Special to The Bee

Budget gridlock has become an expensive tradition in Sacramento. For the last 20 years, lawmakers have failed to meet the June 30 deadline 17 times. But this year legislators have set a record with their summer political games bleeding into the fall.

California, once the Golden State, now has the dubious distinction of starting the new fiscal year in the red and without a budget, again. The Legislature's most important project was about 100 days overdue; and each additional day without a state budget further eroded California's credit rating.

Last year's budget impasse forced California to issue more than 450,000 IOUs worth $2.6 billion. Taxpayers are justifiably outraged by the failure of their elected officials to do their job and tackle the very real problems facing our state.
The budget delay has likely cost taxpayers billions of dollars. As every taxpayer knows, this money would be better spent improving schools, health care, public safety and transportation.

The recession has devastated California's economy and revenues, but it is not the cause of this year's budget gridlock. Budget delays are now the norm in Sacramento. Legislators from both parties take advantage of the two-thirds vote requirement and hold their breath until they get what they want. Petulance has replaced problem-solving, and taxpayers are paying the price.

Nearly every year, a handful of politicians are able to bring the budget process to a screeching halt. But this year's roadblock has set a new standard for irresponsible behavior. The real victims of this political stalemate are taxpayers. The bad news is that the budget process is broken. The good news is that we can fix it.

Since the Legislature has declined to do anything about these costly budget delays, voters can take action that would go a long way toward preventing future impasses by supporting Proposition 25 – the On-Time Budget Act.
Proposition 25 would improve California's budget process by making three important changes to the way the state Legislature does business. It would require the state budget to be passed with a simple majority, protect taxpayers by maintaining the two-thirds vote requirement for any tax increases, and hold politicians accountable for failing to do their job. If Proposition 25 is approved, legislators will forfeit their pay and benefits for each day the budget is overdue – and they will not be allowed to pay themselves back later. It's a simple formula: No budget, no pay or benefits.

Opponents of Proposition 25 are trying to mislead voters with claims that it will allow legislators to raise taxes without the two-thirds vote required by the state constitution. It will not. Proposition 25 will not change the two-thirds vote required to raise taxes – it will only require a simple majority vote for passage of the state budget. California is one of only three states that require a two-thirds vote for passage of a state budget. Those who defend preserving the two-thirds vote requirement as a way to hold down government spending ignore the fact that state budgets have continued to grow despite its "protections."

The majority vote has worked well for the other 47 states, and there is every reason to assume it would benefit Californians by discouraging political games at budget time.

During the past two decades, the Legislature has failed to meet the budget deadline 85 percent of the time. Clearly it's time for a change. Partisan politics will not solve California's budget crisis. We need debate, compromise and solutions – not the annual spectacle of the state budget being held hostage by lawmakers more interested in politics than progress. Proposition 25 will hold legislators accountable at budget time – and it will protect taxpayers by encouraging lawmakers to stop dragging their feet and start moving forward with real solutions for our troubled economy.

Henry "Hank" L. Lacayo is state president of Congress of California Seniors.

One hundred days after the beginning of the fiscal year, California finally has a “balanced” budget. Again the balance has been achieved by the usual gimmickry.

How? By suspending Proposition 98, $1.7 billion of K-12 public education money will be deferred until July 2011; $189 million in Community College funds will be deferred until next year; assuming that California will receive $5.4 billion from the federal government (only $1.3 billion has been approved to date); and $1 billion increase in spending under the dubious assumption that revenues will increase in this troubled economy.

The bottom line is that California is once again deferring the deficit until next fiscal year.

Why do we have an annual budget crisis? Primarily because California is one of only three states – Arkansas and Rhode Island are the others – to require a supermajority to adopt a budget. Thus, each year at budget time, the Republican minority is able to exercise disproportionate control over the budget process because passing a budget requires a two-thirds vote in both houses.

I, for one, am tired of having to wait until October for the state to finally have a budget and then learn about all the horse trading – often at the public’s expense – that happened to obtain one.

That’s why it is important that Proposition 25 pass so that a California’s budget needs only a simple majority in both the Senate and the Assembly to pass.

Over the past 20 years, the Legislature repeatedly has failed to pass a budget on time, costing taxpayers hundreds of millions in interest payments and leaving schools, municipalities and state workers holding the bag. The primary reason? The requirement that two-thirds of lawmakers approve the budget. The supermajority mandate turns democracy on its head, handing veto power to the minority.

Proposition 25 should end budget gridlock by reducing the threshold to a simple majority. And just in case that doesn't work, it would withhold salaries and per-diems from lawmakers who miss the budget deadline. We recommend a yes vote.

For similar reasons, we recommend voting no on Proposition 26, which would raise the vote threshold to two-thirds for certain fees collected by state and local governments. This would give more power to the minority and force the general public to pick up the cost of services, like cleaning up toxic waste, that now are borne by those responsible.

Opponents of allowing a majority vote on the budget are basing much of their campaign on a specious claim: that it would also allow the Legislature to raise taxes with a majority vote. It would not (although if it did, we would still support it, since we believe in majority rule). The state's 3rd District Court of Appeal shot down the argument, saying, "We find nothing in the substantive provisions that would allow the Legislature to circumvent the existing constitutional requirement of a two-thirds vote to raise taxes."

Supporters of the two-thirds requirement say that it forces Democrats and Republicans to compromise. In reality, it just forces Democrats to spend months figuring out how to buy the votes of a few Republicans. And it allows each party to blame the other for the budget mess. Wouldn't it be better if voters knew whom to hold accountable?

Further budget reforms are needed, including a two-year budget cycle and limits on spending one-time revenue. But allowing a simple-majority vote to pass the budget -- as 47 other states do -- is crucial to ending gridlock.

Proposition 26 would worsen that gridlock. It would raise the vote threshold to two-thirds in the Legislature for any fee that benefits the public but does not directly pay for a service the payer receives. (One example: the fees charged to companies that deal with hazardous waste, which help pay to clean up all toxic sites.) Local lawmakers would have to get two-thirds voter approval for such a fee, an unnecessary impingement.

