Sacramento Bee columnist Dan Walters wrote to Fox & Hounds to criticize my Fox & Hounds post arguing that a Democratic supermajority would be a bad thing.
My main point: it would be next to impossible to undo anything that a party with a supermajority could do in California’s supermajority-mad system. Walters’ point: it’s not that hard to undo tax increases, because, he said, it only takes a majority to reduce taxes.
Three years ago, Walters would have been right. But today he’s wrong. What changed?
Prop 26.
Specifically, Prop 26 — in the name of taking away the ability to raise fees via majority vote as a way of getting around the two-thirds requirement for raising taxes — rewrote the constitution. But Prop 26 did more than just extend the supermajority to fees—it extended the supermajority to cover any number of tax reforms and tax decreases.
In the past, measures that were revenue neutral or cut taxes were subject to a majority vote. But many tax cutting bills raised taxes on at least a few people; there are winners and losers in taxes. This was OK if the legislation cut taxes over.
But Prop 26 changed this. The language of the initiative rewrote the constitution to say, plainly, “Any change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed.”
The previous language had applied the two-thirds only to “any changes in state taxes enacted for the purpose of increasing revenues.” That’s a big difference: from a two-thirds rule for taxes designed to increase revenues, to a much broader two-thirds for anything (taxes or most kinds of fees) that would raise even one taxpayer’s taxes.
What that means is that tax cut legislation, if it were to raise taxes on even a single Californian, would require a two-thirds vote. Under this new rule, a tax reform package that cut rates and decreased revenues could be subject to two-thirds. Practically, most tax-cut legislation raises taxes on some people.
From our exchange, mediated via Fox & Hounds editors, it wasn’t clear to me that Walters understands this. That’s why I’ve written this post.
There are two lessons here.
- The best evidence that California’s budget and tax system is too complicated, and changes too often, is that someone who is watching this as closely as Dan Walters didn’t immediately understand this.
- Be wary of good government reformers. Prop 26 was paired with Prop 25 on the November 2010 ballot. The idea seemed to be some sort of balance. Prop 25, by reducing the vote to pass a budget from two thirds to a simple majority, was supposed to end gridlock and bring the budget into balance. Prop 26 was the other side of the coin; in return for making it easier for Democrats to spend, Prop 26 made it harder to raise taxes. It essentially extended the two-thirds protection for taxes to fees.
But it also, with little notice, extended that same supermajority to a lot of tax-cut legislation.
This misunderstanding is another reminder of why supermajorities are a disastrous for democratic governance. And of why the Democrats’ getting a supermajority won’t solve anything.