As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Sunday, March 29, 2009

Richard Riordan Crushes The Special Election Ballot

In an op-ed in today's LA Times, former LA Mayor Richard Riordan doesn't hold back against what he calls California's May ballot scam. Being a Republican, some of the arguments are of the familiar anti-tax stripe. But being a liberal Republican who endorsed Barack Obama for President, he makes some arguments from the Democratic side of things.

Then there's Proposition 1D, with its clunky and dishonest title: "Protects Children's Services Funding. Helps Balance State Budget." How does it "protect" children's services funding? By taking $1.6 billion currently committed to children's health services and preschool and throwing it into the budget maw.

Proposition 1E, "Mental Health Services Funding. Temporary Reallocation," is another travesty. It simply grabs $450 million that voters specifically directed to mental health services.

The May ballot leaves me with some questions for my fellow Californians.

First, to my liberal friends: Can you really support propositions that will drastically cut services to the state's neediest -- especially after legislators increased the state sales tax, a regressive tax that places a larger burden on the poor?

He then makes the discredited argument that rich people will move elsewhere if their taxes become too high. And then he goes on about "restructuring state government," echoing the rhetoric of Mr. Blow Up The Boxes, the guy who, uh, didn't. So it's a mixed bag.

However, there's no question that many of the ballot propositions, particularly 1A, would drastically cut services to the state's neediest. In a new report, The California Budget Project shows that 1A would not impact the continuing revenue shortfall in the state budget, and would in fact exacerbate it:

Proposition 1A would not address California’s existing structural shortfall – the gap between revenues and expenditures – that exists in all but the best budget years. The state’s two long-term budget forecasts, issued by the Legislative Analyst’s Office (LAO) and the Department of Finance, both identify an ongoing gap between revenues and expenditures. Moreover, the Department of Finance’s forecast projects a significant ongoing gap even taking into account the continuation of the spending reductions outlined by the Governor in his proposed 2009-10 budget.

The revenue forecast amount established by Proposition 1A, which limits spending from the state’s existing tax base, would be significantly below the Governor’s “baseline” spending forecast, a forecast that assumes that the cuts proposed by the Governor in his New Year’s Eve budget release continue. For example, in 2010-11, the first year when the Director of Finance would be required to calculate whether the state has received “unanticipated revenues,” the revenue cap would be an estimated $16 billion lower than the Governor’s “baseline” spending estimate for the same year. The gap would widen in 2011-12 and 2012-13 to $17 billion and $21 billion, respectively.

By basing the new cap on a level of revenues that is insufficient to pay for the current level of programs and services, Proposition 1A would limit the state’s ability to restore reductions made during the current downturn out of existing revenues. Had Proposition 1A been in effect during the late 1990s, for example, it would have diverted “unanticipated” revenues from the General Fund in 1995-96 and 1996-97, years when the “expenditure forecast” amount, the test used to trigger the shift of monies out of the General Fund, was below the LAO’s 1995 “current services” forecast for the same fiscal year.

Even in years with budget shortfalls, the so-called "rainy day" fund would need to be enhanced. Considering that we have an aging population in California, with the age group 65 and older projected to grow the fastest over the next decade, anything that dramatically lowers state spending, and nullifies the ability to restore that spending even in a good budget year, will slash services which will only grow more needed in the years to come.

Then there are the other goodies in 1A, like the ability for the Governor to make unilateral mid-year spending cuts. And the fact that the spending formulas are based on estimated and not actual revenues (you've seen this year how they fluctuate wildly). Bet you won't see that on the ballot language.

The May 19 ballot will feature a tiny universe of the state's voters. If this small a subset of the population can make these kind of drastic changes to California's future, we should all be ashamed.

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