Since the two-thirds threshold is impossibly high, and because of differing interpretations of the initiative's intent, many worry it would negate a broad range of fees, such as those paid by tobacco companies to fund smoking cessation programs or event promoters to provide police protection. Taxpayers would be forced to foot the bill for these costs, which should be borne by the companies profiting from the activities. Sponsored largely by oil, tobacco and alcohol companies, Proposition 26 has been called the Polluter Protection Act -- an apt moniker.

Despite all the hand-wringing about Sacramento's seemingly intractable dysfunction, voters can do something to fix it this fall by voting yes on Proposition 25. And they can avoid making the problem worse -- while saving themselves some money -- by voting no on Proposition 26.

Over the past 20 years, the Legislature repeatedly has failed to pass a budget on time, costing taxpayers hundreds of millions in interest payments and leaving schools, municipalities and state workers holding the bag. The primary reason? The requirement that two-thirds of lawmakers approve the budget. The supermajority mandate turns democracy on its head, handing veto power to the minority.

Proposition 25 should end budget gridlock by reducing the threshold to a simple majority. And just in case that doesn't work, it would withhold salaries and per-diems from lawmakers who miss the budget deadline. We recommend a yes vote.

For similar reasons, we recommend voting no on Proposition 26, which would raise the vote threshold to two-thirds for certain fees collected by state and local governments. This would give more power to the minority and force the general public to pick up the cost of services, like cleaning up toxic waste, that now are borne by those responsible.

Opponents of allowing a majority vote on the budget are basing much of their campaign on a specious claim: that it would also allow the Legislature to raise taxes with a majority vote. It would not (although if it did, we would still support it, since we believe in majority rule). The state's 3rd District Court of Appeal shot down the argument, saying, "We find nothing in the substantive provisions that would allow the Legislature to circumvent the existing constitutional requirement of a two-thirds vote to raise taxes."

Supporters of the two-thirds requirement say that it forces Democrats and Republicans to compromise. In reality, it just forces Democrats to spend months figuring out how to buy the votes of a few Republicans. And it allows each party to blame the other for the budget mess. Wouldn't it be better if voters knew whom to hold accountable?

Further budget reforms are needed, including a two-year budget cycle and limits on spending one-time revenue. But allowing a simple-majority vote to pass the budget -- as 47 other states do -- is crucial to ending gridlock.

Proposition 26 would worsen that gridlock. It would raise the vote threshold to two-thirds in the Legislature for any fee that benefits the public but does not directly pay for a service the payer receives. (One example: the fees charged to companies that deal with hazardous waste, which help pay to clean up all toxic sites.) Local lawmakers would have to get two-thirds voter approval for such a fee, an unnecessary impingement.

Since the two-thirds threshold is impossibly high, and because of differing interpretations of the initiative's intent, many worry it would negate a broad range of fees, such as those paid by tobacco companies to fund smoking cessation programs or event promoters to provide police protection. Taxpayers would be forced to foot the bill for these costs, which should be borne by the companies profiting from the activities. Sponsored largely by oil, tobacco and alcohol companies, Proposition 26 has been called the Polluter Protection Act -- an apt moniker.

Despite all the hand-wringing about Sacramento's seemingly intractable dysfunction, voters can do something to fix it this fall by voting yes on Proposition 25. And they can avoid making the problem worse -- while saving themselves some money -- by voting no on Proposition 26.

Opponents Claims Directly Contradict Court Decision, Stated Intent of Prop 25

SACRAMENTO – In direct contradiction to reality, opponents to Proposition 25, the On Time Budget Act are once again making untrue claims about the initiative in their advertisements. As such, the Yes on Proposition 25 campaign has sent the attached memo – with supporting materials – to television stations asking them to pull the ads from the air.

Attachments (Martland Letter) also included a letter from opponents of Proposition 25 that concedes that passage of the initiative WILL NOT allow taxes to be increased with a majority vote, among other things.

 MartlandLetter.pdf

TV memo 100510.pdf

Note on attachments: Memo from Yes on Prop 25 Campaign – 12 pages; Letter from opponents attorney conceding that Prop 25 cannot raise taxes on majority vote – 6 pages.

In 2008, the state budget was approved almost three months after its due date. Last year, a failure by lawmakers to reach a budget deal until it was two months overdue prompted ratings agencies to lower California's credit rating nearly to junk status, and the delay not only held up state payments but cost billions of dollars in interest on government IOUs. This year, Sacramento has set a dubious record for the latest budget ever. If you think this system is working, Proposition 25 is not for you. But you'll love Proposition 26, because it would make the situation worse.
Under current law, a two-thirds majority vote in both the Assembly and the Senate are required to pass a budget or raise taxes. Proposition 25 would end the supermajority requirement on the budget, but keep it in place for tax hikes. (Opponents of the measure falsely claim that it would do away with the two-thirds rule on taxes too, but their absurd legal arguments were demolished by the 3rd District Court of Appeal.) Proposition 26, by contrast, would add a new requirement for a two-thirds vote to impose certain business fees.

The current two-thirds vote requirement causes budget gridlock in Sacramento because unless the majority party holds two-thirds of the seats, it must win votes from the minority — which is extremely difficult to do in partisan times like these. The requirement also shields both parties from responsibility when the budget is late. Democrats, who currently hold the majority in both houses, can deflect blame by pointing to Republican obstructionism; Republicans have little incentive to compromise because they assume the public will blame the majority party. Conservatives fear that Proposition 25 would cause spending to soar because Democrats would control the purse strings, but there's a remedy for that. No longer able to hide behind Republicans, Democrats would have to answer to the voters for their budgets, and unhappy voters could replace them with Republicans or more fiscally conservative Democrats. A majority vote works just fine in the 47 states that use it for budget approval, and it would go a long way toward fixing California's broken budgeting process.

The best argument against Proposition 25 is that it would remove any incentive Democrats have to make a more comprehensive deal on reforming the budget process, because their majority control of the Legislature means they'd no longer need Republican help to pass a budget. It's true that simply doing away with the two-thirds mandate won't solve all the problems, and that some measures favored by Republicans, such as a rainy-day fund and spending caps, could help keep the state fiscally stable. Yet years of dysfunction have failed to prompt the two sides to make any such deal. We'd like to see a more inclusive budget package too, but that's not on the ballot this fall. Incremental change is better than none at all.

