Gov. Arnold Schwarzenegger’s lame duck response to California’s projected $20 billion state deficit has given supporters of more than 30 budget and revenue-related state initiatives now in circulation a renewed sense of urgency as they scramble to gather signatures and qualify proposed solutions to the state’s ongoing financial emergency for the November ballot.
But while this plethora of initiatives reflects widespread frustration over the state’s broken system of governance, disagreement rages over how to fix it and how best to restore majority rule to California.
“These are the hardest decisions a government must make, yet there is simply no conceivable way to avoid more cuts and more pain,” the governor told reporters Jan. 8 as he released a new budget proposal calling for $8.5 billion in cuts to state workers’ wages, health and human services, and prisons; a legally questionable $4.5 billion shift in other funds; and $6.9 billion in federal reimbursements that have yet to be approved.
Even steeper social services cuts are in the works, Schwarzenegger warned, if the feds don’t comply with this request for a bailout. But he refused to target corporations and millionaires as revenue sources, clinging instead to the standard Republican pledge not to raise taxes.
“We didn’t hear him say, ‘We are going to pinch the wealthy and the corporate,'<0x2009>” State Sen. Mark Leno observed. “He is definitely setting his sights on the social safety net.”
Recent revolts within the public university system, including the November takeover of UC Berkeley’s Wheeler Hall, suggest that tuition hikes, layoffs, and reduced study options have brought students to the tipping point.
But UC Berkeley linguistics professor George Lakoff fears that without restoring majority rule to the state’s budget and revenue-related measures, such revolts only address symptoms, not causes, of the impasse.
So Lakoff decided to author the California Democracy Act, an initiative that would replace the state’s two-thirds requirement on budget and revenue bills with a simple majority vote, after Sen. Loni Hancock invited him to meet with a group of Democratic state senators last spring.
“She said the Democrats were having problems getting anything done, and I went away saying, ‘this is ridiculous,'<0x2009>” Lakoff said. “It occurred to me that since the problem came by way of the initiative process, then it was possible to rectify it that way.”
Proposition 13, approved by voters in 1978, limited property tax increases and required a two-thirds supermajority in the Legislature to approve most new tax increase, measures that contributed mightily to the state’s bleak financial situation.
California also requires a two-thirds vote for the Legislature to approve the annual budget, along with only Arkansas and Delaware. On Jan. 5, Sonoma State philosophy professor Teed Rockwell told the Potrero Hill Democratic Club to endorse Lakoff’s initiative, noting that California is the only state to require two-thirds vote on budget and revenue bills.
“I have learned that essentially everything that is uniquely wrong with California results from this one fact,” Rockwell said.
California has the largest number of millionaires in the U.S., but as Rockwell observed, thanks to the fiscal stranglehold of the Republican minority, “We do not have enough money to keep our parks open or maintain affordable tuition at our public colleges. And the extremists in Sacramento want to solve this problem by decreasing taxes on millionaires and increasing taxes on the middle class.”
Rockwell noted that of the 22 states that produce oil in the U.S., all have oil severance taxes, including Sarah Palin’s Alaska and George W. Bush’s Texas — except California.
But while the California Democracy Act simply resolves that “all legislative actions on revenue and budget must be determined by a majority vote,” neither the state Democratic Party nor the major unions are willing to support Lakoff’s measure, citing its bad results in the polls.
Instead, veteran legislator and California Democratic Party Chair John Burton is backing a Hancock proposal that seeks to reduce to a simple majority the Legislature’s voting requirement on budget bills.
Lakoff warns that budget bills merely determine how to slice the pie, while revenue bills determine the size of the pie. This means that if Democrats succeed in only reforming the state’s budget voting requirements, they’ll still be stuck with having to make painful cuts.
But Hancock, who has been living with the results of this fiscal gridlock since she was elected to the state Assembly six years ago and helped sponsor the failed oil severance tax initiative in 2006, believes decisions to cut prison or education spending are not trivial.
“Last year Democrats gave $2 billion in tax breaks just to get one desperately needed Republican vote on the budget,” Hancock told the Guardian. “And now the Republicans are asking for takeaways on environmental and labor protections that they otherwise wouldn’t have any power to negotiate.”
“I am a realistic idealist,” Hancock continued. “I believe we are better off to get the majority vote to pass the budget. That way, the minority might begin to negotiate and have a more rational conversation. I’m very pleased that throughout the state, folks are recognizing that state governance is broken.”
California Tax Reform Association executive director Lenny Goldberg told us it’s hard to choose between the Lakoff and Hancock initiatives.
“It’s a question of what’s achievable, of how to focus energy,” Goldberg said. “Lowering the vote requirement for the budget would eliminate some of the hostage-taking and help reverse the corporate loopholes that the Democrats were forced to accept to get a budget passed. So at least it would make the budget process better.”
But he agrees that budget reform only makes the Democrats solely responsible for the budget, while preventing them from raising revenue.
“So there is some disagreement whether it’s better to do one, if you can’t do tax reform,” he said. “In the end, it’s a strategic, not substantive, question. Is it better to do budget alone, or not at all? Personally, I think we’re better off doing budget reform than nothing — but it’s a close call.”
Hancock and Lakoff both believe that a competing initiative, endorsed by Schwarzenegger and funded by the group California Forward, is the poison pill in the upcoming fiscal equation.
“Unfortunately, it’ll make it harder to raise fees,” Hancock said.
“It should be renamed California Backward,” Lakoff quipped, noting that while the California Forward initiative supports a simple majority on budget bills, it seeks to raise to two-thirds the voting threshold on new fees.
California Forward executive director Jim Mayer said his organization supported Prop. 11, the redistricting measure that passed in November 2008, “as a start to melt the political gridlock.
“And our two initiatives will help legislators do a better job of spending the pie,” Mayer added, noting that his group is talking to Democrats and Republicans as well as counties, cities, and branches of the Chamber of Commerce.
One of California Forward’s initiatives seeks to change the budget vote requirement to a simple majority and create a two-year budget cycle. It also forces the Legislature to use one-time revenues for one-time expenditures — and requires a two-thirds vote on fee increases, raising Democrat hackles.
“When the Legislature attempts to replace what’s currently a tax on utilities with a fee, currently they can do that with a simple majority. But people on the right tend to worry that if you eliminate a tax and call it a fee, it’s illegal,” California Forward spokesperson Ryan Rauzon explained.
The other initiative would allow county governments to identify priorities and raise revenue with a simple majority vote, Mayer said, a plan he claims is about “empowering local governments.”