Critics of the initiative process, like me, are always pointing to the unintended consequences of well-intentioned measures. Proposition 13 centralized fiscal decision-making in Sacramento. Term limits have dumbed down the legislative process. The three strikes laws has stuffed our prison capacity. Proposition 98 has made rational budgeting impossible. The list goes on and on. This year, we may see the law of unintended consequences come into play if an initiative–Proposition 30–is defeated.
Let’s face it, Proposition 30 isn’t pretty. It increases our over-reliance on the state income tax and raises taxes at a time when California’s economy is shaky at best. That said, there aren’t a whole lot of viable alternatives. The State’s General Fund budget has already been cut considerably. Whatever waste and fat remains is more than offset by critical needs in infrastructure investment and education. They may not realize it now, but California’s voters are not going to like the kinds of cuts that will be triggered if Proposition 30 goes down.
Those who think Governor Jerry Brown is crying wolf are kidding themselves. There aren’t any fiscal gimmicks or borrowing schemes that are going to bail us out. The Governor has been very clear that if Proposition 30 fails, the cuts will go forward. That means the K-12 school year will be trimmed by as much as a month. More tuition increases will follow at the University of California and State University system, while many of the best and brightest faculty will flee to more hospitable environs. Community college classes will reduce class offerings and produce fewer work-ready graduates. Local law enforcement will feel the pain. Just as Jerry Brown embraced Proposition 13, after it passed, expect him to accept the “will of the people”. As he told the Sacramento Bee, “I take a bag lunch, I ride on Southwest, I take the damn middle seat…I hate spending money…I love to cut stuff. I’m not a big spender,” This time around, Governor Brown isn’t saddled by Presidential or Senatorial ambitions and will be unconstrained as he lets the chips fall where they may.
That is where unintended consequences come into play. Fiscal conservatives and business folks may dislike Proposition 30, but they are likely to hate what follows if it is rejected by voters on November 6. Once the populace starts feeling the cuts, the appetite for services will grow. Parents won’t be crazy about having their kids out of school for several more weeks. College students and their families will feel the pinch, big time. Local police and fire response times are likely to slow measurably. Waiting time at hospital emergency rooms will be interminable. None of this may make the electorate more anxious to tax themselves, but the guys behind the tree –business, high income individuals, etc.–are easy targets.
Proposals for a split roll property tax system will gain momentum. Corporate tax rates and local business taxes will be fair game. Oil severance levies, new tobacco and alcohol taxes, development and environmental fees will all be pushed upward. The business community has staved off many of these proposals in the past, at great expense, but none had the sense of urgency they will enjoy, if the average citizen sees his or her public services getting clobbered. Rest assured, the big public employee unions and other constituencies will plow huge sums into whatever it takes to boost spending on their programs.
Proposition 30 may be a bitter pill for many to swallow, but California’s fiscal maladies may grow a lot worse, if we don’t take our medicine.