Proposition 26 targets regulatory fees, which are often imposed on businesses to make up for the social costs of their operations — such as a levy on beverage containers to pay for recycling programs. If the measure is approved, it would take a two-thirds vote for state legislators to approve or raise such a fee; municipal governments would have to submit them to a public vote, with a two-thirds supermajority required for passage.

Proponents argue that politicians often disguise taxes as fees to get past the two-thirds mandate on raising taxes, a gimmick that would be ended by Proposition 26. They have a point, but Proposition 26 goes much too far, making it extremely difficult to charge businesses for the damage they cause and instead sending the bill to everybody else. As one example, city residents would probably end up paying for public safety services at large events because municipal governments would have trouble imposing fees on promoters. Moreover, the initiative would be certain to worsen Sacramento's gridlock at budget time.

Supermajority budgeting rules served a purpose in a less partisan age, but now they have all but brought state government to a standstill. Vote yes on Proposition 25, and no on 26.

From now until Election Day, you can count on messages from opponents of Proposition 25 to tell you over and over that this ballot initiative is something far more pernicious than what it says it is.

What it says it is: a measure to reduce the vote needed to pass a state budget from today’s two-thirds majority in both houses of the Legislature to simple majorities in both places.

What opponents say it is: A plot to weaken the requirement for a two-thirds majority in both houses in order to pass any tax increase.
It can often be illuminating for voters to examine the actual text of a measure when evaluating competing claims about it. This is one of those times.

So here’s what Proposition 25 says, in its Section 3: “This measure will not change Proposition 13’s property tax limitations in any way. This measure will not change the two-thirds requirement for the Legislature to raise taxes.”

Then, in Section 4, it adds, that “Nothwithstading any other provision of law the budget bill and other bills providing for appropriations related to the budget bill may be passed in each house by roll call vote , a majority of the membership concurring ”

Opponents are fixating on that passage in Section 4, saying it essentially contradicts the statement from earlier in the initiative.

Sacramento lawyer Steven Merksamer, once chief of staff for ex-Gov. George Deukmejian and now a lawyer and lobbyist usually representing conservative interests, insists the second paragraph completely supersedes the initial statement of the Proposition 25’s purpose.

He and others claim that if tax increases are included in a budget bill they could be passed by a simple majority right along with the spending provisions every budget contains.

Wrote Jon Coupal, president of the Howard Jarvis Taxpayers Association, which fights anything it believes might make taxes easier to increase, Proposition 25 “would make it easier to circumvent Proposition 13’s requirement of a two-thirds vote to increase state taxes.”

Coupal sees the initiative and the impasse that reigned in Sacramento for months after the June 30 deadline for a new budget to take effect as two parts of a longtime plot by Democratic legislators to get rid of the two-thirds-vote requirement for taxes.

Democrats, meanwhile, say this measure is about only one thing, and that is getting budgets passed quickly. They contend that if they tried to sneak new taxes into any majority-vote budget, they would immediately be dragged into court and defeated.

The state’s nonpartisan legislative analyst’s overview of Proposition 25 appears to back the Democrats’ view. That analysis notes that since the measure’s own statement of purpose and the ballot description written by Attorney General Jerry Brown both say it would preserve the two-thirds barrier to new taxes, courts would have no choice but to nix any tax passed on a majority vote, even if it were included in a budget bill.
But there’s one claim by the opponents that is indisputably valid: They say simple majority budget votes would remove the veto power the Legislature’s minority party now can exercise in debates about spending priorities. That’s the way it works in 47 other states. Only Arkansas and tiny Rhode Island now join California in requiring two-thirds budget votes.

As things are now, the minority Republicans possess a few votes more than the one-third they need to stop passage of any budget. But Democrats have large majorities in both the Assembly and state Senate. So they could pass any spending plan they liked if it only took a simple majority.

In fact, they’d have to do that to avoid the freeze on legislative salaries and expense payments that Proposition 25 would impose during any time period between the legal deadline for passage and the actual date a budget was approved.

But the Democrats still might find themselves stymied by that old two-thirds bugaboo. For Proposition 25 does nothing to the longstanding requirement for a balanced budget, and if Democrats were to go on a spending binge after approval of majority votes for budgets, they would have to look somewhere for revenue to fund it.

Yes, legislators at times have tried to put the “fee” label on things that normal people consider to be taxes. But if the majority tried that too obviously and too often and in too large an amount, that also would end up in court and most likely be overturned.

So it’s for sure that the majority vote would decrease the influence of the minority party, right now the Republicans. But no, it would not give the majority a totally free hand. And it might just speed things up and avoid the seemingly annual ritual of the state controller issuing warrants, or IOUs, to cover state debt.

Which means this is one proposition that ought to pass, regardless of any twisted interpretations its opponents try to attach to it.

SACRAMENTO - The Yes on Proposition 25, Citizens for an On-Time Budget committee has sent a letter to radio stations around California demanding that opponents pull false and misleading advertisements off the air.

The letter states in part: “… your station has begun to broadcast an advertisement, sponsored by the campaign committee opposing Proposition 25, which contains demonstrably false statements about the effects of the ballot measure – statements which have been refuted by a California Court of Appeals in a very recent court decision. We ask that you stop broadcasting this completely discredited ad.”

Olson Ad Pull Memo.pdf

Get the gridlock out of Sacramento

The two-thirds threshold for passage of a budget is not the only source of dysfunction in Sacramento, but it has been a significant hurdle to allowing the California Legislature to perform its most basic duty. The dance has become all too familiar - and costly to the state. The minority Republicans hold up the budget, extract concessions and the stalemate endures until the state is out of cash. On Friday, legislators set yet another record for the longest overdue budget. The constitutional deadline to have finished the spending plan for this fiscal year, which began July 1, was in mid-June.

California is one of just three states that requires a supermajority for passage of a budget. The others are Rhode Island (also two-thirds) and Arkansas (which imposes a three-fourths threshold). California is the only state that requires a two-thirds vote for its legislators to both pass a budget and approve any tax increase.

Proposition 25 would allow budgets to be passed by a simple majority. It would not, however, affect the two-thirds requirement for tax increases.

This change is long overdue. Californians are bearing a high cost of the budget gamesmanship, from the IOUs and furloughs being used to ration cash, to the millions of dollars a day that are piled onto the deficit when the state enters a new fiscal year on spending autopilot. The budget inevitably closes with a deal laden with pork projects or other concessions for a holdout politician whose demands would not otherwise fly in a more democratic process.

