Tag Archives: Special Election

Can You Buy An Election?

I think we’re certainly close to finding out, with respect to the May 19 special election.  While recent polling shows the electorate predisposed to opposing it, the money race is extremely lopsided in favor of the Yes side, and I suspect that will not change.

Led by Governor Schwarzenegger and a strange bedfellows coalition of big business and educators, the main campaign committee now reports donations of almost $3.7 million over the last six weeks.

Tops on the donor list is former Univision CEO Jerry Perenchio, a longtime Schwarzenegger campaign donor, who dropped $1.5 million into the campaign late last month. But more recent big players are also worth noting. Last Friday, official campaign finance reports showed a $500,000 check written by Chevron and a little more than $250,000 from political switch-hitter Reed Hastings. Hastings, the founder of online video rental giant Netflix, is a former member of the state Board of Education and has a track record of contributions to both the GOP governor’s causes and to a bevy of California Democrats […]

Meantime, there’s pretty much zippo reported so far in the way of money in opposition to any of the six budget-related ballot measures. Tops in cash seems to be the campaign opposing Proposition 1E, the temporary transfer of mental health money to the state’s general budget needs. That campaign reports a little more than $120,000 on hand.

The use of the Prop. 1B bribe (I really don’t know what else to call it) to split the labor coalition, and the co-opting of the legislature through predictable fearmongering has made this a virtual clean sweep for the Governor in the fundraising battle.  

Additional support for the Yes side will be provided by the bipartisan fetishists in the media, whose “not too hot, not too cold” approach to problem solving should be completely discredited by the absolute and total mess made of California in its name, but which somehow still has some cachet.  Dan Weintraub, good little centrist that he is, decides that a spending cap will – by itself – save the state from boom-and-bust budget cycles, when the history of such measures clearly shows that they ratchet down state spending to an unsustainable level that ruins quality of life for the broad mass of citizens.

TABOR, a (Colorado) state constitutional amendment adopted in 1992, limits the growth of state and local revenues to a highly restrictive formula:  inflation plus the annual change in population.  This formula is insufficient to fund the ongoing cost of government.  By creating a permanent revenue shortage, TABOR pits state programs and services against each other for survival each year and virtually rules out any new initiatives to address unmet or emerging needs.

Declining services since TABOR’s enactment have become increasingly evident in most major areas of state spending:  K-12 education, higher education, public health, and Medicaid.

“”[Business leaders] have figured out that no business would survive if it were run like the TABOR faithful say Colorado should be run — with withering tax support for college and universities, underfunded public schools and a future of crumbling roads and bridges.”” Neil Westergaard, Editor of the Denver Business Journal

This fanciful notion that you can just sock money away for a rainy day and not then be restricted by the complete refusal to raise taxes, combined with tying long-term future growth to the worst three fiscal years (this year and the next two) in the state’s history, and the fact that the rainy day fund would have to be replenished even in DOWN fiscal years, does not comport with the facts.  We have verifiable data showing what happens when you artificially limit the size and scope of government and it’s neither pretty nor desirable – before Colorado repealed TABOR, they were last or nearly last in spending in almost every major category across the board, with disastrous real-world effects on quality of life.  The rainy day money never gets spent, it becomes another part of the budget out of the hands of lawmakers, and will only increase the deficit while crippling Californian’s ability to cope with the downturn.

But one guy making that argument on a computer doesn’t have the impact of a phalanx of glossy ads warning “Vote for this OR DIE!!!!”  Given the paid media and earned media blitz on the Yes side, we really will see how much money can buy.

Securitizing The Future

Building off Brian’s post, George Skelton’s discussion of Prop. 1C gets things about right – the choice is between a terrible public policy and deeper debt.  Supporters of the special election will only show you one side of that argument, the expanding budget deficit that would result from failure, wrapping that into a fearmongering message of urgency.  Opposers of the special election prefer to look at the actual policy, which Skelton describes accurately.

Prop. 1C — the “Lottery Modernization Act” — is one of six budget-related measures proposed by the Legislature and Gov. Arnold Schwarzenegger. It is by far the measure with the biggest immediate money impact.

It would authorize significant tweaking and expansion of the state lottery, creating more winners. And it also would allow the state to borrow $5 billion immediately against future lottery revenue.

