The Legislature may
vote on a legitimate (if not balanced) budget proposal in the next
couple weeks. Or it may not. But in any event the lack of a budget for
nearly the entire first fiscal quarter should not prevent us from
war-gaming the budget for the next fiscal year.
Jerry Brown has said on many occasions that he would only raise taxes with a vote of the people. At a recent editorial board he floated the idea of a special election next spring (Joel Fox predicted
May 17, 2011, to coincide with the LA mayoral election) to "tee up
some key decisions," presumably meaning voter approval of tax increases
tied to a budget. If Prop 25 passes in November, the Legislature could approve a budget by a simple majority vote. But
wouldn’t he still need a two-thirds vote to place a tax increase on the
ballot?
Maybe not.
The Constitution (Art. II, Sec. 10(c)) provides that the Legislature may amend an initiative statute by
another, subsequent statute placed on the ballot for voter approval.
These statutes can be passed by a majority vote of the Legislature, and
signed by the Governor. (An example of this was Proposition 15 in June, 2010, which amended the Political Reform Act by, among other
things, taxing lobbyists to finance election campaigns by the Secretary
of State.) If done in a special session, the statutes would take effect
90 days after the close of the session.
The Legislature – by majority vote – could propose that several laws
adopted by initiative be amended to increase taxes, which could then be
placed on the ballot by the Legislature for a special election to be
called by the Governor or the Legislature.
· The people passed the Mental Health Services Act (Prop 63) in November, 2004, which created an income tax surcharge of one
percent on taxable incomes of more than $1 million. The Legislature
might propose that the measure be expanded to include additional income
tax increases for additional public programs.
· The people increased the tobacco tax (Props 99 & 10) in November, 1988, and November, 1998, respectively. The Legislature
might propose that these measures be expanded to include additional tax
increases for additional public programs.
· The people repealed the sales tax on snack food (Prop 163) in November, 1992. The Legislature might propose amending the
relevant portion of the sales tax to increase the rate or expand the
base (as long as it did not tax food, which is prohibited by the
Constitution).
· The people approved permanent income tax indexing (Prop 7) in June, 1982. The Legislature might propose that the measure be suspended or altered to gain more revenue.
· The people repealed the inheritance and gift tax (Props 5 & 6) in June, 1982. The Legislature might propose that this tax be partially restored.
· The people approved before- and after-school programs (Prop 49) in November, 2002. The Legislature might propose adding a tax to support this and other related education programs.
This is a conservative list; I am sure legislators would be far more
creative in finding initiative statutes that could be amended to
include tax increases. Of course, the proposed tax increases would be
subject to a ballot measure campaign, but Governor Brown, Democrats and
the unions would be able to avoid the need to negotiate a tax deal with
legislative Republicans and recalcitrant Democrats.