The move to a majority-budget vote is a critical component of what must become a more sweeping overhaul of this state's highly volatile and patchwork systems for raising revenue and spending money. A comprehensive reform would include moving to a two-year budget cycle, establishing a more robust rainy-day fund, evaluating spending with program performance and assuring that one-time bumps in revenue do not lead to ongoing spending commitments.

Considering the gridlock that has resulted from the two-thirds budget threshold, it might seem inconceivable that someone could seriously propose expanding the supermajority requirement on the Legislature. But that is exactly what oil, alcohol and tobacco companies had in mind when they bankrolled the signature drive for Proposition 26, which would require a two-thirds vote for any fees that do not fit within a narrow definition in which the payer receives a direct service, access to property or permit.

The measure would make it far more difficult for state legislators to assess fees on products and activities to offset impacts. Environmental groups are particularly concerned that Prop. 26 would undercut fees that fund mitigation and research programs on toxic substances and pollutants.

Under the measure, local governments would need to obtain two-thirds voter approval for fees they impose that go beyond the limited "direct service" standard. The business groups pushing Yes on 26 call them "hidden taxes." But their narrow definition of legitimate direct fees would mean that the burden would shift to all taxpayers. The burden would be on state and local governments to prove otherwise.

Californians should reject Prop. 26.

Among the many reasons the Legislature is unable to pass a budget on time is the constitutional requirement that it receive a two-thirds vote in the Assembly and Senate.

The rule has been part of the California Constitution since 1933. It did not seem to be an impediment to passing a budget until the last three decades. Since 1980, legislators have met the June 15 constitutional deadline to send the budget to the governor only five times.
An unwillingness by both parties to compromise and a lack of cooperative bipartisan effort by all 120 legislators at committee and subcommittee levels has resulted in a budget standoff that belatedly gets resolved by just five elected officials, the governor and the four party leaders in the Legislature.

Proposition 25 seeks to make it easier to pass a budget by eliminating the two-thirds vote rule from the state constitution and by docking legislators pay if they miss the deadline.

It is likely that passage of Prop. 25 will result in on-time budgets, which would prevent the state form issuing IOUs or making late payments to contractors. But there are no guarantees that the budget process would improve.

Opponents of the measure claim that getting rid of the two-thirds rule would allow the Legislature to also pass tax increases with a simple majority vote despite a constitutional requirement that new or increased taxes need a two-thirds approval by both the Senate and Assembly.
Opponents fear that tax increases could be included in budget appropriations bills that would supersede the current two-thirds vote rule for raising taxes.

However, backers of Prop. 25 say the two-thirds vote requirement for tax increases will remain intact. They refer to the section of the measure that states its "purpose and intent." It reads: "This measure will not change Proposition 13's property tax limitation in any way. This measure will not change the two-thirds vote requirement for the Legislature to raise taxes."

We believe that the clearly stated intention of Prop. 25 has considerable legal and political weight. Courts are not likely to rule against an unambiguous statement of intent. If legislators tried to sneak a tax increase into a budget-related bill they would risk the enmity of the voters.
Prop. 25, we believe, will not lead to majority-vote tax increase, but will significantly improve the chances that future California budgets will pass on time and deserves a yes vote on Nov. 2.

Yes on proposition 25: This increases the chances for California lawmakers to pass future budgets on time

09/10/2010

AMONG THE many reasons the Legislature is unable to pass a budget on time is the constitutional requirement that it receive a two-thirds vote in the Assembly and Senate.

The rule has been part of the California Constitution since 1933. It did not seem to be an impediment to passing a budget until the last three decades. Since 1980, legislators have met the June 15 constitutional deadline to send the budget to the governor only five times.
An unwillingness by both parties to compromise and a lack of cooperative bipartisan effort by all 120 legislators at committee and subcommittee levels has resulted in a budget standoff that belatedly gets resolved by just five elected officials, the governor and the four party leaders in the Legislature.

Proposition 25 seeks to make it easier to pass a budget by eliminating the two-thirds vote rule from the state constitution and by docking legislators pay if they miss the deadline.

It is likely that passage of Prop. 25 will result in on-time budgets, which would prevent the state form issuing IOUs or making late payments to contractors. But there are no guarantees that the budget process would improve.

Opponents of the measure claim that getting rid of the two-thirds rule would allow the Legislature to also pass tax increases with a simple majority vote despite a constitutional requirement that new or increased taxes need a two-thirds approval by both the Senate and Assembly.

They cite Prop. 25's addition of Section 12(e) to Article IV of the state constitution. It states, "notwithstanding any other provision of law or this constitution, the budget bill and other bills providing for appropriations related to the budget bill may be passed in each house by roll-call vote entered in the journal, a majority of the membership concurring."

Opponents fear that tax increases could be included in budget appropriations bills that would supersede the current two-thirds vote rule for raising taxes.

However, backers of Prop. 25 say the two-thirds vote requirement for tax increases will remain intact. They refer to the section of the measure that states its "purpose and intent." It reads: "This measure will not change Proposition 13's property tax limitation in any way. This measure will not change the two-thirds vote requirement for the Legislature to raise taxes."

We believe that the clearly stated intention of Prop. 25 has considerable legal and political weight. Courts are not likely to rule against an unambiguous statement of intent. If legislators tried to sneak a tax increase into a budget-related bill they would risk the enmity of the voters.
Besides, if Prop. 25 should ever result in tax increases passed by a majority vote, there almost certainly would be another ballot initiative drawn up to protect the two-thirds rule on taxes.

Prop. 25, we believe, will not lead to majority-vote tax increase, but will significantly improve the chances that future California budgets will pass on time and deserves a yes vote on Nov. 2.

Tuesday’s dead-end debate over a state budget is exhibit A in the argument for Proposition 25 on the Nov. 2 ballot.

Tuesday’s failed vote — falling on day 80 of the budget stalemate — was something between a Kabuki dance and a charade.

Still, it illustrated a fundamental and chronic problem in California — the near-impossibility of getting a sensible budget approved given the entrenched partisanship at the Capitol and the requirement for a two-thirds majority to approve a spending plan.

