Pols place ball in voters' court

When California's legislators finally agreed on a state budget in mid-September of 2008 - more than four months late - they adopted some temporary measures that, if uncorrected, would have left state taxpayers with a $40 billion shortfall by 2010 unless corrective action was taken.

In response, the legislature and the governor agreed on a revised budget package in February of 2009 that would bring in nearly $98 billion in revenues and spend about $92 billion, with the nearly $6 billion difference used to cover a year-end deficit in the 2008-09 budget and build up a reserve account for future years.

The package included nearly $15 billion in spending reductions, most of which affected funding for students attending kindergarten through high school. Reductions also called for furloughing state workers, eliminating inflationary or cost-of-living adjustments for many programs and reducing other services.

The package also included tax increases of nearly $12.5 billion, mostly by increasing the state sales and use tax to 8.25 percent. Other taxes that are rising are vehicle license fees and personal income tax.

Further, the legislature gambled that the state would receive more than $8 billion in federal stimulus funds that will be used to balance the state's current budget.

Finally, the package borrowed $5 billion in future state lottery profits to offset the current budget deficit.

As part of the February package, the legislature placed six propositions on a statewide ballot for a special election set for Tuesday, May 19.

If California's voters approve all six measures, the temporary fixes would be extended by up to four years.

If defeated, the legislature would be forced by California's constitution to find ways to cut many more billions of dollars from the current year's budget, add even more tax inceases or come up with other, unknown budget solutions to bring the budget back into balance.

Voter pamphlets mailed out this week to all registered voters contain summaries and detailed information on all six ballot measures. Additionally, similar information can be found online at www.voterguide.sos.ca.gov, a Web site maintained by the California Secretary of State.

So far, the League of Women Voters has officially taken a stance to oppose Propositions 1A, 1B, 1C, 1D and maintains a neutral stance on Propositions 1E and 1F.

Meanwhile, California Republican Party leaders voted as recently as Saturday, April 18, to oppose all six measures on the May 19 ballot, including a spending limit and temporary tax hike proposal championed by GOP Gov. Arnold Schwarzenegger and Assembly Republican Leader Mike Villines.

Some media outlets, including the San Francisco Chronicle, are urging, albeit reluctantly, approval of all six propositions because their defeat "could put California back on the brink of insolvency," a Chronicle editorialist opined in the Monday, April 13, edition.

The following are summaries of each proposition, along with the California Secretary of State's best assessment as to what the fiscal impact might be.

The Valley Post urges all eligible residents of voting age to register to vote on or before Monday, May 4; study the ballot measures as well as the arguments for and against; then exercise your right to participate in the decision making process by casting a ballot, either by mail or at the designated polling place for your residential address.

Proposition 1A - changes the California budget process.

Limits future deficits and spending by increasing the size of the state's rainy day fund and requires above-average revenues to be deposited into it for future use during economic downturns.

Fiscal Impact: Extends higher state taxes of roughly $16 billion through 2012-13.

Proposition 1B - education funding payment plan.

Requires supplemental payments to local school districts and community colleges to address recent budget cuts of $12 billion.

Fiscal Impact: Near term, potential savings of several billion dollars through 2011, however, long term the measure could cost billions of dollars each year thereafter.

Proposition 1C - lottery modernization act.

Increases payouts, improves marketing and changes management practices of the state-run lottery.

Fiscal Impact: Allows the state to borrow up to $5 billion from future lottery profits to help balance the 2009-10 state budget.

Proposition 1D - protect children's services funding.

Temporarily protects health and human services for young children while helping balance the state budget in a difficult economy. Shifts $1.6 billion in local health and education programs for young children temporarily to the state's general fund.

Fiscal Impact: State General Fund savings of up to $608 million in 2009-10 and $268 million annually from 2010-11 through 2013-14.

Proposition 1E - mental health services funding and temporary reallocation.

Helps balance the state budget by amending the Mental Health Services Act (Proposition 63 of 2004) to transfer funds for two years to pay for mental health services provided through the Early and Periodic Screening, Diagnosis and Treatment Program for children and young adults.

Fiscal Impact: Saves $230 million annually for two years, 2009-10 and 2010-11) with a corresponding reduction in funding for Mental Health Services Act programs.

Proposition 1F - elected officials' salaries.

Prevents elected members of the state Legislature, as well as statewide constitutional officers including the Governor, from receiving pay raises in years when the state runs a budget deficit, as determined by the Director of Finance.

Fiscal Impact: Minor state savings related to salaries of state officials when, in some cases, the state is expected to end the year with a budget deficit.