The Jury Talks Back

5/14/2009

California special election endorsements

Filed under: Blogging Matters — aphrael @ 5:51 pm

California is having a special election next week on a set of budget-related propositions. Turnout is expected to be low, but I will (of course) be voting. :)

I’m voting yes on 1A, 1D, and 1E; and no on 1B, 1C, and 1F.

Here’s why.

Proposition 1A

The underlying premise behind Proposition 1A is that California’s recurrent budget problems are, in part, caused by the Legislature’s tendency to react to short-term, temporary upsurges in revenue by committing the revenue to long-term continuous spending, which then must be cut when revenue inevitably falters. In order to solve that problem, it proposes diverting “unexpected revnue” – which is to say, revenue that is (a) not the result of a newly imposed tax and (b) above the amount predicted by a ten-year trendline – into a rainy day fund and, once that has filled up, using it to either pay down debt or pay for short-term infrastructure projects that don’t constitute long-term commitments. In addition, it suggests enlarging the rainy day fund and making it harder to divert money out of it.

All of these are eminently reasonable ideas. They’re all eminently reasonable ideas even if you don’t believe in the underlying premise; if the underlying premise is wrong, this is harmless at best, and saving more money for a rainy day seems like a wise move.

Yet, amazingly, conservatives and liberals have banded together to oppose it. Liberals are opposing it because they think it will result in severe cuts to existing programs. If you listen to their rhetoric, they’ve become convinced that the measure embodies a draconian spending cap … but it actually does no such thing; as far as I can tell, the activists are just deluded.

Conservatives seem to be opposing it because the legislature passed a measure which would extend certain taxes for several years if proposition 1A passes. This measure is nothing more than a tax increase in disguise, the reasoning goes, so it should be voted down. But … the tax increases aren’t actually in the measure. And even if they were: they’re a short-term continuation of taxes already enacted … in exchange for a long-term change in the way the state does business which conservatives have been agitating for for years. It doesn’t go as far as conservatives would like (it doesn’t apply to newly enacted taxes, and it doesn’t enact a spending cap), but surely half a loaf is better than none; as far as I can tell, conservative activist opposition to this measure is firmly in “cut off your nose to spite your face” territory.

Proposition 1A isn’t a cure-all; but it’s a rare good idea and deserves our support.

Proposition 1B

The underlying premise behind Proposition 1B is that an ambiguous provision of Proposition 98 was obviously intended to guarantee money to the schools.

Proposition 98 set up three ways to calculate the amount of money the public schools are required to get. One of them – heretofore only used in the first year after adoption – is a flat percentage of the state budget. The one normally used is the base year’s school funding adjusted for inflation and population growth. The ‘normal exception’, used when revenue is less than expected, is the base year’s funding adjusted for revenue growth and population growth … and the provision allowing that requires that the difference between the two be considered, in effect, a loan from the schools, payable in some future year.

Proposition 98 was silent on whether, in years when the flat percentage is used, the difference between the flat percentage and the normal amount is to be considered a loan from the schools (there’s a lawsuit pending which might answer the question in a year or five). I don’t understand the rules for determining which amount is required to go to the schools in any year; but I know that the flat percentage is the amount required for both 2008-2009 and 2009-2010.

Proposition 1B simply declares that the difference between the amount the schools received in those fiscal years and the amount they would have received under the normal calculations is owed to the schools, and sets up a mechanism for repaying the money using the enlarged rainy day fund established by Proposition 1A. It does not answer the question about whether the schools are owed money if the flat percentage method of calculating school funding is used in the future, and it does <em>not</em> provide a mechanism for paying the owed money if Proposition 1A fails.

This is badly written law. It’s badly written because it can theoretically create a debt that cannot be repaid (if Proposition 1A fails); it’s badly written, also, because it answers a serious legal question just for this instance of the problem without even seeking to resolve the problem in general.

As badly written law, it deserves to be defeated.