Proposition 25 would correct this problem by lowering the threshold for passing a budget to a simple majority vote, equivalent to the systems in place in New York, Illinois, Texas and 44 other states.

California, which boasts the worst credit score of any state, is one of only three states that require a two-thirds vote. In fact it is the only one that requires a two-thirds vote to approve a budget and to raise taxes.

For those who fear this measure would cut the restraints on big spenders in Sacramento and lead to all kinds of mischief, rest assured. Proposition 25 specifically states that it only lowers the two-thirds requirement on the budget. The Legislature would still have to meet the super-majority threshold to approve tax increases.
Proposition 25 simply ensures that the budget process can no longer be hijacked by a small minority of politicians, some of whom only switch their votes after working deals that protect the interests of their district or themselves.

It’s undemocratic. It’s indefensible, and it’s the single biggest reason for the gridlock and dysfunction of Sacramento.

Furthermore, Proposition 25 would hold legislators accountable for not approving a budget on time. If they don’t send a budget to the governor by June 15, as required by the state Constitution, they don’t get paid. It’s as simple as that.

Voters need to ignore the doom-sayers opposing Proposition 25, many of whom have the most to gain from continued gridlock in Sacramento. There is nothing appealing about the status quo. Californians can’t keep sending new lawmakers to the Capitol in handcuffs. Legislators need to be able to do their jobs and then be held accountable if they don’t — as occurs in 47 other states.

As is, California has created a system that ensures stagnation not accountability or efficiency.

For only the second time in state history, California has entered September without a budget. The state is embroiled in brinkmanship and finger-pointing and is on the verge of issuing IOUs again.

California needs to give its leaders a chance to succeed or fail. Leaving them to do nothing is not working. The Press Democrat recommends a yes vote on Proposition 25.

California badly needs someone, some party, to just make a decision about a state budget and be held accountable for the consequences.

The state has needed that for years.

But it's impossible while a two-thirds majority vote is required for legislative passage of a budget and a one-third minority can stand in the way.

Can't the governor and the two parties just get together and compromise? Figure out a solution that's acceptable to all three? One — and this is the key — that honestly balances the budget, closing a deficit projected at $19 billion?

No. Not an honest budget free of patchwork and gimmicks. Not one acceptable to all three: the governor, the majority and the minority.

Back in another epoch, yes. Back before term limits sapped lawmakers of experience and courage and expanded the power of special interests. Before right-wing radio entertainers scared Republicans. Before the politicians became so polarized.

And before a two-thirds majority vote also became necessary to raise taxes, a little-noticed feature of property tax-cutting Proposition 13 three decades ago.

Proposition 25 on the November ballot would help. It would reduce the required budget vote to a simple majority. But it would retain the two-thirds vote needed for tax hikes — despite what an apparently misinformed Gov. Arnold Schwarzenegger claims.

Two courts have ruled that Prop. 25 does not jeopardize the two-thirds tax vote.

The business lobby and the GOP — invariably the minority party in the Legislature — oppose Prop. 25, ostensibly because the two-thirds budget vote keeps spending down. Studies have shown the opposite.

Those final Republican votes needed to reach two-thirds too often are bought with pork, corporate tax loopholes or other payoffs. Business lobbyists broker the sales to benefit their clients.

While the dickering drags on, summer after summer, real people actually suffer. Vendors who sell to the state aren't paid. College students don't receive their Cal-Grant money. Child development centers are stiffed. Community colleges and even some K-12 schools are denied their promised funds.

Meanwhile, the state is a few weeks away from issuing IOUs again. And it can't borrow for building projects because there's no budget. Its bond credit ratings are the lowest in the nation.

The state Capitol doesn't function because the rules won't allow it. The budget is already two months late.

The gridlock was on noisy display Tuesday in both houses of the Legislature when two budget options were debated and voted on — the Democrats' and a Republican version of Schwarzenegger's.

The Democratic bill received a simple majority vote in each house. The Republican-Schwarzenegger plan didn't come close.

Of course, the Democratic budget relied on $4.5 billion in corporate, income and oil taxes that would have required a two-thirds vote. That would have been impossible to obtain, at least at this stage.

So what good would a majority-vote budget be? It would at least get things moving. The majority party could adopt its spending priorities. The governor could line-item veto excess spending.

Moderate Republicans — presumably there'll be a few more when open primaries and redistricting reform take effect in 2012 — might be willing to compromise on taxes if a budget could proceed without them. Jump aboard or be left behind.

This year, a budget ultimately will be enacted, although all sides seem on pace to leave the problem for the next governor and Legislature. Whatever is passed must be cobbled together with borrowing and tricks.

The immediate problems:

*Democrats cut programs by $30 billion last year and are willing to whittle some more but are about done with kicking the lame, the elderly and kids. Schwarzenegger and Republicans have proposed eliminating state welfare and child care for impoverished moms seeking work. Democrats won't go there.

*Republicans point out that the state raised taxes temporarily last year, and voters rejected an extension. A recession is no time to hike taxes again, they say.

"I went down your path," Sen. Roy Ashburn (R-Bakersfield) told Democrats during the Senate floor debate, practically apologizing for his vote to increase taxes. "I did something Republicans don't do."

And speaking to "Mr. and Mrs. California," Ashburn pledged: "I will never raise your taxes again."

If you're a tea-leaves reader, however, you'll note that the term-limited senator used the verb "raise." The Legislature could delay scheduled corporate, income and sales tax cuts for another year or two. That technically wouldn't be "raising" taxes. And it could pick up a few billion.

*Schwarzenegger sees the political grim reaper as he nears the end of his term. He frets about his legacy and all those unfulfilled promises of "reform."

His pitch for the history books: Legislators "have fought me on every step of the way," as he told the San Francisco Chamber of Commerce on Tuesday.

Never mind that Schwarzenegger has yet to master the art of dealing with politicians, as fellow Republican Govs. Pete Wilson and George Deukmejian did while holding various offices for many years. There's an advantage to being a "career politician."

Regardless, Schwarzenegger has vowed not to sign a budget that isn't accompanied by budget, pension and tax reforms.

Democratic leaders tell me they're willing to deliver those reforms "in a heartbeat," as one says. But they need something from the governor in return — some give on taxes.