Those should be separate questions: 1) Should the state expand its gambling operation? 2) Should Sacramento take out a loan for, say, 30 years just to help pay one year’s worth of daily expenses? […]

You could also call it a payday loan. That’s how far Sacramento has fallen.

This is probably the easiest $5 billion the state can pocket, even if it would have to pay back double, including interest.

Put aside the fact that lottery revenues have dropped consistently over the past several years (per capita participation is among the lowest in the nation), and that, even if this scheme of more advertising and bigger payouts worked, you would be balancing the budget on the backs of a lottery-buying constituency composed mainly of the poor.  But borrowing policies like this, as a result of putting off tough decisions and mortgaging the future for 30 years, are why our deficit bursts at the seams relative to other states.  In the long term we will pay far more for this borrowing that could ever be brought in.  The solution from the legislature and the Administration, literally, is to not call it borrowing.  David Crane (Arnold’s economic advisor) initially makes a decent point, then hides behind the word “securitization” to mask the reality.

Crane maintains that both tax increases and government spending cuts slow economic recovery. Government programs are “a way of keeping more people employed,” he says. “In a recession, you want government to be counter-cyclical — the teeter-totter” to a falling private sector.

“The overriding principle is that, at a minimum, you want government to be retaining the same level of expenditures, if not expanding.”

Crane points to President Obama’s economic stimulus package, which is heavy on new spending.

Of course, the feds can run up huge deficits and print money. States can’t. And many California conservatives would rather see state government go belly-up than pay higher taxes.

Part of the distasteful remedy may be the lottery borrowing. Only don’t call it “borrowing” in front of Crane. It’s “securitization,” he insists. Future lottery revenue would “securitize” the state’s repayment of $5 billion in bonds.

This is a semantics game with political consequences. When the “borrow” word is used to describe the lottery proposal, I’m told, voter support for it drops by 25 percentage points.

Of course, it is borrowing – when you issue bonds and promise to pay them back later, you’re borrowing.  But the “securitization” model also masks the fact that California officials will have to go out into the market and find investors to buy debt based on future lottery revenues.  Despite the success of recent state forays into the bond markets, that’s not such an easy sell:

The ballot measure simply gives the state the legal authority to go out into the financial markets and find investors willing to purchase debt backed by a revenue source that has declined since 2005-06.

Before counting on quick cash from the sale of lottery bonds, it is worth reviewing borrowing-related assumptions made in recent budget agreements, such as the $1 billion in proceeds from the sale of EdFund booked as part of the 2007-08 budget agreement, a sale that was never consummated, or the $1 to $2 billion in proceeds assumed in various budgets from proposed, but never sold, pension obligation bonds. Or the $1 billion in proposed, but never issued, bonds for transportation programs that were to be repaid out of tribal gaming receipts. The careful reader may note a pattern here – a pattern that began long before the global meltdown in financial markets that has made obtaining loans more difficult for even the most creditworthy borrowers.

This isn’t a serious funding measure, it’s an accounting trick – a way to take $5 billion off the books quickly and easily with a minimum of pain.  It’s symptomatic of the failed solutions taken by this legislature and this Governor for years, which constantly try to push off solutions and never deal with the consequences (of course, the needy in this state always do).  That anyone would sink money into protecting this status quo speaks to a failure of imagination, and a willingness to delay fundamental reforms that must happen before it’s too late.

Get Used to This: Special Election or Die

You know how the Republicans had a gun to the heads of the Democrats over the budget?  Well, it is not pointing at the legislators any more. It’s still there, of course.  Now, it’s pointed directly at the voters.  Because, seriously, the Republicans will cut you:

Republican lawmakers, including the few who voted for a $12.5 billion tax package in February, say there’s no way they can support more tax increases.

“Additional taxes on top of what we’ve done cannot be part of the solution because the economy can’t stand it,” said Assemblyman Roger Niello, R-Fair Oaks (Sacramento County), Assembly budget vice chairman.

*   *   *

“If the voters reject (the measures), what the voters are really saying is ‘We want you to go back to partisan warfare. We want you to go back to arguing and not getting something done,’ ” said Assembly Republican Leader Mike Villines of Clovis (Fresno County). “The message to the Legislature would be to go back to your corners.” (SF Chronicle 4/6/09)

There are a few logical problems with this analysis.  The first being that the electorate for a poorly noticed special election will always carry a partisan bias.  The turnout will be abysmal; perhaps we’ll get 20% of registered voters to vote.  If the voters tell the legislature to go to hell, nobody should be shocked. These voters are the most active and the most partisan.  On the right they can’t stand taxes, and on the left, well, they have a heart and cannot stomach the thought of additional cuts.

