Prop 26 Blows a $1 Billion Hole in State Budget

Speaking of hypocrisy: Republicans consistently act as if deficit and budget concerns only apply to programs and policies designed to help working people. When it comes to something that would benefit the wealthy and large corporations, however, “deficits don’t matter”, as Dick Cheney memorably declared.

We see this with Meg Whitman’s call for a capital gains tax cut that would add at least hundreds of millions of dollars to the state’s budget deficit. We see it with Carly Fiorina’s call for extending the Bush tax cuts even though they are the main factor in the federal budget deficit.

And now we see it with Prop 26. That proposition would require a 2/3 vote for all fees – the only revenue source that can currently be created by a majority vote. That alone would devastate public services even further and make it impossible to fund important programs from recycling to oil disposal.

But that’s not all Prop 26 does. As Artem Raskin reports at the California Progress Report, a new Legislative Analyst’s Office study shows Prop 26 would also blow a $1 billion hole in the state budget:

The LAO’s nonpartisan analysis released last week revealed that Proposition 26 would nullify the “Gas Tax Swap” approved by the legislature in March, and eliminate about one billion dollars annually in anticipated revenues from the general fund for schools and other programs….

Proposition 26 is funded principally by the oil, tobacco and alcohol industries to make it more difficult for state and local government to impose mitigation fees on business activities that cause harm to the environment or public health and safety.

Once again we see the right-wing mega-corporate approach to California’s budget: deficits are OK when it benefits them, but awful and terrible and horrible when it benefits someone else.

This is worth keeping in mind as the media freaks out over a city manager in Southern California making $800,000. That’s chump change compared to the $1 billion cost of Prop 26. Where’s the outrage?

2 thoughts on “Prop 26 Blows a $1 Billion Hole in State Budget”

  1. but about fairness. It’s fundamentally unfair and unethical. So, I think your comparisons to the $1b fall flat.

    But, if I’m understanding this correctly, a 2/3 vote for an increase on any fees would include something like municipal trash pickup – for example, in my county, the dumps are run by the county and the fees are set by the county. So you’d need a 2/3 vote to increase the fee from say $3.50 a can to $4.00 a can.

    There’s two possible outcomes.

    1. The government body is likeminded anyway and has 2/3 vote. Easier, by the way, on a small board of 3 or 5 members.

    2. Because they can’t raise prices, the board ends up deciding to privatize the service with a simple majority vote, and the private company can raise fees with relative impunity.

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