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05.13.09

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Phaedra

SAY IT AIN'T SO: Sen. Joe Simitian says the state might be forced to make $6 billion worth of cuts to get through 2009.

Desperate Measures

On Tuesday, May 19, voters will be asked to do what their elected leaders could not

By Jessica Lussenhop


POOR, POOR special election propositions. So unpopular, even the proponents are endorsing the measures in a hangdog, best-of-a-bad-situation kind of way.

"Look, I think the public has a right to be both frustrated and angry about these six measures," says Sen. Joe Simitian, who supports all six. "But that being said, there's only one question: Are we as a state better off if they pass or fail? Yay or nay? In a better world, it would not come down to this."

As May 19 draws nigh, and five of the six ballot proposals continue to poll poorly, it seems only logical to be asking, what happens if they fail?

First off, says California Budget Project director Jean Ross, things have changed quite a bit since this February deal was put together. "They're implying if the ballot measures pass, we won't have a problem—wrong," she says. "The gap is going to grow regardless. Even if all the budget measures are approved."

The projected deficit has been yawning slowly back open as tax revenues trickle in even lower than anticipated in February's budget. The damage for next fiscal year has been estimated by the Legislative Analyst's Office to be more than $8 billion. On Monday, Gov. Arnold Schwarzenegger announced that it has now nearly doubled, to a staggering $15 billion. So, no matter what, it's back to the drawing board.

According to Ross, Props. 1A and 1B won't have immediate consequences for this year's budget but are seen by many to be the most important propositions, especially in terms of future tax revenue and education money and as a step toward calming the state's budget volatility. The revenues that go away in two years without Prop. 1A will gouge holes out of the 2011–12 and 2012–13 budgets, says Assemblyman Bill Monning.

Prop. 1C promises $5 billion in money borrowed against future lottery profits. Props. 1D and 1E would contribute a little less than $1 billion. If they fail, add that amount to the current projected shortfall.

There is no party unanimity on the measures. Assemblyman Jim Beall, a member of the Budget Committee, says he supports Props. A, B, C and F.

"It's hard to ask for more sacrifices from Californians," Beall says. "At the same time, many people are in need and they are seeking help from state services and visiting our public emergency rooms in droves."

The numbers are daunting, even to veteran lawmakers who have weathered earlier budget battles.

"If these go down, they're going to have to borrow and cut to get to $16 billion, which is ... I can't fathom it," says former Budget Committee chairman John Laird. Monning warns that the amount could climb to $20 billion. "The stakes are high," he says. "There's kind of no Plan B."

But with a $15 billion shortfall already a foregone conclusion, someone ought to be formulating a Plan B. "I would argue they ought to tell us today how they're going to close that gap," says Ross. "There's a lot of talking behind closed doors, not a lot in public."

Vote Yes—Or Else!

The governor has mentioned a plan to cut $80.8 million from CalFire—right at the start of the fire season—if the propositions fail, and though that may appear to be an attempt to scare up some more votes for the propositions, huge cuts will certainly have to be made when the governor comes back with a revised budget sometime in late May or even into June.

Monning says he and his fellow Democrats are already putting themselves through the paces of both an $8 billion and a $16 billion shortfall.

"The Democratic caucus did a budget exercise a week and a half ago," he says. "We were able to capture some of it through mechanisms with the Department of Corrections [with] an early-release program. We looked at some revenue-neutral adjustments with a majority vote that could capture $3 [billion] to $4 billion in increased revenue."

This includes raising certain fees, like the vehicle license fee. Though the governor promised to block a budget passed by simple majority back in December, Monning says that, at the time, "he prudently didn't criticize the majority vote as inherently illegal. I think he did that realizing he may have to accept a majority vote at some point."

Where the rest of that $8 billion or $16 billion or $20 billion is coming from is anybody's guess at this point. With the failure of these propositions, Republicans and Democrats will once again have to lock horns in the same fight that has been going on for decades and getting worse each time around.

"Unfortunately, the state of California has not been able to confront this problem," Simitian says. "We've ducked and dodged, and now we're out of time."

Beall gives voice to a sentiment that has been expressed for so long it now sounds like a pipe dream. "We have to allow the Legislature to adopt a budget with a majority, and eliminate the existing two-thirds majority requirement," he says. "The current two-thirds requirement has allowed a small, hard-core group of lawmakers to stop the will of the majority and hold the budget hostage."

Meanwhile, Simitian says, Californians must hold their noses, grit their teeth and do what needs to be done.

"When I was a kid," he says, "my mother had an expression: 'Don't cut off your nose to spite your face.' That kind of sums it up. Nobody likes these measures. But if vote no, we're going to have to deal with the consequences."  


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