Ballot Measures Fail, What's Next For State Budget?
As widely expected, five ballot propositions looking to pump money into state coffers were trounced by voters last night.
The propositions offered up extended sales tax increases, reallocated funds and even proposed borrowing against future lottery proceeds. Those ideas were unanimously shot down with 65% of the vote opposing.
The only proposition that did pass was 1F, which limited pay increases for legislators in deficit years.
As a result, the impending $21 billion state budget deficit will have to be dealt with using current monetary resources.
The showdown in Sacramento has begun.
Opinions vary on how exactly California can right its financial woes, although most ideas contain a dose of reform, cuts and in some case, borrowing.
Governor Arnold Schwarzenegger, a firm proponent of the failed propositions, has released his plan on where he would like to start:
- Obtain up to $6 billion through a Revenue Anticipation Warrant that will help the state avoid deeper cuts to vital state programs and services.
- Health and Human Services makes up the second-largest part of California's General Fund, meaning the state must find savings in social, developmental and health care services. Examples include reducing funding for Healthy Families, rolling back the rate increase for Family Planning Services and reducing Medi-Cal payments to private hospitals by 10 percent.
- When California's revenues fall, so does the formula for education spending, translating to a $3 billion reduction in education spending. This could mean a school year shortened by five days.
- Delay all repairs to the State Capitol for one year.
Assemblyman Cameron Smyth, who represents us in Santa Clarita, said that Tuesday's vote speaks loudly to state legislators.
"I think the voters made a pretty clear statement that they do not want their taxes increased and they don't want their money being spent in ways that are unmanageable," said Smyth. "We have to hear that message and really look at ways to control spending here in the state and we're going to have to make some cuts."
Along with cuts, Smyth hopes to see renewed discussion on the topic of reform.
"We've been trying to push for long term reform for several years, and you hope that now the days of gimmicking, taxes, borrowing, bonding and all these things that have been done in years past to try to band-aid our budget process, that now is the time to actually implement real reforms so we don't face this in future years in California."
On the other side of the isle, Democratic Assembly member Noreen Evans, Chair of the Budget Conference Committee issued a statement saying that every option for fixing the state budget must be left on the table:
"We have an awesome challenge ahead of us. We must fix an enormous gap in our budget that follows years of sustained cuts, with less time and fewer options.
Now more than ever, everyone has a reason to be frustrated, sad or angry about our state budget. But we must get past these emotions to find the courage and creativity to solve our budget problem. Unfortunately, I fear some of my colleagues will look at the special election results and conclude that the public will punish any legislator who tries to fix our state's budget problems. As our state teeters on the verge of financial collapse, every potential solution must be on the table.
As the Chair of the Budget Conference Committee, I look forward to working with the Governor and legislative leaders to craft a budget that resolves this budget crisis fairly. We will be meeting this week to look at the Governor's May budget proposals, our state's finances, and hear from the public about the road ahead. A lot is on the line and we have no time to lose."
Even those outside of the state's legislative offices are offering advice for how to move the state forward. Former assemblyman and current Los Angeles County 5th District Supervisor Michael Antonovich proposes creating a blue ribbon commission made up of five-members from the top business schools to develop significant structural and procedural reforms including:
- Consolidating and eliminating state agencies with duplicative responsibilities;
- Crafting a 2-year budget, which Antonovich believes will enable a consistent funding stream for local governments to prepare their own financial agenda for public safety, schools, libraries and parks;
- Eliminating non-essential commissions;
- Replacement of salaried commission posts with a $100 stipend per-meeting;
- Exploring the concept of a part-time legislature, which Antonovich says will allow citizen lawmakers to bring professional experience to the legislative process and reduce the high costs for excessive legislation;
- Repealing term limits to combat instability and inexperience in the legislature;
- Reforming civil service.
Today, U.S. Rep. Howard P. “Buck” McKeon issued the following statement on the results of California Special Election:
“California voters made a clear statement last night that they want a government that is fiscally responsible that maintains a balanced budget, without shouldering taxpayers with an additional burden. They want it nationally and, clearly, at the state level.
“The state is facing a $21 billion deficit and voters are asking the right questions: how this happened and what is the best way to fix the problem. They’ve also made it clear they won’t be forced into hasty votes that would allocate millions in additional taxpayer funds to ‘bailout’ the legislature. As it stands now, California residents pay some of the highest taxes in the entire country.
“Unfortunately, Californians have lost faith in how Sacramento is governing, but I think this outstanding victory for taxpayers and defeat for the state reveals a real opportunity to make some tough decisions and core changes in the state’s fiscal policy and fiscal restraint.”
Just last week Governor Schwarzenegger released the May revise of his proposed budget, which will likely serve as the foundation of deficit negotiations in the near future.