So Schwarzenegger needs to step up and make a decision about how long he's willing to let this budget debacle drag on — and how badly he wants those reforms for his legacy.

george.skelton@latimes.com

Prop. 25 is the real deal

Despite opponents' claims, the initiative's aim is merely to allow legislative passage of the state budget by a simple majority vote.

George Skelton
Capitol Journal

July 26, 2010

From Sacramento

It's the oldest and most successful strategy for fighting ballot measures: Argue that a proposal "is not what it seems."

Don't necessarily argue against the merits of the measure's intent. That's often a weak case.

Instead, strive to confuse. Point to "drafting flaws." Warn of "unintended consequences."

As in:

This proposition purports to offer free apple pie. You may like apple pie. But don't be fooled. This is not apple pie. It's a crab apple tart.

The tart tactic is in play by business interests and conservative ideologues against Proposition 25 on the November ballot. The initiative is sponsored by public employee unions and endorsed by the League of Women Voters.

The measure would reduce the Legislature's herculean vote requirement for budget passage from a two-thirds to a simple majority. The two-thirds hurdle is the single biggest cause of dysfunction in the state Capitol.

Just two other states — Arkansas and Rhode Island — require a two-thirds budget vote. California is the only state that mandates a two-thirds vote for both budgets and taxes.

Prop. 25 would retain the two-thirds vote for tax increases.

It also would decree that if legislators didn't pass a budget by the rarely met June 15 constitutional deadline, they'd forfeit all salary and expense reimbursements for each day they dallied.

"This is a clear, simple reform," says campaign manager Richard Temple.

Not so fast, contend opponents. It's not what it seems.

They argue that Prop. 25 also could allow tax increases to be passed on a majority vote.

Now it starts to get confusing.

The opposition's thesis is that if a tax hike funded a budget appropriation, it could be approved on a majority vote. That's because of a clause in the measure that states: "Notwithstanding any other provision of law … bills providing for appropriations related to the budget may be passed [by] a majority."

Prop. 25 is "a fraud on the voters," says opposition attorney Steve Merksamer, a longtime initiative lawyer for business interests. "It's misleading."

Nonsense, counter the supporters. Right in the proposition's "purpose and intent" section it reads: "This measure will not change the two-thirds vote requirement for the Legislature to raise taxes."

But Merksamer says that is superseded by the "notwithstanding any other provision" language.

"Unbelievable and incorrect," responds Prop. 25's attorney, veteran Democratic and initiative lawyer Lance Olson. The routine "notwithstanding" clause was included to differentiate between budget and non-budget appropriations, Olson says.

"Courts look at the intent language and at the intent of the voters. Can you imagine a court saying, 'No matter what voters meant …?' No court would do that."

The legislative analyst, in a Prop. 25 overview to be included in the official voter information guide, tells the public that the measure's intent is to leave the two-thirds tax vote unchanged.

And the tentative ballot label that voters will see, written by Atty. Gen. Jerry Brown, proclaims that the measure "retains [the] two-thirds vote requirement for taxes." Don't be surprised if Merksamer challenges that in court.

Opponents also claim to have found another flaw in the proposal: It would deny voters the right to repeal budget-related acts through the referendum process. They essentially don't have that right now.

But, critics argue, at least the bills currently require a two-thirds vote. That trade-off — making a bill hard to pass but exempting it from voter repeal — no longer would exist. Money bills would be easier to pass and still couldn't be repealed.

Then there's a third claim that seems far-fetched: On a majority vote, legislators could boost their per diem pay to compensate for lost wages when budgets were late.

And then they'd face mass recall.

"They're trying to scare people into contributing [money] to the 'no' side," says Prop. 25 spokesman Richard Stapler.

If a Legislature ever did try to play games like the ones the opponents assert, Stapler adds, someone "would go to a judge faster than you could say 'lawyer.' And the Legislature would be on the losing end."

"The things they talk about are so absurd they're laughable."

But one legitimate concern of opponents is that legislators could merely pass a bogus, half-baked budget by the deadline to preserve their pay, then slumber into summer in stalemate on a real deal. That would be unconscionable if only a majority vote were needed.

Yet, almost anything would be better than the current system of minority-party tyranny and insufferable gridlock.

Vendors are stiffed. Bond ratings fall. And state spending actually rises.

In the mid-1990s, a bipartisan citizens commission concluded: "There is no evidence [the two-thirds vote] does anything to slow the increase in state spending. Instead, it encourages horse trading [and] pork-barrel legislation.... Stories abound of 'buying' votes to reach the two-thirds."
Business interests benefit from the horse trading. Skilled lobbyists broker the needed GOP votes to open tax loopholes and provide other goodies for their clients. They love the two-thirds vote.

So do Republican legislators. It makes them relevant as hostage-takers.

The latest nonpartisan Field poll shows that likely voters overwhelmingly support the measure, 65% to 20%. This includes 58% of Republicans.

But opposition strategist Rick Claussen logically surmises that this is because the proposal would punish legislators financially if they failed to pass an on-time budget. "A lot of Republicans think 'My God, this is exactly what I've wanted to do,' " he says.

"We've got to convince them this is a sham" — crab apple.

But it's actually apple pie — just what it seems.

george.skelton@latimes.com
Copyright © 2010, The Los Angeles Times

“We all know the problems with the budget process,” said Lou Paulson, president of California Professional Firefighters. “Late budgets give special treatment to corporate special interests and leave regular Californians paying the costs with no way to hold anybody accountable. Late budgets also have unacceptable consequences. When last year’s budget was late, California issued 450 thousand IOUs to state employees, and countless small businesses that depend on business from the state. Many of these businesses provide vital support for firefighters on the front lines battling wildfires. The IOUs cost taxpayers over 8 million dollars in interest payments alone. This initiative changes that broken budget process.”

 The Majority Vote Budget Initiative does exactly what it says. It will:

• Finally hold politicians accountable by requiring every member of the legislature to forfeit a day’s pay and expenses for every day the budget is late, and they won’t be allowed to pay themselves back when a budget is passed.
• Change the vote requirement to pass the state budget to a simple majority just like 47 other states have.
• Retain the constitutional requirement for a 2/3 vote to raise taxes.

