Tuesday, April 21, 2009
May 2009 Voter Guide
Six propositions are part of the 2009-2010 California state budget and tax increase agreement (Propositions 1A, 1B, 1C, 1D, 1E and 1F).
Proposition 1A: State Budget NO
This proposition changes the way the California budget process works by increasing the amount of money it contributes into its “rainy day” fund and by limiting how this money can be used. Additionally it extends tax increase in the state by AT LEAST two years. In our troubling economic times we need to be cutting our spending and reducing the tax burden on individuals and businesses. Although the proposition is referred to as a limit on state spending, it does NOTHING to either limit spending or ENCREASE revenue collection (tax increases). By making the “base” spending level during the boom times (housing boom and stock boom that ended in 2007) the spending limits are set too high, and additionally the spending limits are set based on how much revenue (taxes) can be levied without accountability for the actual dollars spent.
Proposition 1B: Education Finance NO
Proposition 1B would mandate supplemental payments of $9.3 billion to schools and community colleges. This proposition, if approved, will only be enacted if 1A passes as it requires extension of the current tax increases. This would essentially drain the rainy day fund. Money is not the problem with the California school system.
Proposition 1C: California State Lottery NO
Proposition 1C would authorize borrowing against future lottery proceeds as a way to avoid state government spending cuts. The 2009-2010 budget plan includes $5 billion from this source, and the measure would also authorize similar borrowing in future years. It does not include a cap on the amount of future lottery revenue that could be pledged to pay for current spending. Essentially, the measure would allow a form of deficit spending that is not subject to the balanced budget provisions adopted by a vote of the people in California Proposition 58 (2004). We don’t need to give the government any other tools to borrow money, especially when this is done in order to avoid cutting in spending.
Proposition 1D: California Children and Families Act: use of funds: services for children NO
To avoid additional cuts in general fund-supported state spending, Proposition 1D would authorize a fund-shift of $268 million in annual tobacco tax revenue currently earmarked for "First Five" early childhood development programs under the terms of California Proposition 10 (1998). That revenue, plus $340 million in unspent "First Five" tobacco tax money now held in a reserve fund, would instead be used to pay for other state government health and human services programs that serve children, including Medicaid, foster care, child care subsidies, preschool programs, and more. Money for these programs currently comes from the state general fund.
Currently, 80 percent of "First Five" money is distributed to county governments for similar programs, including government "school readiness" programs for pre-schoolers, Medicaid health coverage to children whose family income is above the cap for that program, government parent-education training, food and clothing subsidies, and more. Under Proposition 1D, that revenue stream would cease for five years, essentially ending most First Five programs. However, it's likely that the state will use general fund money to continue some of these. For example, a prime candidate would be the "First Five" expanded Medicaid coverage, since under the SCHIP program the federal government pays more than half its cost.
Clearly another means to keep the spending going in California. By diverting funds from needed programs then trying to back fill that money from the general fund? Sounds like robbing Peter to pay Paul.
Proposition 1E: The Mental Health Services Act: Proposition 63 amendments NO
To avoid additional cuts in general fund-supported state spending, Proposition 1E would authorize a fund-shift of approximately $230 million annually in income tax surcharge revenue currently earmarked for specified mental health programs under the terms of California Proposition 63 (2004), also known as the Mental Health Services Act. For two years that revenue would instead be used to pay for the state's share of the "Early Periodic Screening, Diagnosis and Treatment Program," a federally mandated Medicaid program for low income persons under age 21. Revenue for this program currently comes from the state general fund.
The earmarked Proposition 63 (2004) revenue that would be diverted comes from a 1 percent state income tax surcharge imposed on the portion of a taxpayer’s taxable income in excess of $1 million. In the past this surcharge has taken in between $900 million and $1.5 billion annually.
Another means to divert funds. These short term diversions are funded by these temporary tax increases that 1A wants to extend. We should be cutting spending to bring the budget under control not diverting funds around like a shell game.
Proposition 1F: State officer salary increases NO
The measure would prohibit the state commission that sets salary levels for the governor, other top state officials, and members of the California State Legislature (both the state senate and the state assembly) from increasing those salaries if the state General Fund is expected to end the year with a deficit. (Specifically, if the state's Director of Finance reports that there will be "a negative balance in the Special Fund for Economic Uncertainties at the end of that fiscal year.")
California legislators are the highest paid in the nation and at first glance this looks like an appealing proposition, but it’s a paper tiger for a number of reasons. The salaries of these individuals is controlled by California Citizens Compensation Commission, not congress and this commission has never increased salaries in a deficit year. Additionally the increases set by this commission do not take effect until after the next election, so there is not likely to have much effect on the current members.