This is the theme that we will be seeing to pass Prop 1A. If the voters don’t pass this, the budget will explode. In effect, the task that the legislature couldn’t accomplish, saving the budget from collapse, is now somehow the voters’ responsibility. I don’t discount the pain that failure of the special election, it will clearly be painful. But why must the voters do the heavy lifting that the legislature has failed to do?

A deeper question is how long the voters will fight the Republican battles. How long will it be before the Democratic ideas of a larger social safety net are pervasive.  I bring this up because of a piece from a Money Mag. editor on where we go from here.

Social safety nets didn’t seem so important when even families with modest incomes could get 10% to 20% annual gains on their houses. … Some optimistic pundits even saw this borrowing spree as a workable solution to the new stresses that were showing up in the economic statistics, such as rising inequality and increasingly unstable middle-class incomes. If you lost your job or didn’t get a raise, you could borrow to smooth things over until better times.

It seems unlikely we’ll revert to that behavior anytime soon. So one prediction I’ll make about the next normal is that voters will look to government to help them manage risk. (CNN/Money 4/6/09)

As we move forward into the 2010 elections and beyond, are voters really going to be so fearful of the boogeyman “big government.”  Time after time, the only institution that can pick up the pieces of another financial disaster is the government.  Are voters really going to want to slash and burn through the only institution that can be relied upon?

So, whether or not the Republicans retreat to their ideological corner or not, their Norquistian position has an expiration date stamped on the underside.  The GOP ideas are beginning to curdle and emit a nasty odor.  Whether it happens immediately or at some later election, the GOP ideological extremism will be overcome.

Special Election Delays Make Yacht Party Happy Campers

CapAlert gets around to covering the issue we covered on Wednesday – how legislative vacancies on the Democratic side embolden the Yacht Party and make it more impossible to pass a decent budget.  What amazes me is that they get a Yacht Party leader to go on the record about it:

To this day, Ridley-Thomas’ seat remains unfilled. Democratic Assemblyman Curren Price of Inglewood finished first in the primary last week and is expected to take his place in the upper house after a May 19 runoff.

Of course, that will create a vacancy in the Assembly, which will likely last until early October by virtue of the state’s election-scheduling laws.

“Every vote we pick up, it is exponential for the Republicans,” said Assembly GOP leader Mike Villines. “It gives us a lot of ability to move the debate and navigate to issues that we care about.”

This is Yacht Party logic – they actually think a vacancy is a PICK-UP for them.  It’s the logic of an extortionist.  No sane person other than someone trying to exploit would agree that a less-than-full legislature for years on end makes sense from a public policy standpoint.  That’s why we could significantly reduce the time of the merry go-round AND save millions of dollars in special election costs by instituting Instant Runoff Voting for special election seats.

But the Yacht Party has no intention of fixing the policy.  They want to laugh as they see legislators walk out the door.

In Northern California, Rep. Ellen Tauscher has accepted an Obama post in the state department, though still faces the confirmation process.

Sen. Mark DeSaulnier, D-Concord, has already declared for the seat, and Assemblywoman Joan Buchanan, D-Alamo, is said to be considering a run.

“Joan Buchanan should run for Congress,” said a laughing Villines, hoping for yet another vacancy in his house. “She’d be an excellent congresswoman.”

“It creates a better dynamic than having the ability of the liberal-controlled Legislature to just steamroll its own desires,” Villines said.

A better dynamic in the sense of being a fake dynamic, where the elected will of the voters is not reflected in the ability of the legislature.  I can’t think of a better argument to repeal two-thirds than these two quotes.

Ending The Special Election Merry Go-Round

Assemblyman Ted Lieu, who joined us at Calitics yesterday for an online town hall, has an op-ed with Gautam Dutta of the New America Foundation arguing for an election reform he will soon combine with a bill, to institute instant runoff voting for all special elections in California.