For more information on the Yes on the Majority Vote Budget Initiative visit www.EndBudgetGridlock.com.
###

Teachers, Firefighters, and Nurses for an On-Time Budget ~ ID#1323713
Labor donated, computer generated

SACRAMENTO – Midnight came and went last night and for the 23rd time in the past 24 years, California State Legislature once again missed another budget deadline, underscoring the need for voters to say “Yes” to the Majority Vote Budget Initiative, which would lead to California’s budget being approved by a majority vote.

“It’s time to end the budget gridlock and political gamesmanship that come with being one of only three states that requires a 2/3 vote to pass the budget,” said California Federation of Teachers President Marty Hittelman. “This will be our 23rd late budget in the last 24 years in California. Late budgets hurt our schools, our economy and the people that depend on vital services the state provides. A Majority Vote Budget is an important first step for common sense reform of the budget process.”

The Majority Vote Budget Initiative is currently in signature verification and will be on the ballot in November. The Majority Vote Budget Initiative does three things:

1) Reforms California’s budget process by requiring the state budget to be passed with a simple majority. Majority approval of state budgets works well in 47 other states and in the Federal government. There is no reason why California should be any different.

2) Maintains the two-third vote requirement for any tax increases.

3) Holds politicians accountable for failing to do their job: If legislators fail to pass a budget on time, they don’t get paid and they can’t pay themselves back later.

For more information on the Yes on the Majority Vote Budget Initiative visit www.EndBudgetGridlock.com.

SACRAMENTO, Calif.—California voters might not agree on how to solve the state's $19 billion deficit, but a new poll finds an appetite for changing the budget process.

According to a survey released Wednesday by the Public Policy Institute of California, 51 percent of likely voters support lowering the two-thirds threshold for the Legislature to pass the budget each year.

Support drops to 44 percent if the state went to a simple majority for passing both the budget and tax increases.
The poll also found that nearly eight in 10 adults support pay-as-you-go budgeting, which would identify a funding source for any new or expanded programs.

Other popular ideas include changing to a two-year spending plan and cutting off lawmakers' pay whenever the state budget is late.

Supporters of a proposal to eliminate the two-thirds requirement for the Legislature to pass a budget will begin submitting more than 1 million signatures to county election officials across the state Friday.

The measure, backed by a consortium of labor unions and Democratic leaders in both legislative houses, would allow budgets to be passed by a simple majority vote. Votes to increase taxes would still require a two-thirds vote.

Andrew Acosta, a spokesman for the initiative campaign, said they have until Monday to submit their signatures. In order to qualify for the ballot, they must submit more than 694,000 valid signatures.

Opponents of the measure say it would make it easier for Democrats to pass budgets full of new fee increases, which only require simple majority votes. A separate measure backed by business groups including the California Chamber of Commerce would require a two-thirds vote to raise fees as well. That measure began submitting signatures Thursday, according to initiative spokesman Rick Claussen.

When a measure is submitted to county officials, counties have eight working days to perform a hard count of the number of petitions submitted. The counties then have 30 working days to perform a random sampling of ballots to check for valid signatures.

Published in the Sacramento Bee Wednesday, Apr. 21, 2010

By Bill Lockyer

Every year, budget gridlock and the political games that surround it in Sacramento force me to issue dire forecasts about our state's finances. Our current system has created dysfunction and it results in late budgets year after year.

Every year just a few politicians hold the entire budget hostage for weeks – sometimes months – on end. Every year, these political stalemates deny Californians real budget-deficit solutions – and threaten the state's bond credit ratings.

The ultimate victims of these annual budget breakdowns are taxpayers and families up and down the state. They're the ones who pay for the ratings downgrades we've already suffered. They're the ones who pay the interest on IOUs issued by the government of the world's eighth-largest economy.

They didn't cause this mess. But they're paying for it. How much is enough? Because of our chronic budget problems, California currently has the lowest credit rating of the 50 states. That's not just embarrassing; it's expensive.

Our ratings literally will cost taxpayers hundreds of millions of dollars every year when we sell bonds to build roads, schools and other infrastructure vital to our future. Last year, due to the state budget gridlock, California was forced to issue more than 450,000 IOUs worth $2.6 billion. And while our politicians bickered, teachers, firefighters and public safety officers were handed pink slips, putting our schools and public safety at risk.

The people of California deserve better from their elected leaders.

The Majority Vote Budget Initiative is one way to help improve California's budget process. Proponents are gathering petition signatures to place the measure on the November 2010 ballot. The initiative's three provisions would: Require the state budget to be passed with a simple majority; protect taxpayers by maintaining the two-thirds vote requirement for any tax increases; and hold politicians accountable for failing to do their job.

It's simple: When this measure passes, if legislators fail to pass a budget on time, they don't get paid and they can't pay themselves back later.

Majority approval of state budgets works well for 47 other states. There is no reason California should be any different.

Every year, I call on the governor and Legislature to focus on what it takes to balance the budget honestly and on time.

Every year, I urge them to narrow, not expand, the list of their disputes and to stop using budget negotiations to score points with political allies or against partisan opponents.

Every year, I hope they will surprise Californians and balance the budget on time and focus on the business of getting our state back to work.

But every year, I'm disappointed.

These budget games aren't confined to tough economic times. And they aren't played by just one political party.

The recession has ravaged California's revenue, but it's not to blame for California's budget gridlock. The last time the state had an honestly balanced budget was 1997, 10 years before the recession started battering home values and tax revenue.

Even when I was in the Senate serving as its leader in the 1990s, legislators of both parties routinely used the two-thirds vote requirement to hold up the budget until they got fed their favorite pork projects.

California's budget process is broken. But we can fix it. We can start by passing the Majority Vote Budget Initiative.

It's time for common sense reform that protects taxpayers, holds legislators accountable and ends the budget games.

I don't pretend this measure will solve all of California's budget problems. Some will say it doesn't go far enough.

Others will say it goes too far.

I believe the Majority Vote Budget Initiative strikes the right balance. Allowing the budget to be passed with a majority vote – while still requiring a two-thirds vote requirement for tax increases – is a good compromise that will work for Californians.

It will protect taxpayers and help lawmakers and the governor get the job done. And it won't lead to any more spending than the current budget process. It's interesting that the folks who so ardently defend the two-thirds rule are the same ones who constantly complain about out-of-control spending. Clearly, the current system cannot be counted on to prevent profligate spending, if that's your concern.