Proposition 1C

The underlying premise behind proposition 1C is that it would be a great thing if we could securitize the lottery revenue stream, and sell it off for some large chunk of money which we could spend this year. I think this is crazy; it’s effectively borrowing against future revenue, spending it on ongoing recurring expenses today. Once the influx of money we expect to come today is spent, how do we pay for those recurring expenses? Worse, since the measure is set up to have a neutral effect on the current recipients of lottery revenue, it increases long-term expenditures out of the general fund without providing any long-term revenue source to pay for them.

It might be reasonable if we were borrowing against future revenue to pay for recovery from a natural disaster, or to invest in something which would increase revenue in the future. But we’re not. This is exactly the kind of borrowing which a wise steward of the public funds does not do.

The problem, of course, is that the legislature is not a wise steward of the public funds, and the 2009-2010 budget assumes that this will pass and depends on it to generate $5 billion which can be spent in that fiscal year. If this fails, the budget deficit automatically increases. Still … that’s not enough of a reason to vote for this bad idea; borrowing to pay for continuing expenses is almost always a dumb move.

Propositions 1D and 1E

The underlying premise behind propositions 1D and 1E is that special tax revenue should be confiscated and directed towards similar programs paid for out of the general fund.

California voters have adopted a plethora of special taxes, the revenue from which goes to programs specified in the initiatives which created the taxes and is excluded from the general fund. Some of these special funds have surpluses of unspent money. Some of them are funding programs which are similar to, but not quite the same as, programs which are paid for out of the general fund. Proposition 1D deals with a tobacco tax that pays for health care programs for children under the age of 5; it confiscates the surplus in the special fund and redirects roughly 1/3 of the tax revenue towards other health care programs for children under the age of 5 which are funded out of the general fund, thereby freeing up general fund revenue to do other things. Proposition 1E deals with a tax on incomes greater than $1 million that pays for mental health programs; it confiscates roughly 1/3 of that tax and directs it towards a different set of mental health programs which are paid for out of the general fund, thereby freeing money from the general fund to go towards other things.

I have a bias here: I think that special taxes are almost always a bad idea; they constrain the legislature and make it impossible for the legislature to make policy choices about what the state should pay for … and thereby make the process of producing a budget much more difficult than it ought to be. So I’m greatly in favor of <em>anything</em> which redirects special tax money into the general fund.

That said, I can understand why people would vote against these if (a) they think the particular programs protected by them are really, really important or (b) they have a philosophical objection to passing a special tax and then converting it to a general tax (as an end-run around the voters); my husband is in the latter category.

Proposition 1F

The underlying premise behind Proposition 1F is that the legislature are a bunch of venial jerks whose incompetence is the primary cause of the budget crisis. Since their failure caused the problem, and self-interest might cause them to perform better, we should prohibit them from getting pay raises whenever there is a deficit.

This seems silly to me. *I* think the underlying cause of the state’s budget problems is that the voters want both lower taxes and higher services (something which is borne out by poll after poll that show that the majority of voters want the budget problem solved without tax increases *and* object to any specific cuts that anyone proposes); the legislature is simply representing its constituents. The problem is aggravated by the state’s direct democracy system, which encourages the voters to write into the state constitution things which, aggregated together, make the system unworkable. Punishing the legislators might make the voters feel good, but it doesn’t solve the problem; it’s an angry gesture that, at the end of the day, doesn’t help at all.

17 Comments

  1. You’ll prevail on 1B and 1C only (thankfully).

    Comment by ManlyDad — 5/14/2009 @ 8:21 pm

  2. Care to explain the (thankfully) with reasoning as to why I – or anyone reading – should vote differently?

    Comment by aphrael — 5/14/2009 @ 9:48 pm

  3. I agree that the voters are a large problem why CA is in this financial mess. However, I do blame the legislators as well. Their constituents are not the common voters so much as the unions/special interest groups. Take the race in LA between Bernard Parks and Mark Ridley Thomas. Parks was soundly defeated because the unions united around Thomas. If anything would fix CA, it would be disbanding the most powerful unions, starting with the teachers union and the prison guards union. In a time when people are being laid off in the private sector and state employees are whining about furloughs and having hours cut to save their fellow coworkers’ jobs, I see no reason to enable CA’s government by continuing the high taxes we’re currently paying. Besides, when have taxes EVER been short term? I won’t be surprised when the extra 1% we’re paying in sales tax doesn’t ever go away. (Wasn’t one of Arnold’s earlier propositions in the other special election a rainy day fund? I don’t remember if it passed or not. But even if it did and we had a rainy day fund, what would stop the legislature from raiding it for the general fund? They already do that with the gas tax and want to do that with 2 other propositions in THIS election.)