Here’s the root of the problem. On March 24, 2009 barely 6 percent of registered voters showed up for a special election to fill a vacancy for California’s 26th Senate District. In an area with almost 1 million residents and 400,000 registered voters, only 23,000 civic-minded citizens decided who would replace former State Senator Mark Ridley-Thomas (newly elected to the Los Angeles County Board of Supervisors).

How much did this special election cost? A whopping $2.2 million of our tax dollars – nearly $100 per voter – according to the Los Angeles Registrar-Recorder / County Clerk.

Unfortunately, we’re not even close to being finished. Since no candidate won a majority, we must hold a second election that will cost even more money. Because this is a heavily Democratic district, it is certain the Democratic nominee, Assemblymember Curren Price, will win. Yet Mr. Price must wait two months for a second election before he can be sworn in as State Senator.

Far from being “special”, special runoff elections cost millions of tax dollars to administer – at a time when governments have been forced to lay off schoolteachers and workers.

Obviously, the Assemblyman is making the fiscal responsibility argument for combining low-turnout special elections through IRV.  But there’s another crucial argument to be made – the irresponsible delay in proper representation in the legislature.  Mark Ridley-Thomas was elected to the LA County Board of Supervisors in November, and his replacement won’t take office until May.  That’s unacceptable, and especially so in California, where the Yacht Party uses the conservative veto to hijack the budget process.  With a faster resolution of the Ridley-Thomas seat, for example, Republicans would have one less vote to use as leverage for the budget.

And this is more acute in the case of special elections for Congress in CA-32 and CA-10.  Imagine, for example, if Sen. Gil Cedillo wins the Solis seat.  He could be replaced by a sitting Assemblymember, which is the logical scenario.  Then THAT Assembly seat needs to be filled.  By the time all the special elections and runoffs are complete, we’re well into 2010.

Enough.  Instant runoff voting is a perfectly acceptable way to divine the will of the people without the need for a separate runoff election.  The aforementioned Mark Ridley-Thomas has called for a feasibility study into IRV for these special elections.  Lieu and Dutta explain:

With IRV, voters get to rank their choices, 1, 2, 3. If your first choice cannot win, your vote automatically goes to your second (i.e., runoff) choice. It’s like conducting a runoff election, but in a single election. If IRV had been used last night, the election for the Senate district would be finished.

IRV has already been adopted by San Francisco, Oakland, Minneapolis, Memphis, and Santa Fe. Currently, Louisiana, South Carolina and Arkansas all use IRV for overseas voters. A number of prominent leaders have endorsed IRV, including: President Barack Obama, Senator John McCain, California Controller John Chiang, California Secretary of State Debra Bowen, and former Los Angeles Mayor Richard Riordan. Influential civic groups also support IRV, including: Los Angeles Area Chamber of Commerce, Los Angeles League of Women Voters, Los Angeles County Federation of Labor, Asian American Action Fund, Southwest Voter Registration Education Project, and New America Foundation.

This is not only a budget issue, it’s the right reform for California.  Let’s end the special election merry go-round.

Bundles Of Money On The Yes Side For The Special Election

Despite the recent PPIC poll on the May 19 ballot initiatives, nobody should be confident in which direction this election will go.  Though the polling position for the “Yes” side is increasingly untenable, it’s clear that they will have far more resources to draw from leading up to the election, and will bombard the airwaves with their message (probably a message of fear).  Just yesterday, another $1.5 million dropped into the Yes campaign’s coffers.

A. Jerrold “Jerry” Perenchio, former chair of the largest Spanish-language media company in the United States, has donated $1.5 million to back two May special election measures.

Perenchio’s donated the money to the Budget Reform Now committee, which calls for “yes” votes on Propositions 1A and 1C.

Proposition 1A would impose state spending restrictions, establish a “rainy day” fund for budget shortages and extend tax increases for two years. Proposition 1C allows the state to borrow $5 billion against future profits of a revamped state lottery.

I should note that Perenchio spent $1.5 million to back Arnold’s 2005 special election, too.  So he doesn’t have the greatest track record.  And it is not the case that the side with the most bucks wins the election.  See T. Boone Pickens’ Prop. 10 last year.  While special interests can spend lots of money and get their way in the California legislature*, that’s not always the case at the ballot.  But this disparity could be great, and that will move numbers a little.

Calitics will be offering endorsements on the May 19 election within the next couple weeks.