The Majority Vote Initiative is a small but logical first step toward fixing our broken system. It will allow our legislators to do what we elected them to do: debate, compromise and offer solutions to California's problems.

Bill Lockyer is the treasurer of the state of California.

The Natomas Unified School District paid $300,000 in interest this school year – enough to have saved three counselors from being laid off – on a $12 million loan to keep its lights on and staff paid.

It took out the loan because the state of California has failed to send money in a timely fashion, deferring payments to the school district until the state can come up with the money it owes Natomas Unified for operations for the current school year.

The state in general sends fewer dollars to California schools these days – a total of $18 billion less over the last two years. And much of the money districts do receive is coming late – sometimes as much as five months after the payments originally were scheduled.

Instead, when the due date comes for state payments, districts are getting only a percentage of what they are owed. For example, $2 billion of the amount that the state was supposed to send public schools in February won't show up until July. An additional $1.7 billion due in April and May will show up in August. The bulk of the June payment has been pushed off until July, the beginning of the 2010-11 fiscal year.

"What happened with the state over the years is they've started a habit of borrowing from the next year and they've imposed that on school districts," said David Gordon, schools chief for Sacramento County. "It's a dysfunctional way of operating."

As of 2008, all four of the payment delays have been built into law. In addition, school districts will see three other late payments this year, for now characterized as one-time deferrals.

That means districts counting on state funding to cover costs such as teacher salaries and school supplies face seven delayed payments. And the state says payments will be delayed at least seven times again next school year.

A March 30 letter from the state Department of Finance says districts collectively should expect three one-time deferrals of $2.5 billion next school year. July's payment will be 60 days late, October's payment 90 days late and the March payment 30 days late – unless the Legislature decides to pay even later.

Assemblywoman Julia Brownley, D-Santa Monica,who chairs the Assembly's Education Committee, said the deferrals are regrettable but necessary during "one of the worst fiscal crises the state has ever faced."

She said the state opted to defer payments to schools to avoid the expense of taking out loans to pay its own bills.

Districts can apply for an exemption from the deferrals – but essentially only if they are facing bankruptcy.

"You need to show that you can't borrow, that you've exhausted your local remedies and would otherwise need state help," said the state Department of Education's Scott Hannan.

The state hasn't yet told districts how much of what's owed them individually will be deferred next school year – that information will be posted on the Department of Education Web site later this week.

"We're sitting on pins and needles," said John Christ, assistant superintendent at Natomas Unified.

He said the district is expecting to take out a larger loan for next year: "The $12 million may grow to $15 million."

The loans cost districts more than the interest, Gordon said. They require staff time, attorneys to draw up documents, and reviews by county Office of Education staff.

So far, most local districts have managed to avoid taking out loans, juggling finances through layoffs and program cuts, digging into reserves and borrowing from funds dedicated for other expenses, such as pensions and facilities. But even these internal loans usually result in cuts, as state law requires they be paid back from the general fund with interest.

Natomas Unified has cut $21 million from its budget in the last two years. "We're cutting. We've been cutting, and we'll continue to cut," Christ said.

Most area districts are considering taking out loans to get through next school year. Among them: Twin Rivers Unified; Elk Grove Unified; Sacramento City Unified; and San Juan Unified. The El Dorado County Office of Education is looking into loans for multiple districts.

But getting a loan may not be that easy.

Terena Mendonca, associate superintendent of the El Dorado County Office of Education, said California's poor bond rating is making it difficult for districts to issue the short-term notes they use to raise revenue. She said interest costs have also increased.

"We live with the effects of being funded by the state, which makes us unfavorable in the market," Mendonca said.

© Copyright The Sacramento Bee. All rights reserved.

Republican senators are holding out for a reason other than principle.
by The Fresno Bee

If Senate Republicans were delaying a state budget purely for reasons of fiscal and political principle, they'd be in better standing to defend the mounting consequences.

But that's not the reason the senators met Wednesday and were unable, after five frustrating weeks, to enact a spending plan.

As Gov. Arnold Schwarzenegger and Sen. Abel Maldonado, R-Santa Maria, made clear Wednesday, Senate Republicans are holding out for an unrelated cause.

At the behest of oil companies and other industries, the GOP leadership is seeking a law that would prevent lawsuits against local governments, oil refineries and other industries, under the California Environmental Quality Act, for failing to assess their global warming impacts when planning an expansion.

Unless a final budget bill includes this exemption from CEQA, the Republicans are poised to shut down government services, including payments to hospitals and health clinics that care for the elderly and infirm.

This spurious crusade started on June 21, when the California Chamber of Commerce, the Building Industry Association and other groups sent a letter to the governor and legislative leaders seeking an urgent exemption from CEQA.

In this letter, the groups claimed that Attorney General Jerry Brown and environmental groups were misusing CEQA and the state's global warming law to file "premature and unwarranted lawsuits" that could delay "vital housing, commercial and public infrastructure projects."

Without a doubt, the sweeping nature of the California Environmental Quality Act makes it ripe for abuse. In Sacramento and elsewhere, lawsuits have stopped or slowed affordable housing projects and infill development -- a factor that often encourages developers to build on the periphery of cities, adding to traffic congestion and air pollution.

To date, however, the attorney general has been pursuing policies entirely consistent with the state's environmental goals. In San Bernardino County, supervisors had adopted a growth plan that was sure to facilitate more spread-out development, air pollution and greenhouse emissions. Brown's intervention has prompted the county to consider sensible changes. Other local governments are taking notice, which could lead to new communities that are more suited to transit and less dependent on the automobile.

If anything, the Chamber of Commerce and other groups should be thankful that Brown is encouraging wiser transportation planning. Transportation accounts for one-third of the state's greenhouse emissions, and California's law mandates a 25% reduction in all emissions by 2020. If the state doesn't have a strategy for reducing emissions from transportation, utilities and industries will likely be forced to make up the difference.

A recent poll by the Public Policy Institute of California revealed that global warming has become a top environmental concern among Californians, second only to air pollution. If the state hopes to confront both of those challenges, it must change the way communities are planned. Politicians and industries that are leading the 21st century economy understand that imperative.

Unfortunately, too many remain stuck in the past -- and the state budget remains stuck in limbo.

Tell us what you think.