Our recommendations against Propositions 1A-1F

It was the spendthrift governor and Legislature who over-taxed and over-spent California state government into its current predicament.

They put government employees first, and taxpayers second. They routinely overestimated future revenue while consistently mismanaging the cash on hand. Their fiscal appetites regularly were greater than what they could afford, and they put off solving their financial problems by borrowing more and more, and shifting money around to pay for things taxpayers didn’t intend that money to be spent on.

This should tell voters everything they need to know about Propositions 1A-1F on Tuesday’s special election ballot. The same people who created this mess with their disingenuous, irresponsible taxing and spending now claim to have concocted a remedy – if voters will just say “Yes” to the propositions to authorize more taxing and spending.

We urge voters to say “No” Tuesday to all six propositions.

With Proposition 1A the Legislature claims to impose a spending cap on itself. Of course, a spending cap is needed precisely because legislators so far have refused to cap their own spending. This cap as proposed is partly determined by anticipated revenue, which state government routinely overestimates. The cap also can be circumvented in an emergency, or simply by the Legislature raising more taxes or fees. This phony spending ceiling is more appropriately understood to be a floor for spending, establishing a minimum, not setting a maximum.

The proposition also would establish a rainy day fund for emergencies, but anything raised in taxes above that amount can be spent, which gives the Legislature even more incentive to collect even more in taxes.

The sneakiest part of Prop. 1A is that it will extend for two more years the highest tax increase in California history. The $12.9 billion imposed in February by a two-year increase of income, sales and car taxes would be extended another two years and $16 billion with a “Yes” vote. The most egregious part of Prop. 1A is that the ballot measure doesn’t mention that a “Yes” vote will increase these taxes.

Prop. 1B is, in effect, a promise to give public school teacher unions $9 billion in exchange for their support in this special election. The bribe worked. The California Teachers’ Association has pumped millions of dollars into the campaign for propositions 1A and 1B.

Prop. 1C would expand the state Lottery, an already bad idea that would be made worse. The plan would hype the existing Lottery with high-profile advertising and marketing gimmicks and fatter jackpots. Based on another rosy assumption that the hype will create substantially more gambling losses, the state plans to borrow against that future revenue. This combines two of the worst practices already responsible for California’s fiscal mess: rosy revenue projections and borrowing.

The lottery was a bad idea when voters approved it in 1984 to raise money for public schools. Hyping a bad idea to borrow more money is even worse.

Proposition 1D wouldn’t create new revenue for state government, but would transfer taxes already collected for children’s programs to the state general fund. Predictably, constituencies that currently benefit from these taxes are protesting the switch. Our objection is that the fund diversion would be one more hide-the-pea game of fiscal deception. As with the Lottery in 1984, this tax was approved by voters in 1998 for a specific purpose. If the money raised is not needed for its intended purpose, it should be refunded, not diverted to the general fund where it can be used for anything.

Prop. 1E similarly was adopted in 2004 to pay for mental health services by taxing millionaires exclusively. If in the Legislature’s wisdom this money can be spared, it also should be returned to the people who paid it, not re-deposited into the general fund.

Finally, Prop. 1F is an unnecessary exercise in venting. It would deny pay raises to legislators if they don't adopt a balanced budget as constitutionally required. However, even this feel-good measure creates a perverse incentive. As Assemblyman Chuck DeVore, R-Irvine, reminded us, a balanced budget can be achieved with tax increases as well as by spending cuts. We agree with Mr. DeVore that this proposition would give legislators a personal, financial incentive to raise taxes to balance the budget so they can get pay raises. What these people don’t need is yet another excuse to raise taxes.

These phony solutions for overspending and over taxing written by legislators with a long history of overspending and over taxing would worsen, not improve, California’s fiscal condition. They all deserve “No” votes Tuesday.