* – Please read that report by the Sacramento Bee, and this sidebar about the top 10 spenders in Sacramento and how well they did with their bills.  The money goes in and the favors go out, on a truly epic scale.  We have to take our state back with major structural reform.

Richard Riordan Crushes The Special Election Ballot

In an op-ed in today’s LA Times, former LA Mayor Richard Riordan doesn’t hold back against what he calls California’s May ballot scam.  Being a Republican, some of the arguments are of the familiar anti-tax stripe.  But being a liberal Republican who endorsed Barack Obama for President, he makes some arguments from the Democratic side of things.

Then there’s Proposition 1D, with its clunky and dishonest title: “Protects Children’s Services Funding. Helps Balance State Budget.” How does it “protect” children’s services funding? By taking $1.6 billion currently committed to children’s health services and preschool and throwing it into the budget maw.

Proposition 1E, “Mental Health Services Funding. Temporary Reallocation,” is another travesty. It simply grabs $450 million that voters specifically directed to mental health services.

The May ballot leaves me with some questions for my fellow Californians.

First, to my liberal friends: Can you really support propositions that will drastically cut services to the state’s neediest — especially after legislators increased the state sales tax, a regressive tax that places a larger burden on the poor?

He then makes the discredited argument that rich people will move elsewhere if their taxes become too high.  And then he goes on about “restructuring state government,” echoing the rhetoric of Mr. Blow Up The Boxes, the guy who, uh, didn’t.  So it’s a mixed bag.

However, there’s no question that many of the ballot propositions, particularly 1A, would drastically cut services to the state’s neediest.  In a new report, The California Budget Project shows that 1A would not impact the continuing revenue shortfall in the state budget, and would in fact exacerbate it:

Proposition 1A would not address California’s existing structural shortfall – the gap between revenues and expenditures – that exists in all but the best budget years. The state’s two long-term budget forecasts, issued by the Legislative Analyst’s Office (LAO) and the Department of Finance, both identify an ongoing gap between revenues and expenditures. Moreover, the Department of Finance’s forecast projects a significant ongoing gap even taking into account the continuation of the spending reductions outlined by the Governor in his proposed 2009-10 budget.

The revenue forecast amount established by Proposition 1A, which limits spending from the state’s existing tax base, would be significantly below the Governor’s “baseline” spending forecast, a forecast that assumes that the cuts proposed by the Governor in his New Year’s Eve budget release continue.  For example, in 2010-11, the first year when the Director of Finance would be required to calculate whether the state has received “unanticipated revenues,” the revenue cap would be an estimated $16 billion lower than the Governor’s “baseline” spending estimate for the same year. The gap would widen in 2011-12 and 2012-13 to $17 billion and $21 billion, respectively.

By basing the new cap on a level of revenues that is insufficient to pay for the current level of programs and services, Proposition 1A would limit the state’s ability to restore reductions made during the current downturn out of existing revenues. Had Proposition 1A been in effect during the late 1990s, for example, it would have diverted “unanticipated” revenues from the General Fund  in 1995-96 and 1996-97, years when the “expenditure forecast” amount, the test used to trigger the shift of monies out of the General Fund, was below the LAO’s 1995 “current services” forecast for the same fiscal year.

Even in years with budget shortfalls, the so-called “rainy day” fund would need to be enhanced.  Considering that we have an aging population in California, with the age group 65 and older projected to grow the fastest over the next decade, anything that dramatically lowers state spending, and nullifies the ability to restore that spending even in a good budget year, will slash services which will only grow more needed in the years to come.  

Then there are the other goodies in 1A, like the ability for the Governor to make unilateral mid-year spending cuts.  And the fact that the spending formulas are based on estimated and not actual revenues (you’ve seen this year how they fluctuate wildly).  Bet you won’t see that on the ballot language.

The May 19 ballot will feature a tiny universe of the state’s voters.  If this small a subset of the population can make these kind of drastic changes to California’s future, we should all be ashamed.

NY-20: Stick It to the GOP

{First, a cheap plug for my blog Senate Guru.}

While I typically focus on Senate races, the special election in New York’s 20th Congressional district is an excellent opportunity to stick it to the Republican Party.

NY-20 is a Republican leaning district in voter registration, but has been recently represented by now-Senator Kirsten Gillibrand and even narrowly supported now-President Barack Obama over John McCain.

