The “Reform” of Proposition 25?

 

By Loren Kaye

Some day the Legislature will pass a balanced, gimmick-free budget that will carefully weigh the competing priorities of a diverse state and judiciously determine how to address them. 

While we’re waiting, we’ll be left with an on-time budget. 

Proponents of Proposition 25, the 2010 ballot measure that reduced the legislative vote threshold for the state budget to a simple majority, didn’t promise much — but even then they oversold it. 

They claimed that this measure would bring about “responsible budgeting and fiscal responsibility.” And they were right, if by “responsible” you mean billions in phantom revenues (2011 budget) or billions in one-time solutions like loans, spending postponements or fund shifts (2012 budget). 

They promised to punish the Legislature and dock its pay if they didn’t pass an on-time budget. But they never said the budget had to be balanced, or free of gimmicks or even complete. They didn’t say that the Governor even had to sign it in order for them to get paid. 

The State Controller, John Chiang, tried to read all sorts of accountability into Proposition 25, but a judge in effect told him to read the plain words and step aside. Mr. Chiang hasn’t appealed that decision. 

Proponents asserted that Proposition 25 would reform “California’s badly broken state budget process, so taxpayers, schools and services are protected, while legislators are held accountable if they fail to pass the budget on time.” Let’s see, this budget counts on a yet-to-be-approved seven-year, $40 billion tax increase, maintains deep cuts in higher education and the judiciary, and takes credit for – but does not enact – reductions in the state payroll. So much for protecting taxpayers and services – but the budget hit the deadline, so the Legislature passed the “accountability” test.

What’s more, budget negotiations are hardly complete. Left undone are major decisions on welfare costs, tax collections and property tax sharing that were part of the Governor’s original proposal. 

Proposition 25 certainly fixed the “problem” its advocates identified – a chronically tardy state budget. But it did nothing to create a better or smarter budget. Indeed, the new constitutional authority bestowed by the measure actually creates permission for the majority party to postpone important fiscal decisions pending future, hoped-for good news. In short, Proposition 25 gave official sanction to late budgets, in fact if not in name. 

 

Loren Kaye is president of California Foundation for Commerce and Education, a think tank affiliated with CalChamber. Follow Loren on Twitter at @KayeLoren.

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