| Russ Allbery > Eagle's Path > May 2009 | Back in the flow > |
If you don't live in California, this post probably won't be very interesting.
First, some background: In the face of a huge budget deficit, the California state government deadlocked for an insane length of time, primarily blocked by the California Republicans (who are considerably to the right of Republicans elsewhere in the country). The Republicans were basically holding out for balancing the budget purely through spending cuts, without any tax increases. There was lots of angst and drama and the current budget only passed by a single vote and with the requirement to put a bunch of crap on the ballot for a special election.
So I'm already annoyed that in the face of a huge budget deficit, the state decided to spend a ton of money to run a special election.
There are a set of basic problems behind why I think we're in this mess in the first place.
First, California is a fairly liberal state with an aggressive agenda, but has passed a bunch of anti-tax legislation via bizarre constitutional amendment routes that make it almost impossible to raise useful taxes (namely, taxes on rich people). The state didn't stop spending money (on, I should say, programs that I largely agree with). Instead, it started funding them through borrowing, producing an endless stream of ballot propositions to approve new bond issues. This, predictably, has screwed up the state finances.
Second, we've passed a serious of IDIOTIC laws that essentially take all the discretion out of the budget by putting mandatory minimums or mandatory allocations of state funds to particular projects. This requires the state to fully fund a completely random set of state services and only allows the government discretion over a relatively small amount of state funding. Hence, whenever there's a budget problem, the state can't cut across the board and spread the pain out. Without going to the voters for special amendments, some random areas take insanely deep cuts and other random areas can't be cut at all.
I therefore go into all elections in California with three basic principles:
Anything that raises taxes on rich people or makes it easier for the state to do so is good.
All bond measures are bad until the state gets things back under control. Even if it's something bonds are good for, we have way too much state debt. We have to stop.
All restrictions on general funds spending are bad. All targetted funding (where all of a revenue source is devoted to one state program) is bad. I'll sometimes vote for targetted funding via raising a tax, due to point 1, but I won't like it.
So, with that in mind, let's look at the propositions.
This is basically the monster budget reconciliation measure. I'm very conflicted about it, since it includes some really good ideas and some really horrible ideas.
Good ideas: The rainy day fund is a good idea. It may not be the best possible implementation of the idea, but I'll take it. The state needs to smooth spending across economic downturns. It probably wouldn't have helped with this one, since this one was so unpredecented, but it would have helped with a lot of others. Sane large institutions like Stanford already do this. Other good ideas are the increase in the vehicle registration fees (a good, progressive tax) and some of the increase in the income tax.
Bad ideas: The sales tax increase has to rank as one of the most ill-advised approaches to balancing the budget I've ever seen. Never mind the question of economic impact (I doubt that will be that substantial). The sales tax is the most regressive tax we have. This is basically a tax on poor people. And on top of that, the income tax increase raises all tax brackets by the same amount, thus making the income tax less progressive and disporportionately hurting lower-income tax brackets.
The right solution would have been to raise the vehicle licensing even more, raise the top levels of income tax, and increase the property taxes, preferrably by making property taxes more progressive at the same time.
That said, if this fails, we go back to more rounds of negotiation. The Republicans are all rooting for it to fail. That says I probably don't want it to fail, since they think they're going to get more cuts of state services out of this, and I think state services are important. So I'm going to hold my nose and vote for it, hating it the whole time.
What this proposition basically does is let the state defer funding to schools which is currently mandatory for a couple of years, and then requires the state make up for the lost payments.
The cuts I agree with, sadly, as part of an overall budget cut. We have to balance the budget, and that's going to be painful for everyone. I disagree with the longer-term increase in the amount of funding that has to go to schools; it's yet more mandatory spending that got us into this problem in the first place.
This is the sort of stupid law that we have to vote on because our budget process is broken. The legislature and governor should have the discretion to do this sort of planning of future expenditures and then be able to adjust it based on economic reality later without putting it up for a vote again. But despite being annoyed I have to vote for it, it doesn't make the situation any worse, and it's part of the overall budget compromise. So holding my nose again.
This measure does a whole bunch of ill-considered things, but the core relevant point of the measure is that it lets the state borrow $5 billion against future lottery earnings to balance the budget. It's not a bond measure, but it may as well be. See the above point about debt. More debt is a horrible way of solving our budget problem.
The other main thing this does is remove the requirement that lottery proceeds go to education (good, insofar as the state is running a lottery at all, which I don't think it should be; it's essentially a voluntary regressive tax), and to compensate raises the general fund obligation for education funding (BAD, see above).
This is a horrible idea all around.
See Proposition 1B. This is approval to cut funding for one of those state programs with special budget allocations in order to balance the budget by instead funding some other program with special funding that would otherwise have to come out of the general fund. This whole situation shouldn't exist; the state government should be able to do this without requiring a vote.
Same as Proposition 1D, just yet another special program with special dedicated funding.
The argument in favor of this proposition is remarkably stupid and the argument against it is correct, but I'm still voting in favor of it for an entirely different reason.
This proposition prevents pay raises for any state elected officials if the state has a budget deficit. This is one of those feel-good measures that will have little practical effect and certainly won't help balance the budget.
However, observe: elected state officials are essentially the management of the state. If we have a budget deficit, state workers and worker unions are going to be under huge pressure to take a salary freeze or pay reductions. This measure requires a salary freeze for the top level of state management in times when we're going to be demanding the same thing of the workers. Given that, for me, it's obviously worth voting for.
Posted: 2009-05-02 13:52 — Why no comments?
| Russ Allbery > Eagle's Path > May 2009 | Back in the flow > |