    As for 1F, I wouldn’t put it past the legislature giving itself a pay raise when there’s a fiscal mess like there is now. In the larger picture, Congress has already done that. The economy is spiraling downward without anything to stop it and Pelosi et al have given themselves a raise. And now that has reminded me – Karen Bass gave the Democratic aides in the legislature a raise (ok, so not technically the legislature themselves). After the initial outcry she retracted the raises, but that proves to me the legislature would give themselves raises even if there was no more money to be had.

    I already voted NO on all of the propositions. (Including 1F mostly because I know even if/when it does pass, the legislature will find a way around it.)

    Comment by wherestherum — 5/14/2009 @ 10:28 pm

  4. (a) the legislature doesn’t determine legislative salary; the voters subcontracted that out to an independent commission years ago.

    (b) the taxes have an expiration date written into the law; in order to extend them, proponents would need a 2/3 majority, just like they needed one to pass them in the first place (unless that provision of the state constitution gets repealed).

    Comment by aphrael — 5/14/2009 @ 10:30 pm

  5. As to 1A, taxes are killing the California economy. State government MUST be reduced quickly and, because it has grown so very much under the governor who was going to ‘blow up boxes’, severely. Myself, I can pay the taxes and reduce my standard of living. But I have secure income. Most of my fellow residents are not so fortunate. Jobs are moving out of the state at an increasing rate, taxpayers are leaving (!) and 1A only accelerates the shift. The more jobs leave, the weaker the tax base. So far, our leaders’ only response has been–more taxes!

    You realize that, even as this crisis has grown, state government has actually GROWN a bit? The ‘cuts’ are only reductions in increases, not actual reductions from the planned budget.

    As to the other ones, I make the call based on polls. 1A is the only vital one. 1F is a silly attempt to make the batch of measures look like they are squashing down the politicians. A pay raise is small stuff in a delayed budget, would probably not be implemented anyway (as we see Speaker Bass revoking her own increases to her staff.)

    The gov and politicos talk about drastic reductions in education, fire fighting, prisons. Not a peep about tuition for illegals, med care for illegals, welfare for illegals. Gotta keep the $6 billion stem cell research going (even though private investors are doing fine work elsewhere at no taxpayer cost). Gotta fight globaloney warming (as if better air in CA could fix the world’s weather).

    Bottom line: the state must respond to economic variances like any business or family. It hasn’t done so, doesn’t seem to plan to do so, and–no matter what happens–continues to grow!

    I appreciate your detailed explanations, even though you are wrong. (Turnout will be extraordinarily low, but I’m thinking it has already been determined by absentee voters. Like me!)

    (Glory be! Tonight for the first time I heard our Gov talk about $2 billion from offshore drilling. Maybe the pressure has at last gotten to them!)

    Comment by ManlyDad — 5/14/2009 @ 10:39 pm

  6. I accept your point B, aphrael, however, I don’t trust the Republicans in the legislature to stop the 2/3 vote and repeal the tax increase. As was evidenced by the Republicans having colluded to see who was the least vulnerable in an election and giving the Democrats the needed majority to hike the taxes.

    Comment by wherestherum — 5/14/2009 @ 10:46 pm

  7. as usual, after i read the propositions, i vote, to a certain extent, based upon who’s supporting them, and the language they use in their arguments.

    i’m voting no on all of them. what’s wrong with CA will only be fixed when reality gets to painful for the masses that voted for all these fools. no more band-aids.

