Nearly one month into the new fiscal year that began on July 1, there
is growing concern that Democrat leaders will attempt an end-run around
the Proposition 13 requirement that tax increases must be approved with
a two-thirds vote of the Legislature.
The state faces a $19 billion budget deficit, but instead of cutting
waste and out-of-control spending, Democrats are looking for schemes to
increase taxes with a simple majority vote.
This wouldn’t be the first time the Democrats have tried an end-run
around the state Constitution. In January 2009, they tried to pass
billions in tax increases with a majority vote. The Howard Jarvis
Taxpayers Association filed a lawsuit against these unconstitutional
tax increases, and almost immediately the Governor announced he would
veto the plan.
We will be keeping a close watch on the budget and tax discussions
going on in the Capitol, and will be ready to defend Proposition 13 if
legislators dream up other creative schemes to increase taxes without a
two-thirds vote. Moreover, it has not gone unnoticed that the
Legislature has already approved a majority vote "tax swap" that, for
state budgetary purposes, is on shaky legal footing.
But the most significant issue involving the two-thirds vote is, of
course, the looming battle over Proposition 25. This measure claims
that it will only impact the vote threshold for the state budget, not
the vote threshold for tax increases. Moreover, as an enticement, the
proposal seeks to "punish" legislators by docking their pay for every
day that the budget is late — a populist provision designed to give
Prop 25 grassroots appeal. But if Prop 25 passes, the only group who
will be punished are the taxpayers themselves.
While claiming that it doesn’t affect the two-thirds vote for a tax
hike, a growing consensus among budget analysts and legal experts is
that, intentional or not, Prop 25 would in fact lower this threshold.
This is because Prop 25 creates and defines in the state Constitution a
distinct type of bill — "bills providing for appropriations related to
the budget bill" — and states that such a bill may be passed by simple
majority vote. Both the supporters and opponents of Prop 25 agree on
this point, and the supporters and opponents of Prop 25 also agree that
if an appropriation is NOT included in such a bill, and is not either
an appropriation included in the budget bill, or an appropriation for
the public schools, the appropriation will still require a 2/3rds vote
to become law.
Because the term used by the drafters of Proposition 25 is "bills
providing for appropriations related to the budget bill," many have
stated or assumed that such a bill can only include a single item of
appropriation, and not include a tax increase. Unfortunately for
taxpayers, this simply isn’t true.
Proposition 25 itself further defines the term "bills providing for
appropriations related to the budget bill" as being "bills identified
as related to the budget in the budget bill passed by the Legislature."
Proposition 25 does not prohibit any such bill from including a tax
increase, nor does any existing provision of the California
Constitution prohibit a bill from including both an item of
appropriation and a tax increase in the same measure.
Thus, while the prefatory language of Prop 25 states that "it will not
change Proposition 13′s property tax limitations in any way," the truth
is that there is near certainty that it will change Prop 13′s
two-thirds vote requirement for state tax hikes. For that reason, we
must call Prop 25 what it is: A direct assault on Prop 13.