YES on 1A
Proposition 1A aims to reform the state budgeting process and reduce deficits by amending the constitution to require a larger “rainy day” fund and limit use of larger-than-expected revenues. It also extends the increases in sales, income and vehicle licensing taxes introduced in this year’s budget.
Proposition 1A is far from a perfect solution to California’s budget woes – spending caps limit legislative flexibility, and mandatory reserves remove thought from the budgeting process.
Still, Prop 1A represents a hard-won bipartisan compromise, with needed ideas from both sides of the aisle. The increased budget reserves will help to smooth spending and end the cycle of creating unsustainable new programs when tax revenues are high and cutting them later. And, since our legislators have repeatedly demonstrated their inability to manage our money in good times and bad, these new limits will help force them into fiscal responsibility.
The Nexus endorses Proposition 1A.
NO on 1B
In 1988, California voters approved Proposition 98 to set minimum levels of funding for K-14 education. Unfortunately, Prop 98 was unclear on how the state was obligated to make up for missed payments. Proposition 1B looks to clear this up – temporarily. Prop 1B acknowledges that the state owed $9.3 billion in back payments, and sets a payment schedule beginning in 2011.
The only advantage to Prop 1B is that it limits demands on state funds right now. However, it will result in an increased burden once repayment begins, and does not solve any underlying issues of school funding or spending oversight.
To top it all off, Prop 1B is widely acknowledged to be a special interest piece, put on the ballot to appease teachers unions and win their support for the other measures in this package.
The Nexus does not endorse Proposition 1B.
NO on 1C
Currently, 100 percent of California Lottery profits go to education funding. Proposition 1C would take schools off the lottery’s payroll while promising equal funding from the state General Fund. The state would then sell bonds backed by future lottery revenue to raise money for use today.
While supporters tout this plan as genius because it raises money without new taxes, it is also incredibly short sighted – the state must eventually pay back every dollar borrowed, plus interest. Banking on something as unpredictable as future lottery revenue is not sound fiscal planning.
The state legislature is counting on this passing: if voters reject Prop 1C, legislators will be forced to find new ways to balance the budget without the $5 billion in bond revenue this would raise. But realistically, it is unlikely that these bonds will sell, and California will still be left scrambling for cash.
The Nexus does not endorse Proposition 1C.
Right now, in a time of crushing budget deficits, there is a $2.5 billion surplus in a special tobacco tax fund. Voters created this fund, administered separately from the rest of the state budget, in 1998 to support programs that focus on children’s health and school preparedness. Prop 1D would allow the redirection of about $600 million of this special surplus to programs for children that are administered through the state General Fund, such as foster care, health care and pre-school.
Prop 1D will help solve California’s budget crisis without cutting programs. Needy children will not suffer from its passage because redirected funds will still be used for programs to their benefit. Plus, using surplus money to fund these programs will free up General Fund dollars for other purposes and help balance the budget.
The Nexus endorses Proposition 1D.
YES on 1E
Like Prop 1D, Proposition 1E redirects money from a special fund to the General Fund to pay for similar services. In this case, money set aside from increased income taxes on those making over $1 million a year has been used to fund mental health-related programs like early intervention, training for mental health workers and other services. This fund has over $2 billion in unspent revenues. Prop 1E will transfer about $500 million of this surplus to the General Fund to pay for federally mandated mental health programs, including programs for Medicaid patients under 21.
It makes sense to use surplus money to fund these programs, especially because it allows us to fund needed services without raising taxes or cutting other existing services.
The Nexus endorses Proposition 1E.
YES on 1F
Proposition 1F disallows pay increases for elected officials in years with budget deficits. The potential direct savings from this measure are laughably small, less than $500,000 per year. The loss of personal income, however, could encourage lawmakers to work harder to balance our state budget, which they are legally obligated to do under 2004’s Prop 58, yet repeatedly fail to actually make happen.
Prop 1F doesn’t prevent lawmakers from receiving larger raises in good years to make up for no-raise bad years, and it leaves other loopholes that will likely be exploited. In essence, it is a symbolic slap on the wrist to lawmakers who have repeatedly slept on the job and betrayed the public trust.
California’s lawmakers have earned this proposition many times over. Here’s to a job not done!
The Nexus endorses Proposition 1F.