State Faces Few Good Options In Wake Of Proposition Failures
California's towering budget deficit increased to an unprecedented $21.3 billion after voters killed all but one ballot measure in Tuesday's statewide Special and Consolidated Elections.
Only Proposition 1F passed by an overwhelming 74 percent, which bans salary increases for statewide officeholders during deficit years.
"It's showing voters are really fed with what's happening in Sacramento," said Jessica Levinson, director of political reform at the Center for Governmental Studies, a nonpartisan group. "If voters are going to have to deal with pay cuts and spending cuts, they feel the same should happen for their elected officials."
Gov. Arnold Schwarzenegger said the failed measures would add $5.8 billion to the state's $15.4 billion shortfall and force deeper cuts, borrowing and more measures to cut waste.
Some of his proposals for balancing the budget include:
-- Cutting education funding by $5.4 billion, which would shorten the school year by 7.5 days, increase class sizes and lay off more teachers.
-- Eliminating all Outreach funding for the University of California and California State University systems.
-- Cutting funding for public health and social service programs, which would affect 225,000 children in the Health Families Program.
-- Borrowing $2 billion from local governments.
-- Releasing thousands of undocumented immigrant inmates directly into federal custody.
-- Selling seven state-owned properties, including San Quentin State Prison and the Los Angeles Coliseum.
-- Laying off 5,000 state employees.
Levinson said although Proposition 1F did not fail, its passage is mainly symbolic rather than fiscally significant. "1F would affect hundreds of thousands of dollars difference. 1A through 1E, we're talking about billions of dollars."
Propositions 1A-E all collected support in the 30 percent range, according to the latest statewide election results.
Levinson said 1A would have required the state to increase rainy day reserves up to 12.5 percent of the general fund during times of economic growth and add new spending restrictions, but the measure lacked popular support because it would have extended up to two additional years of tax hikes.
Another reason the measures were not entirely fiscally effective is because some measures would not have had an immediate impact.
1B covered education funding and would have gone into effect if 1A passed but would not have begun until 2011, Levinson said.
Levinson said 1C was essentially deficit funding because it would have allowed the state to borrow $5 billion from future lottery sales and pose the moral issue of making Californians financially dependent on gamblers.
"It potentially could be a wash because it repeals the requirement that lottery revenue is only used for education and requires legislators to appropriate from the general fund the revenue for education," Levinson said.
She said 1D and 1E would have taken money away from past propositions approved by voters that therefore have self-supporting revenue stream. "It calls into question whether successful initiatives will be raided by the Legislature in bad economic years."
For example, proposition 1D would have shifted $1.7 billion from early childhood development programs to the general fund for health and humans services programs for young children, even though most of the revenue comes from a program paid for by a cigarette tax under Proposition 10 in 1998.
1E would have shifted $460 million from a mental health program to Medi-Cal patients younger than 21, even though that revenue comes from a millionaire income tax under Proposition 63 in 2004.
Fifty-seven-year-old Anne Cahill of Valley Village, like the majority of Californians, said she voted "No" on all the propositions except 1F. "The Special Election really makes me angry because I think it's a waste of money."
Schwarzenegger's deputy press secretary confirmed that the governor, who spent election day in Washington, is expected to attend a closed-door meeting Wednesday with legislative leaders from both Houses to discuss the budget.