Biggest Threat on November Ballot

Loren Kaye
President of the California Foundation for Commerce and Education

An
initiative
sponsored by government
worker unions
has qualified for the November ballot – and it may well
be the most threatening issue facing businesses and taxpayers in 2010.

So
what does it do? According
to sponsors
, Proposition 25, the "On Time Budget Act," merely
reduces the legislative vote requirement to pass the state budget from
two-thirds to a simple majority, and stops paying legislators if the budget is
late.

But
when you think about it, why would the California Federation of Teachers,
California Faculty Association, California School Employees Association,
California Professional Firefighters, Professional Engineers in California
Government, American Federation of State, County and Municipal Employees, and
California Nurses Association invest millions of dollars in a measure simply to
reduce the vote on the state budget? What else does it do that its sponsors are
not talking about?

A
more accurate title would be the Majority Vote for Everything and Bye-Bye
Referendum Act.

First,
the measure eliminates – yes, eliminates – the ability to subject
certain bills to voter referendum. That is, bills "providing for
appropriations related to the budget bill" may be approved by a majority
vote of the Legislature, and take effect immediately without voter
recourse to using the referendum process (see new paragraph (e)(1) in Section
12 of the measure).

Second,
the measure effectively repeals the protection of the legislative two-thirds
vote requirement for certain bills that increase taxes, enact general
obligation bonds, and allow the Legislature to increase its living expenses,
among others. That is, bills that likewise provide "for appropriations
related to the budget bill" that would otherwise require a two-thirds
vote to take effect would no longer be subject to that vote threshold (see the
first clause of new paragraph (e)(1) in Section 12 of the measure).

Imagine
the implications of this measure.

Substantive
changes in statutes that have in the past been subject to voter referendum
could be passed by a majority vote, as long as they include an appropriation
that is related to the budget – certainly a minimally attainable
threshold. For example, in 2004 employers beat back a "pay or play"
employer health care mandate with a voter referendum, Proposition 72. In
2000 employers rolled back the Legislature’s major expansion of tort
liability with Propositions 30 and 31. It
is highly likely that the measures repealed by these referenda would never have
been subject to this important voter accountability tool in the first place had
the "On Time Budget Act" been in effect.

These
are just the real world examples; many other measures devastating to various
industries have been halted in the Legislature because of the legitimate threat
of referendum. Top of the list would be new fees on products or business
activities, which could be enacted by a majority vote of the Legislature
– and take effect immediately without the threat of a referendum.

Even
more insidious is the measure’s deft attempt to repeal important taxpayer
procedural protections that are enshrined in the Constitution. The initiative
states that "notwithstanding any other provision of law or of this
Constitution
… bills providing for appropriations related to the
budget bill" may be passed by a majority vote of the Legislature.
Consider these existing Constitutional protections that currently require a
two-thirds vote of the Legislature:

  • If
    a tax measure also includes an appropriation related to the budget, it could be
    approved by a majority vote of the Legislature – in effect repealing a central tenet of
    Proposition 13
    .
  • If
    a bill authorizing
    general obligation bonds
    , subject to voter approval, also includes an
    appropriation related to the budget, it could be approved by a majority vote of
    the Legislature.
  • If
    a bill to change the
    travel and per diem expenses of the Legislature
    also includes an
    appropriation related to the budget, it could be approved by a majority vote of
    the Legislature.
  • If
    a bill suspended the transfer of gasoline sales tax revenues to the Transportation Investment
    Fund,
    or modified the percentage shares for allocating these funds, and
    also includes an appropriation related to the budget, it could be approved by a
    majority vote of the Legislature.
  • If
    a bill to suspend a portion of the Proposition 98 school
    funding
    guarantee also includes an appropriation related to the budget, it
    could be approved by a majority vote of the Legislature.

The
majority vote for the budget is the tip of the iceberg – hidden just
below the surface are higher taxes, the elimination of voters’ rights and even
more spending by Legislators.  You can be sure that proponents of Prop 25
are holding their breaths and hoping that California voters crash head-on into
this iceberg.

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