I've been on record supporting a special election to get the budget reform California desperately needs - such as scrapping the "two-thirds rule" in the legislature, or helping local governments raise revenue. But now that a statewide election is set for May 19th, no such measures will be on the ballot. Instead, the six propositions we will get to vote on are Schwarzenegger gimmicks that would cripple the state's ability to function, throw us further into debt, and roll back a small handful of fiscal victories. A campaign must start now to urge a "no on everything" vote, repeating the success that progressives had in 2005 by defeating Arnold's special election. The Governor, however, is a lot savvier this time. Prop 1B (which deals with school funding) is a naked ploy to keep teachers from opposing Prop 1A (an awful spending cap), and there's a dangerous possibility that organized labor will sit out this whole election. Democrats are not unified in their opposition, as State Senate President Darrell Steinberg even gave Schwarzenegger cover last week at a press conference when he promoted the "budget reform" package. Only by exposing this election as another Arnold scam can the state come out winning, helping to map a sane fiscal future for California.
Many observers noted the "parallel universe" that California - a very blue state - experienced when it passed Proposition 8 on the same night we elected Barack Obama. Today, it's déjà vu all over again. Nationally, President Obama's budget proposal is a sharp repudiation of the Reagan Era - with progressives on the offensive, and optimistic about the future. But at the state level, right-wing ideologues still dictate our budget policy. Progressives are on the defensive, allowing a Republican Governor to pit constituencies against each other - while some Democrats reluctantly believe our choices are the bad and the worse.
After a grueling process where Republicans (once again!) abused the state's two-thirds vote requirement, Arnold and the legislature finally passed the budget by cutting a deal. In exchange for the necessary GOP votes and the Governor's signature, a special election was called for May 19th to pass some budget "reform." It was a Faustian bargain that cries out the need to scrap the two-thirds rule, and I don't fault Democrats for using any means necessary to pass a state budget. But now that Propositions 1A-1F are on the ballot, voters don't have to approve them - and the Democrats shouldn't encourage them.
Proposition 1A: Spending Cap to Disaster
As I've written before, a spending cap would cripple the state's ability to provide essential services. It's been tried in Colorado, and the results were disastrous. A spending cap would give California a permanent fiscal straitjacket - which is precisely what the right-wing extremists in the legislature have always wanted. All of them signed the infamous Grover Norquist pledge - from the same guy who wants to "shrink the size of government so we can drown it in a bathtub."
Prop 1A creates a spending cap by nearly tripling the amount of revenue that gets locked into the state's Rainy Day Fund - and bars the flexibility to use that money in times of need. It also strictly regulates how the state can spend "unanticipated" revenues. It gives the Governor more power to unilaterally cut certain spending without legislative approval - such as blocking cost-of-living adjustments. Given that Arnold already killed the renters' tax credit for seniors and the disabled, why give him the power to terminate more programs?
A spending cap was the only way Republicans in the legislature would support any tax increases to pass a budget. And it's true that Prop 1A includes several revenue measures: (a) raise the sales tax from 8 to 9%, (b) up the vehicle license fee that Arnold slashed on his first day in office, and (c) raise the income tax on every bracket by 0.25%. But a vote against Prop 1A doesn't stop those tax increases from going into effect; it just means they expire in two years, and there would then be a fight in the legislature to extend them. What is the "upside" if Prop 1A passes? Those taxes would instead sunset in four years - 2013.
Selling out the state's flexibility in exchange for these (mostly regressive) tax increases to stay on the books for an extra two years? Sounds like an awful deal to me. As the Legislative Analyst's Report says, a lot of what Democrats got in Prop 1A is temporary - while the spending cap parts are permanent. "Once these effects have run their course," it said, "Prop 1A could continue to have a substantial effect on the state's budgeting practices."
Proposition 1B: Attempting to Bribe the Teachers' Union
It will take resources to defeat Prop 1A, and getting organized labor (the one progressive institution who can deliver) to oppose it will be essential. Arnold suffered a humiliating blow in 2005 because unions went all out to defeat his special election, but they had good reason to do so: each ballot measure that year was a direct assault on working people.
Schwarzenegger clearly learned from that mistake, which is why Prop 1B was designed to throw a bone at the California Teachers' Association - hoping to keep most unions out of defeating Prop 1A. Prop 1B would guarantee school funding through $9.3 billion in "supplemental payments" - but it only goes into effect if Prop 1A passes.
