No Deal on Prop 25

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In his column this morning, Los Angeles Times columnist George Skelton offers up a deal to resolve the budget crisis. Skelton says the legislature should give Governor Arnold Schwarzenegger the reforms he demands for public pensions and budget in exchange for the governor’s support for Proposition 25, which would lower the two-thirds vote to majority to pass a budget.

Don’t take the bait, Governor.

I say this as someone who has been quoted by Skelton in the past as seeing a way to a majority vote for the budget. However, Proposition 25 is not it.

I have argued for what I called a “Back to the Future” budget vote compromise. Between 1933 and 1962, California allowed for a majority vote budget if the yearly budget increase did not exceed five percent. A budget that leaped up over five percent required a two-thirds vote.

Over the thirty years under this provision, the budget so often went above the five percent barrier and received a two-thirds vote that a constitutional revision commission decided to eliminate the majority vote requirement when trimming language from the constitution.

Such a compromise would impose a de facto spending cap. Majorities that want to avoid the struggle of achieving a two-thirds vote would limit spending.

Proposition 25 contains no spending cap. In fact, under the proposition, spenders could go to town with unchecked spending and add to our deficit problem by borrowing to pay off the spending.

Worse, Proposition 25 threatens to allow tax increases to be rolled into majority vote appropriation bills. Loren Kaye explained that particular weakness in Prop 25 on this site a few days ago.

Kaye also wrote about Prop 25’s constitutional change on the people’s power of referendum. If voters don’t like a bill that the legislature passes, they can gather signatures and refer that bill to the voters at an election to undo the legislative act. As Kaye pointed out, Proposition 25 would eliminate the people’s power to refer measures that contain fees. Fees can be raised with a majority vote (unless that law is changed by Proposition 26, a discussion for another time).

Without the power of the people to use a referendum to stop an abusive use of fees, if the legislature had the power to pass a budget with a majority vote and the power to pass fees with a majority vote– well, what do you think would happen?

Pensions do need to be reformed and the governor is making progress in that direction. The public and the lawmakers are coming to the realization that the current pension system is not sustainable. Changes will come and soon.

But trading the pension problems for new tax and spend problems by helping Proposition 25 pass is a bad deal.

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