The Democratic nominee, Scott Murphy, has turned a deficit in the polls into a narrow four-point lead over Republican Jim Tedisco.  Momentum is on our side!  A victory in this special election wouldn’t just be a nice Democratic hold, but, since it is a Republican-leaning district, it would also be a major embarrassment for Republicans, particularly new RNC Chair Michael Steele.

How desperate are Republicans in this race?  Well, they’re very literally reduced to going with a noun, a verb, and 9-11 in flailingly attacking Murphy.  And how loathsome is the Republican nominee?  Even the Libertarian candidate, who was booted from the race after – it would appear – Republicans made a concerted effort to get enough Libertarian ballot signatures overturned, has endorsed Scott Murphy.  (And it’s one hell of an endorsement.)

The special election is this Tuesday!  So what can you do to help?

Phone bank for Scott Murphy!

This is a special election, so GOTV is everything.  On Monday or Tuesday, if you can spend literally one single hour making calls, that could be the difference in a Republican pick-up versus a Republican embarrassment.

PPIC Poll: The Special Election Is Going Down

I think the state legislature and the Governor might want to try the tactic of opposing the May 19 ballot initiatives, because apparently, anything they support, the public does the opposite.

When read the full text of the ballot measures, likely voters express these preferences:

Proposition 1A: About four in 10 support the measure (39% yes, 46% no, 15% undecided) to change the

budget process by increasing the state “rainy day” fund. Less than half say the measure would be very (7%)

or somewhat (38%) effective in helping California avoid future state budget deficits.

Proposition 1B: They are divided (44% yes, 41% no, 15% undecided) on the initiative that would require future

supplemental payments to local school districts and community colleges to address recent budget cuts.

Proposition 1C: Half oppose (37% yes, 50% no, 11% undecided) the measure to modernize the lottery and

allow for $5 billion in borrowing from future lottery profits to help balance next year’s state budget.

Proposition 1D: Nearly half support (48% yes, 36% no, 16% undecided) the proposition to temporarily transfer

funds from early childhood education to help balance the state budget.

Proposition 1E: Nearly half favor (47% yes, 37% no, 16% undecided) the measure to transfer money from

mental health services to the general fund to help balance the state budget.

Proposition 1F: An overwhelming majority (81% yes, 13% no, 6% undecided) support the initiative that would

block pay increases to state elected officials in years of budget deficit.

Keep in mind that the first poll, taken about a month ago, showed all six measures passing by a fairly decent margin.  And there has been no coordinated opposition.  So what changed?  I’d gather the confidence in the legislature and the Governor has completely collapsed:

Eight weeks before the special election-called as part of the 2009-2010 budget agreement between the governor and legislature-those Californians most likely to go to the polls are feeling grim about the state of their state: The vast majority (77%) say it is headed in the wrong direction and see its fiscal situation as a big problem (85%). They give record low ratings to the legislature (11%) and to their own legislators (29%). Their approval rating for Governor Arnold Schwarzenegger (33%) has dropped to a new low among likely voters. For the first time, a majority of Republican likely voters (54%) disapprove of the job performance of the Republican governor.

The results are striking when compared to rising approval ratings for Congress and California’s senators and to  

a strongly positive view of President Obama-despite a challenging economic climate.  

“Californians are clear that the budget situation is serious, but most disapprove of the leadership in

Sacramento-the people who are providing the solutions,” says Mark Baldassare, PPIC president, CEO, and

survey director. “These leaders have their work cut out for them if they want to persuade voters that the ballot

measures are necessary to address the problem.”

If you want to know why the Governor had to explain that he’s not running for future office, that would be because nobody likes him.  And the legislature, obviously, is even worse – the 29% rating for people’s local legislator is absurdly low and quite dangerous.  In a normal world, that would spell lots of primary challenges.

Let me stress that this election is not over – the opposition still isn’t well-funded, and the CTA just put $2 million into Prop. 1B.  The Governor has already started funding the other measures.  With an unbalanced funding war, these measures could bounce back.  But the rule of thumb is that measures in this position right now lose.  I see 1A in particular in the situation of the mountain climber from The Price Is Right, with just a little opposition sufficient to send him over the cliff.