    Comment by redc1c4 — 5/15/2009 @ 8:24 am

  8. Aphrael – Thank you for the detailed post. I too have voted against most of the measures, except for F – and although I know that it is insignificant, it does drive home the message to the legislators that the populace is angry at them. When they’re scared, sometimes they behave.

    I must agree with the rest of the commenters – the CA government has grown too large, and wastes far too much money. I also have not seen talk of reductions in social services or the deportation of criminal illegals in the justice system. We continue to increase the density of the population without planning for increased water and power usage. Like many Californians, I am tired of allocating tax money to interest groups even while revenues are dropping.

    The reason the decisions have been removed from the legislators is due to their prior inability to run a functional government. The fixed allocation of funds isn’t an accident. It is due to their prior poor performance.

    They have to cut government – not just reduce the increase, but cut government.

    Comment by Apogee — 5/15/2009 @ 5:51 pm

  9. I also am voting no on everything except 1F.

    Like an alcoholic, California must hit rock bottom before it can choose to make fixes. It must collapse and fail to meet its obligations before it will take the necessary steps which are both many and obvious.

    Comment by luagha — 5/16/2009 @ 9:48 am

  10. […] I should have noted this before, but our occasional visitor Aphrael, who has pretty much abandoned his own blog — which I’m going to delete from the blogroll due to its inactivity — has a forum in which he’ll get a lot more readers: Patterico’s The Jury Talks Back sideblog. His latest article, concerning California’s multiple ballot initiatives, is here. […]

    Pingback by Common Sense Political Thought » Blog Archive » Aphrael’s sideblog gig — 5/17/2009 @ 8:39 am

  11. Aphrael, I enjoyed your thoughtful post on how you voted or plan to vote this Tuesday. I already voted via absentee ballot, and I marked my ballot the same way that you plan to with the notable exception of my “No” vote on 1A. My reason for voting no is simple: I do not trust the legislators to abide by the alleged spending cap that the measure would impose. To support my cynicism, I would point out California has enacted spending caps in the past, but the governors, legislators, and lobbyists have always found a way to get around them. You can’t convince me that the very same people who have drafted the language of Proposition 1A don’t know exactly where the loopholes exist and how they will keep the money spigot flowing.

    I don’t enter into this decision easily; I recognize that this will plunge the state into a certain level of chaos. I think at this point what needs to happen is that we need to start over from scratch and rewrite the state’s constitution in order to address some of these long-festering problems. I have some ideas as to how liberals and conservatives can compromise on some basic ideas, though I won’t bore everyone with them here.

    As a final reason for voting no on 1A, I would point to this article which points out that even with Prop 1A passing, the deficit will still be $15 billion (instead of $21 billion if it fails). Clearly Prop 1A is little more than rearranging deck chairs on The Titanic.

    Comment by JVW — 5/17/2009 @ 11:37 am

  12. aphrael,

    I’m impressed with the time, thought and effort you’ve spent on analyzing this election and explaining how you will vote. It’s a lot to wade through and, now that I’ve read it, I’m glad the elections in my state are like a first grade reader compared to this.

    Comment by DRJ — 5/17/2009 @ 5:06 pm

  13. #2: whining about furloughs and having hours cut to save their fellow coworkers’ jobs

    I have some sympathy; in addition to being a part-time student, I’m a full-time computer programmer … and my salary was cut by 5% this year in addition to some random furloughs. I’m glad to have a job, and I understand the economics forcing the company to do what it’s doing, but I’m also perfectly happy to whine about it. :)

    #5: 1A is the only vital one

    That depends on what you mean by ‘vital’. 1C is the only one which will actually have a significant impact on the 2009-2010 budget. 1A is the one which will probably have the largest long-term impact, however.

    Not a peep about tuition for illegals, med care for illegals, welfare for illegals

    I believe that a federal court has already ordered us not to do that, when handling the appeals coming out of a ballot proposition passed fifteen (or so) years ago.

    Gotta keep the $6 billion stem cell research going

    The legislature cannot change that without going to the voters, since the program was mandated by a voter-initiated ballot initiative.