I'm all for school funding - but at the cost of passing Prop 1A? So far, Arnold's ploy is working. The CTA has offered "interim support" for Prop 1B, while no union has taken a position on Prop 1A. Given the expense of defeating statewide ballot measures, unions are being understandably cautious about entering the fray - unless there's a consensus in the labor movement to defeat Prop 1A. Education advocates should consider that the $9.3 billion in Prop 1B is not an annual appropriation, but doled out over a five to six-year period.
Education is a high budget priority - but so are housing, health care and public transit. Even if Prop 1B guaranteed additional funds for public schools, the straitjacket of Prop 1A means all other issues we hold dear will be sacrificed. It's the classic "divide-and-conquer" strategy Republicans use all the time to keep progressives fighting with each other. While every group is protecting its budget during these tough times, now is not the moment to take the bait. Despite the attractive "sweetener" of 1B, Prop 1A must fail.
Proposition 1C: Arnold's Awful Lottery Idea
This is just the latest in a series of reckless Hollywood gimmicks the Governor has proposed - sinking our state deeper into debt, and strangling our ability to get anything done. Prop 1C would let the state borrow $5 billion against future lottery sales. What will Arnold propose next year - borrow against future tax revenues? Is there any end to our credit card Governor's nerve when it comes to raiding our fiscal future?
Propositions 1D and 1E: Turning Back the Clock
It's rare when California voters approve fiscal measures that both (a) create more revenue and (b) fund good projects. In 1998, voters passed Proposition 10 - a cigarette tax that created a Childrens' Health Fund. In 2004, voters passed Proposition 63 - a 1% tax on millionaires to fund mental health programs. Props 1D and 1E would re-direct these tax revenues - slashing programs voters created for a purpose. Arnold tried to cut funding for mental health before, but Prop 63 prevented him from doing so. We can't let this happen.
Proposition 1F: Do-Nothing Reform
The last measure on the May ballot - Proposition 1F - sounds like a good idea. It would ban statewide elected officials from receiving pay raises if the budget has a deficit. But does anyone honestly believe this is the kind of "structural budget reform" the state needs that would justify an expensive, statewide, off-year special election? Even if it's good public policy, the budget savings are miniscule. This is more about Arnold trying to score political points against the legislature than proposing a sensible long-term solution.
Democrats Have to Stop Being Scared
All too often, liberals get spooked by the state's dire financial situation - agreeing to go along with an awful Republican budget "solution" at the ballot to prevent cuts that affect poor people. In 2004, for example, Arnold proposed two ballot measures - Propositions 58 and 59 - sold as necessary to solving the state's $15 billion deficit. I'm embarrassed to admit I voted for both of them, because I feared what would happen if they failed.
Prop 58 was a $15 billion bond to pay off just one year's budget deficit - which we are now stuck paying interest on. Prop 59 was a state "balanced budget amendment" that has placed California in a permanent fiscal straitjacket. In the long run, was it a good idea to support such a reckless solution? Conventional wisdom at the time was that a "yes" vote would prevent devastating budget cuts. But what if we stood up as a matter of principle?
Assembly Speaker Karen Bass (D-Los Angeles) has sent signals that she won't support the special election measures, and State Senator Loni Hancock (D-Berkeley) has publicly opposed Prop 1A. Democrats are unified about wanting to scrap the "two-thirds rule," but that won't be on the May 19th ballot. And when Arnold had a press conference last week to promote his special election measures, one of the leaders who flanked him was State Senate President Darrell Steinberg (D-Sacramento.)
I like Darrell Steinberg. He's been a champion for mental health funding, and is a vast improvement over his predecessor, Don Perata. But standing next to Schwarzenegger to promote a reckless special election with no budget solutions to vote for was disgraceful. Props 1A-1F must be defeated, because they would wreak long-term havoc on the state. They are awful Republican solutions, and Schwarzenegger should be left alone to defend them.
Because if Democrats unify to sink these ballot measures (with substantial help from labor), Arnold will have to own these defeats - just like he did in 2005. And when we have to go back to the drawing board, progressives will have the upper hand. Unless, of course, too many Democrats went along to support these failed proposals.
Paul Hogarth is the Managing Editor of Beyond Chron, San Francisco's Alternative Online Daily, where this piece was first published.