Prop. 1A: Stakeholders Line Up

I’m thoroughly unsurprised that Steve Poizner has joined Meg Whitman in an effort to out-anti-tax one another through opposition to Prop. 1A.

Specifically, the politicians don’t want you to know all the facts when it comes to Proposition 1A.  This is the ballot measure that would impose a state constitutional spending limit – a concept that is supported by an overwhelming majority of Californians.

However, if the measure passes, it will also extend the huge tax increases recently approved by the legislature. Passage of Proposition 1A means that the near-doubling of the car tax, the 1 cent statewide sales tax increase, the income tax hike and the reduction in the dependent tax credit would continue for an additional two years.  That adds up to an estimated $16 billion in higher taxes.  It’s no surprise these taxes are not supported by the majority of Californians.

That’s why our state legislators want to keep the truth from you about Proposition 1A and they’ve stacked the deck in their favor.  So when you read the official ballot description of the measure – what should be an objective description on what is being voted on – you will see no mention of the taxes.  The legislative leadership wrote the ballot description themselves and intentionally omitted any reference to the tax increase extension.  They made sure what you read is biased.

The Yacht Party has been so consumed with tax ideology, as if the only role of government is to decide what not to tax, that they fail to see the spending cap forest through the trees.  Which is fine with me, because as Anthony Wright notes, this cap would painfully ratchet down services and make any economic revival in California extremely difficult.

The revenue forecast amount established by Proposition 1A, which limits spending from the state’s existing tax base, would be significantly below the Governor’s “baseline” spending forecast, a forecast that assumes that the cuts proposed by the Governor in his New Year’s Eve budget release continue. For example, in 2010-11, the first year when the Director of Finance would be required to calculate whether the state has received “unanticipated revenues,” the revenue cap would be an estimated $16 billion lower than the Governor’s “baseline” spending estimate for the same year. The gap would widen in 2011-12 and 2012-13 to $17 billion and $21 billion, respectively.

By basing the new cap on a level of revenues that is insufficient to pay for the current level of programs and services, Proposition 1A would limit the state’s ability to restore reductions made during the current downturn out of existing revenues […]

Proposition 1A limits the amount that can be used from the reserve in “bad budget” years to the difference between anticipated revenues and prior year’s spending adjusted for population growth and the CPI. It does not allow the reserve to be used to support a “current services” or “baseline” budget, even if sufficient funds would be available in the reserve to do so. The discrepancy arises from the fact that the CPI – the inflation measure used by Proposition 1A – is designed to measure changes in the cost of goods purchased by households, not governments.

Thus, the CPI does not accurately measure the year-to-year increase in the cost of delivering the same level of public services. Specifically, the CPI does not take into account the fact that government spends a larger share of its budget on items – such as health care – for which costs have risen faster than the rate of inflation. Between 1990 and 2007, for example, national per capita health care expenditures more than doubled, rising by 164 percent, while the CPI for California, which measures inflation in households’ purchases, rose by just 61 percent.

The particular concern for health care is noteworthy. If the formulas in Prop 1A don’t take into account medical inflation, an aging population, or other impacts–like the erosion of employer-based health coverage–then existing health programs are threatened.

Read the whole thing.  These are the guts of this awful deal, what you won’t hear when you call your legislator and they use buzzwords like “rainy day fund.”  At a time when the health care system in California frays at the edges, this spending cap would ultimately stop any progressive reform on anything that costs money, bottom line.  The executive under 1A gets all kinds of new powers to make cuts, and absolutely none to raise revenues.  It’s Prop. 13 on steroids.  That’s why the Governor likes it so much.

But 1A has been structured to sidestep vigorous opposition through a series of bribes, particularly to the teacher’s union.  Prop. 1B, which would repay $9.3 billion dollars to schools starting in 2011-2012 can only pass if Prop. 1A passes.  This has led the CTA to support all six budget measures on the May ballot, severing the united front that labor used to beat Arnold’s special election measures in 2005.  Interestingly, the California Federation of Teachers (CFT) will only support Prop. 1B, and in a pique of schizophrenia, denounced 1A as a “power grab” by the Governor.

Of course, the CFT is substantially smaller than CTA.  And while the California Nurses Association’s opposition to the whole special election ballot is noble and appreciated, ultimately some of the stakeholders with money will need to enter the arena.  We leave a shameful legacy to the children of this state if the spending cap passes.