Starry Wisdom

So, I failed in my quest to babble about all six ballot props, but you can rest assured that 1E was as misguided as the rest of them. I guess the populace wasn’t really hearing it either, since the results of the election were pretty pathetic (source: Secretary of State’s Web Site):

The only thing that passed is the “useless anyway you look at it” Proposition 1F. But really as a whole, you can see this election as a referendum on the Legislature. They aren’t doing what we are electing them to do, and I hope that people remember this at the next general election and vote them out. In the meanwhile, maybe they’ll do their job. This goes double for the GOP members who have to learn that occasionally one must “disagree and commit”.

I’m going to go out of order here and post about 1F before doing 1D and 1E in the next day or two.

Here is the text of 1F from the ballot:

Proposition 1F. Elected Officials’ Salaries. Prevents Pay Increases During Budget Deficit Years — State of California (Legislative Constitutional Amendment – Majority Approval Required)
Encourages balanced state budgets by preventing elected Members of the Legislature and statewide constitutional officers, including the Governor, from receiving pay raises in years when the state is running a deficit. Directs the Director of Finance to determine whether a given year is a deficit year. Prevents the Citizens Compensation Commission from increasing elected officials’ salaries in years when the state Special Fund for Economic Uncertainties is in the negative by an amount equal to or greater than one percent of the General Fund. Fiscal Impact: Minor state savings related to elected state officials’ salaries in some cases when the state is expected to end the year with a budget deficit.

I guess I can’t really argue with this in substance. There is nothing wrong with the Legislature not getting raises in deficit years, but this is also a brain dead amendment which we shouldn’t need. Putting this on the ballot is to let the electorate pat themselves son the back and make them feel like they did something good – although, as Chris Rock says, you don’t give people credit for not doing what their not supposed to do.

It seems that there is a pretty good chance that this is the only measure that will pass. And well, I don’t really care either way on it. It’s not going to really fix anything, but it won’t hurt either. So yea, let’s all feel-good!

From what I can tell, the Lottery in California is considered to be a failure. It passed in 1984 (Prop 37) as a way to raise more money for education without raising taxes, but the general sentiment is that it hasn’t been particular effective. And because of this, the legislature now wants to bet that it will be successful in the future, and borrow against this future success. Oh, and and the same time, the limitation towards only spending the proceeds towards education is going to go away. Instead the legislature would need to appropriate general fund revenues equal to the 2009-2009 lottery year (adjusted for inflation, student counts, etc) per perpetuity. So, a bumper crop of lottery would mean nary for education.

The real purpose of this bill is to allow deficit spending (a violation of the current balanced budget amendment passed in Prop 58). Borrowing agains the future to pay the present is clearly the proper solution to any sort of budget. Never mind that future revenues are unpredictable. Never mind that the reason the lottery likely passed in the first place was that it was designed to fund ONLY education. It’s just “slight of math” to look impressive and do nothing of true value.

Warning – ranty post below.

Originally I planned to write an entry for each of the six ballot propositions, and explore them separately, but there is no separating 1B from 1A (for reasons tobeexplained below) so I am going to treat them as a package.

First of all, let’s look at the two measures as they appear on the ballot:

Proposition 1A. State Budget. Changes California Budget Process. Limits State Spending. Increases “Rainy Day” Budget Stabilization Fund — State of California (Legislative Constitutional Amendment – Majority Approval Required)
Changes the budget process. Could limit future deficits and spending by increasing the size of the state “rainy day” fund and requiring above-average revenues to be deposited into it, for use during economic downturns and other purposes.

Proposition 1B. Education Funding. Payment Plan — State of California (Legislative Constitutional Amendment – Majority Approval Required)
Requires supplemental payments to local school districts and community colleges to address recent budget cuts.

Now, something important that does not come across from these is that 1B can only be enacted if 1A also passes. The relevant text in 1B, for the record:

Measure Linked to Proposition 1A. The funding mechanism for making the supplemental payments established in this measure is provided in Proposition 1A, also on this ballot. That measure establishes a Supplemental Education Payment Account and requires the state to annually deposit 1.5 percent of General Fund revenues into the account, beginning in 2011–12. These funds would be put into the account annually until the entire $9.3 billion in supplemental payments had been provided. If Proposition 1A is not approved by the voters, the provisions of this measure would not go into effect, and there would be no obligation to make $9.3 billion in supplemental payments. situation. Method of Paying Maintenance Factor Also Unclear. The second issue relates to how the maintenance factor (from previous years) is paid in a Test 1 year. One interpretation is that maintenance factor payments are to be made on top of the Test 1 level. A second interpretation is that maintenance factor payments are to be made on top of the Test 2 level. Because the Test 1 level is expected to be significantly higher than the Test 2 level in 2009–10, the first interpretation could result in a significantly higher minimum guarantee in 2009–10.

