official ballot argument in favor of it that Prop. 31 will socialize state revenue sharing.  And the analysis of the California Legislative Analyst is so neutral and narrowly focused that it is does not help the public understand the importance of the tax-sharing aspects. The ballot arguments in favor and against Prop. 31 also ignore that it would socialize local government taxes by regions.

Commentariat Mislead About Prop. 31

It is amazing that California’s journalistic commentariat has, thus far, only been concerned that Prop. 31:

* Is a Trojan horse that would result in “tweaking” environmental regulations;

* Prescribes an “aspirin” instead of “surgery”;

* Is a “virtuous budget reform package that falls short;” but

* Would “restore our state to greatness.”

Wendell Cox is one of the few that has caught the magnitude of the problem of regionalism to our democratic form of government when he wrote, “[D]emocracy is a timeless value. If people lose control of their governments to special interests, then democracy is lost, though the word will still be invoked.”

In an email, Cox further wrote:

“In general, the idea of tax sharing is negative. This breaks the connection between local governments and taxpayers, as tax sharing governments are, by definition, not accountable to the taxpayers of jurisdiction with which they share taxes. Milton Friedman was right in saying something to the effect that people are more careful about with their own money than they are with other people’s money. This would be a very bad step for California, which already is suffering significant ill effects from insufficient fiscal responsibility.” 

Prop. 31 is Ripe for Abuse 

Safires’ Political Dictionary defines “tax sharing” as “collection of revenues by the (state) government, returned directly to the (local) governments without (state) control of expenditures.”  Prop. 31 would go beyond merely returning tax revenues to local governments without controls and conditions attached.  It would be prone to abuse for funding political cronies and political earmarks.

When former President Clinton proposed a form of revenue sharing in an economic stimulus bill, Republicans described it as political pork and successfully blocked it.  But in the California Legislature, the Republican Party no longer has any blocking power.  Prop. 31 would be prone to abuse because there are few checks and balances anymore in California’s new “Fusion Party.”

History indicates bureaucratic agencies have a way of not ending up as policy makers intended. There is no way of knowing whether Prop. 31 would end up as some form of “Tennessee Valley Authority” that would usurp local governments and would be self-perpetuating without any sunset provisions.

Voters on both sides of the political spectrum should be concerned about the implications of Prop. 31.