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John Myers Demystifies Under-the-Radar Prop 25, Key Budget-Reform Law

| October 26, 2010
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Proposition 25 lowers the threshold for passage of a state budget from a two-thirds legislative vote requirement to a simple majority. This to me, at least on the surface, would seem to deliver the fundamental budget reform that so many have been calling for.

Yet, compared to the marijuana legalization initiative and the proposition to delay California’s anti-global warming law, the measure has received relatively little attention. And when you consider that passage of the budget was a record 100 days late, I find that odd.

So I asked KQED’s Sacramento bureau chief, John Myers, why the public hasn’t been focused on Proposition 25 and what effect the initiative’s passage might have.

Question:

First off, what are the roots of the 2/3 budget passage law? Is California the only state to require this super-majority for budget passage? And what was the logic behind the change?

John Myers:

Three states in the U.S. require a suprermajority legislative vote to ratify a budget – Arkansas, Rhode Island, and California. California’s mandate dates back to a 1933 ballot measure, significantly modified in 1962, which I wrote about as part of our series, “Governing California: Making Sense of our State of Disarray.”

…by far, the most important change to the budget system was approved by voters in 1933 — a two-thirds vote of each legislative chamber to pass any budget where spending grew by more than 5%.

Not familiar with that 5% caveat? That’s because in 1962, the Legislature placed Proposition 16 on the ballot that made all budgets subject to a two-thirds vote. The rationale was that California’s budget was growing by much more than that every year back then, and the 5% provision was deemed “obsolete.”

But here’s something worth pondering: had the 1933 constitutional amendment been left as it was, the last three state budgets could have been approved by a simple majority vote.

Question:

I have been a little surprised that Proposition 25, which would seem to deliver the “fundamental reform” that every California politician seems obligated to promise these days, has not gotten a lot of attention. When Brown and Whitman are asked how they would fix the budget process, they talk about starting earlier or “making tough decisions.” But they never talk about 25 as the heart of budgetary reform. Why is that?

John Myers:

I suspect that Brown and Whitman are focused on “leadership” as California’s biggest need because systemic reform is complicated. They have taken positions on Prop 25, though; Brown supports it, Whitman opposes it.

This is an unusual election season in which many proposals are getting less attention due to the gubernatorial juggernaut. And Prop 25, whose chances seemed to improve every day the state budget broke new records for being late this summer and fall, has probably needed less explanation — at least on its surface — than most ballot measures.

But I sense that very few die-hard budget critics are happy with Prop 25. Lowering the budget threshold in the statehouse doesn’t guarantee good budgets. And by leaving the supermajority vote in place for a tax increase, some Democrats feel that Prop 25 doesn’t give the majority all of the tools they need to craft comprehensive spending plans. Others criticize Prop 25′s “sweetener,” the provision that strips legislators of their pay for failing to pass a budget on time. And Republicans and anti-tax groups still believe Prop 25 has loopholes that would allow more budget shenanigans than currently exist. So Prop 25 is a bit of a mixed bag, even though its supporters say some fix is better than no fix.

Question:

The latest poll shows Proposition 25 is up by 30%. Does that make it a near-certainty that it will pass?

John Myers:

I wouldn’t say it’s a near certainty at all; those polls also show its actual support at just slightly above 50%. And historically, most ballot measures in California that don’t poll pre-election at 60% or above are rejected on Election Day, because voters often become less enamored as time goes on.

Question:

Often propositions are immediately challenged in court, delaying implementation or even nullifying them. Is there any chance that could happen with this one?

John Myers:

If Prop 25 wins, I think court challenges would be likely only after we see how it impacts next spring’s budget process. For example, Prop 25 says legislators won’t get paid if they don’t approve a budget by June 15, but suppose they pass a completely unrealistic proposal, just as a formality, so that they can keep their paychecks? Prop 25 never actually says the budget passed by legislators to prevent losing their salaries has to be signed into law by the governor.

Anti-tax groups would also closely watch whether anything they consider a tax “increase” is slipped into the budget on a majority vote, something they’d quickly challenge in court. And the real question: if Prop 25 passes and the budget process doesn’t get any better, will voters move to more extreme measures to signal their anger over what happens at the state Capitol?

Question:

I have read that although the proposition keeps in place the 2/3 requirement for the raising of taxes, the legislature could still raise so-called “fees” w/ a simple majority vote. True?

John Myers:

Yes, but only if Proposition 26 is rejected by voters. While the current system allows any proposal for revenue collected through “fees” to be approved by a majority vote, there’s been criticism that the “fee” process is being abused as a way around the higher hurdle to enact taxes. Prop 26 would make more, but not all, fees subject to the same kind of 2/3 vote as taxes.

Question:

Earlier in the year I was reading about an alternative initiative sponsored by the Democratic consultant and UC linguist George Lakoff that would roll back the tax super-majority requirement in addition to the budget passage vote. Whatever happened to that?

John Myers:

There were several versions of the “majority vote” initiative in circulation in 2009 and 2010, and the Lakoff version failed to find financial backing to gather signatures and make it onto the ballot. And the simple reason: taxes. Remember that the 2/3 legislative vote for increasing taxes was created by the landmark 1978 measure Proposition 13, and remains wildly popular with the voters. Any measure that would have made it easier to raise taxes would have been assailed by a number of deep-pocketed interest groups; that’s what happened in 2004, when voters rejected Proposition 56, which would have allowed both budgets and taxes to be subject to a 55% vote in each house of the Legislature. It was defeated on election day by an almost 2-1 margin.

Question:

Okay, but Lakoff argued at the time that simply nixing the budget approval super majority w/o also getting rid of the tax-raising super majority was a trap for Democrats, because then they’d have all the responsibility for the budget w/o the ability to raise revenue. What do you think of that?

John Myers:

That argument is, I believe, at the heart of why some Democrats I’ve spoken to are so lukewarm about Prop 25. But it goes back to the ‘Is something better than nothing?’ argument.

Question:

Who is against 25? Is it almost exlusively Republicans and biz interests?

John Myers:

Yes, Prop 25 is being opposed mainly by the business community… which actually is fighting the battle with both a “No on 25′ and a ‘Yes on 26′ dual campaign. One of the great backstories is that these two measures were part of a fight between organized labor and big business during the 2009 budget fracas. When labor threatened to take the ‘majority vote budget’ measure to the ballot, big business countered with a ‘We’ll make it harder to raise fees’ measure. Both groups gathered signatures and then dared each other to submit them… kind of a ‘mutually assured destruction’ strategy. They both did… and here we are.

Question:

Do you think passage of Prop 25 will actually significantly streamline the budget process?

John Myers:

Prop 25 will no doubt change the dynamic of the annual budget process, and may actually lead to substantive changes. Remember, even with all of the dismal deficits over the last decade, only one budget actually raised taxes; so much of the budget ‘smoke and mirrors’ will become, theoretically, easier.

But I also wonder whether the majority party would start to fracture under the new system — i.e., would moderate Democrats refuse to go along with liberal Democrats? Would even more side deals, appeasing individual legislators in the majority party, have to be included as the pressure turns to only one side of the aisle? And would it exacerbate the annual tensions between the Assembly and Senate, which also seem to slow down the budget process?

Bottom line: Prop 25 will no doubt change the process… the question is, what will that “change” look like?

John Myers is currently working on a piece on Proposition 25 for The California Report.

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Category: Elections, Politics, State Budget

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