Basically, this is candy thrown at the teacher’s union to get them to support 1A, which is really not in the citizens’ true interest to support. As things are now, the budget is full of obscure formulas amended to the constitution by previous voter propositions (including 98, and 13). 1A uses a linear regression to determine the historic trends that would contribute to this new “rainy day fund”, which is not inherently bad, but it is math that is above what most people care to understand. It also is full of ifs and maybes, and new taxes (which I mentioned before – increased sales tax and personal income tax – while at the same time corporate income tax is being cut). I am not inherently against new taxes, of course, but the places where the taxes are added and where they are cut seem to be misguided, and are only there because the Republican minority only cares about Big Business, as opposed to the Democratic majority who care about Big Business and the common citizen (a small but important difference).

Anyway, here’s the thing – legislators are elected to do a job. The job description includes creating the state budget. They fail at their job, and they expect the people who elected them to come save them. That’s just ludicrous. They think that having the budget 100% codified in the state constitution will protect their interests – and maybe it would protect some GOP interests, but it’s not the way you run a state. You can’t codify any situation, and it seems like all this work is to prevent a problem that already happened, without dealing with the possibilities of other problems. It’s a so-called “band-aid’ solution – cover up the wound, pretend it has gone away, and meanwhile the state bleeds out.

In my work experience I’ve heard a phrase “disagree and commit” this is something one might do when they realize that the majority is against them in a situation, they want to make it known that they are against what is going on, but that they will commit to doing what the majority is for to the best of their ability. If the minority of the state legislature had a microgram of honor or respectability in them they would do this very thing in order to pass a budget – then they could say “I told you so” if and when it failed, and then get big gains in the next election. Of course they know that’s not going to happen because most of the state does not believe in their policies, but because of Prop 13, they can throw a childish hissy fit and shoehorn their way in.

I want to be clear, I’m all for giving money to education, and I respect the idea of prop 1B (if not the means that would get the end) but this is a case where I firmly believe the means do not justify the end. The only way to fix education and the budget over all is with real reform – probably repealing all the budget related amendments and amending the Constitution to make ballot prop amendments much harder to initiate and pass. I firmly believe the populists who created the California ballot initiative system had the best interest of the population in heart, but were rather shortsighted and did not see how easily it could be exploited.

Another argument against these overall is that the amendments that we already have aren’t even being properly followed. 1B is basically a “catch-up” proposition for the twenty year old Prop 98, which mandated K-14 spending which just didn’t happen. Why should we believe that anything else that is codified in the constitution will happen (well that’s not in Prop 13, which clearly does happen).

Basically, since I don’t believe in 1A at all, that also means that I am against 1B, although I am not strongly against it. It’s all shell games though, and the best way to win those is not to play.

Ok, I promised to write more about this, so I will. The reason why we have to have this special election rather disgusts me. Basically, it is a kowtow to the minority Republicans in the state legislature, who really only have one goal – to lower taxes for corporations. This is clear because the budget that was provisionally passed (more on this in a bit) includes lots of cuts in services, while at the same time lowering corporate taxes permanently, but allowing for personal income tax to increase. This is simply amazing. And the reason why they were able to this is that the budget requires a two-thirds vote to pass, thanks to Prop 13, and of course the state needs a balanced budget because unlike the US government California cannot print money.

So the state needed to pass a budget because otherwise no one would get paid (including people getting tax refunds) and to pass a budget, the Governor and majority had to deal with the minority. And the way the deal worked out was “we will pass this budget, but we need a special election with the following constitutional amendments on it, and if they don’t pass, the budget is toast come February.” And what do they all contain? More constraints on how money is spent, and backdoors for lowering taxes when times are good (we’ll talk about this when I discuss 1A).

There is a second demon from Prop 13 that has lead to this path, of course. The property tax limitations limits income when times are rough – the state’s main and pretty much only way to generate revenue is via personal income tax, because corporate income tax gets axed by the Republican minority, and because corporate property is taxed at its value in the 1970s.

What to do? Start over. Raise the constitution and reconvene to make it new. Not going to happen, but I think that’s the only solution. Note this is basically a rant, and not really meant as anything else. Useful information in this series will begin in my next post on the subject, to discuss Prop 1A.

30 years ago Prop 13 passed in California, ballot measure that basically limited property tax, but also made almost anything to do with collecting or spending revenue in CA impossible. Now, partly because of the stipulations of this ammendment to the state constitution, we have a special election next month.

Over the next couple of weeks, I am going to go over the 6 ballot initiatives. Now, I reckon that the majority of my dozen or so readers don’t care a bit about this, but that’s OK, because this is more an exercise for myself than anything else – I want to know what the effects of these ballot initiatives will really be, but I also intend to dig in to the strange situation that led to this election, which is basically fallout from the way budgets must be passed. More on this tonight.