    #7: what’s wrong with CA will only be fixed when reality gets to painful for the masses that voted for all these fools

    Amusingly and frustratingly, activists on the left believe the same thing … they just expect a different outcome once things get too painful. One group or the other must be wrong.

    That said, there’s something quite nihilistic about this: engaging in behavior intended to make things worse so that things can get better after they get worse is sorta like burning down the house so that we can build a new one. It’s terribly destructive and will result in many people getting hurt.

    #9: I have some ideas as to how liberals and conservatives can compromise on some basic ideas

    I think that would be a good conversation to have.

    Comment by aphrael — 5/18/2009 @ 6:28 am

  14. Aphrael – there’s something quite nihilistic about this: engaging in behavior intended to make things worse so that things can get better…

    I disagree. I am anything but a nihilist about this, and do not want the destruction of the State of California. However, I think you have it backwards. It is the State which is giving us the two choices – Either let us continue our folly or there will be a disaster.

    This is commonplace behavior for the State, and is usually highlighted by the threat to cut Police (Justice system), Fire and Medical – which is again, backwards – we could eliminate almost everything else except those three and we’d be okay as a society.

    This ‘nihilism’ angle is a bluff. They can’t wield the same power from the basic services that they can with all the other BS, and they are loathe to cut that BS because it reduces their control and therefore their power. The voters are tired of their repeated failures.

    P.S. – I believe the redistricting proposition passed in the last election. Why has there been no news on it at all?

    Comment by Apogee — 5/18/2009 @ 10:45 am

  15. The redistricting proposition did pass in the last election. It changed the rules for the next regularly scheduled redistricting, rather than invoking a new one. Which means that there will be news about it after the next census, and the first election under the new district lines will be in 2012.

    I am anything but a nihilist about this, and do not want the destruction of the State of California

    fair enough, but I wasn’t speaking of you as much as I was speaking of comments like this:

    what’s wrong with CA will only be fixed when reality gets to painful for the masses that voted for all these fools.

    and this:

    It must collapse and fail to meet its obligations before it will take the necessary steps which are both many and obvious.

    both of those seem to be calling for California to fail so that, after California fails, we can build a better California.

    Comment by aphrael — 5/18/2009 @ 10:59 am

  16. Aphrael, you have every right to whine about a pay cut and that’s fine. I just have a problem with the teachers bitching about layoffs when not a single teacher has been laid off. And if they do lay them off, they start with the fresh, new ones. People get laid off in the private sector all the time, especially now, but none of them organize and protest in front of their employers. If 1% of all the teachers in LAUSD got laid off, somehow I don’t think LAUSD would collapse without them. They act like it would, though. I also have a problem with said teachers indoctrinating their students and having those students protest for said teachers.

    I’m also tired of the threats to release prisoners and the cutting of police and fire if we don’t hike taxes even more. Fine. Do it all. I double dog dare the legislature and the Governator to do so.

    There’s no doubt CA is broken. Someone needs to quash the tax and spendy-ness of the legislature and do some massive spending cuts, government sector layoffs and tax cuts. Perhaps take the model of a state with lower taxes/spending and try to emulate that. (New Hampshire, anyone?) But I don’t think the legislature really cares what happens as long as they get to stay in power and the money keeps flowing to them.

    I think it was someone at Ace’s who said that for every day the budget isn’t passed, the legislature should be stripped of all its perks: no salary, no per diem, no taxpayer paid car, etc and not be reimbursed a dime of it when the budget does pass. I’d like to see that implemented just to see how the legislature would react.

    Comment by wherestherum — 5/18/2009 @ 12:09 pm

  17. It’s a strange argument for teachers to make to say that they need higher pay to attract better people into the profession. To say that is to say that the people already in the teaching profession aren’t good enough, and therefore need to be replaced. But with teachers being tenured, the only way to get rid of them, absent gross misconduct, is through voluntary resignation. And if we increase their pay, to try and attract better people into the profession, then we discourage the existing teachers from moving on to other jobs, because we’ve increased the rewards for the jobs they have now beyond what they are personally worth.

    Comment by The brutally honest Dana — 5/18/2009 @ 12:31 pm

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