Financial chaos. Insolvency. Layoffs and more spending cuts.
This is what many predict will happen if the six propositions on the May 19 election ballot fail. State legislators and the governor put Propositions 1A to 1F on the ballot to end an acrimonious budget battle and close a $42 billion budget gap. If voters reject these measures, it’ll punch a multibillion-dollar hole in the budget and plunge the state back into financial crisis. AARP advises its members to vote “yes.”
“While it’s far from perfect, this package will at least end the year-to-year volatility of the budgeting process while protecting vital safety-net programs from draconian cuts during bad economic times,” said Jeannine English, AARP California state president. “Quite simply, this is the best deal the current system can produce.”
“Our choice is this package or financial chaos,” said Jim Mayer, executive director of California Forward, a bipartisan government reform group endorsing the six measures. “It is either this or more teacher layoffs and more seniors who won’t be getting adequate care.”
On the other side, Jon Coupal, president of the Howard Jarvis Taxpayers Association, said proposition supporters are engaging in “scare tactics. We are going to have to reexamine the way we do business, and we can do that without facing Armageddon.” The association was the first to air radio ads blasting the most important measure, Proposition 1A, as a crippling $16 billion tax hike on Californians.
Other groups criticized Proposition 1A for imposing such a strict spending limit that future funding wouldn’t keep pace with the growing needs for health care and the older population.
Gov. Arnold Schwarzenegger, R; Senate Pro Tem Darrell Steinberg, D; and Assembly Speaker Karen Bass, D, negotiated the budget compromise that produced the propositions. Business organizations, the California Teachers Association, the NAACP and others support all six measures as part of a campaign called Budget Reform Now.
Supporters plan a well-financed campaign. Already, most of the unions and other groups that defeated similar reforms in 2005 are supporting the propositions or remaining neutral.
Opponents are splintered. They don’t expect to match supporters’ spending, but they claim they’ll be competitive.
“These are pretty difficult and pretty complicated ballot measures,” said Dan Schnur, director of the University of Southern California Jesse M. Unruh Institute of Politics. “Under most circumstances, it would be difficult to get them passed. The multimillion-dollar question is whether there will be enough funding for an effective opposition campaign.”
•Proposition 1A: Sets limits for future state spending, extends several existing taxes to gain $16 billion in revenue and increases the size of the state’s “rainy day” reserve from 5 percent to 12.5 percent of the general fund.
• Proposition 1B: Allocates $9.3 billion to schools to make up for past budget cuts; only takes effect if Proposition 1A is approved.
•Proposition 1C: Allows the state to borrow up to $5 billion from future lottery proceeds by selling bonds to investors.
•Proposition 1D: Redirects more than $600 million into health and human services from the First Five programs created by a 1998 initiative backed by actor-director Rob Reiner that raised tobacco taxes.
•Proposition 1E: Shifts more than $225 million into existing mental health programs from a fund created for new community mental health programs by a 2004 initiative that imposed a new tax on high incomes.
•Proposition 1F: Prohibits pay raises for lawmakers and the governor when the state runs a budget deficit. It is the only proposition with strong support in the polls.
Laura Mecoy has written about California public policy for 25 years.