Props seek to fix state's budget woes

Proposition 1A would extend tax increases until 2012

By: Minh Pham

Posted: 5/13/09

Attempts to fix California's budget system will take place on May 19 in a special election.

The propositions in the ballot will have direct effects on issues such as funding for education, personal income tax increases and a possible spending cap.

One student says he will vote yes for all the propositions on the ballot this year.

"We need to start fixing things now, not wait until the problem gets bigger and bigger," said Jason Martin, a sophomore psychology major. "It's not the perfect solution, but anything in politics rarely is."

Proposition 1A, one of six propositions on the ballot, contains three main components. In February, Gov. Arnold Schwarzenegger and the California Legislature voted on a tax increase on state sales, personal income and vehicle registration license fees.

The passing of Proposition 1A would extend this tax increase until 2012 - 13 eating about $16 billion in tax revenues, according to the Web site of the Legislative Analyst's Office.

The second part of the proposition would make drastic changes to the "rainy day" fund, which is money from California's general fund put on reserve. It would save 12.5 percent of state revenues instead of the current 5 percent. Lastly, it would limit state pending, according to the Official Voter Information Guide.

Budget Reform Now, the official name for the "Yes on 1A" campaign, claims the proposition would provide short-term and long-term solutions to prevent facing huge deficits, according to its Web site. Some supporters of Proposition 1A are the California Teachers Association and Gov. Schwarzenegger.

Supporters of the official "No on 1A" campaign argue that the proposition holds a phony budget reform as well as deceptive information for voters. The proposition would allow the spending limit to be adjusted upward any time the legislature increases taxes, which means no spending discipline at all, according to its Web site.

President Lillian Taiz, of the California Faculty Association, said passing Proposition 1A would make planning for the California State University budget more unpredictable, because of the governor's power to make mid-year budget cuts to the CSU - even after a budget is adopted by the legislature, according to the CFA's Web site.

Members of Students for Quality Education, a student advocacy group that works with the CFA, have been collecting pledge cards on campus against Proposition 1A since the beginning of April.

"Right now is not the time to be cutting education and other services," said Julian Rosenberg, president of Students for Quality Education, "all so that we can put it into a savings account. We are in a huge deficit right now."

Attached to Proposition 1A is Proposition 1B, which would require funds from the Budget State Stabilization, to make supplemental payments up to $9.3 million to public schools and community colleges. However, the $9.3 million dollar price tag comes from the money already owed to aforementioned schools through the passing of Proposition 98, passed in 1988, which required the state to spend a minimum amount of its budget on the K-14 school system, according to the Web site of the Legislative Analyst's Office. Proposition 1B will only be enacted if Proposition 1A passes, but Proposition 1B does not need to pass for Proposition 1A to pass.

Proposition 1B is supported by California Teachers Association - California's largest employee organization, according to its Web site. The group argues that many schools will become insolvent if they don't receive funding soon, and that passing Proposition 1B would prevent future layoffs and class reductions.

"I would vote yes for Proposition 1B, but no on the rest of them," said Judith Housten, an undeclared sophomore. "We need to send the message that money for our schools is important, and that they can't trick us into voting for the whole package."

One student says she doesn't agree with having Proposition 1B on the ballot.

"Proposition 1B was just put on so that groups like the California Teachers Association won't campaign against Prop. 1A," said Michelle Pham, a senior political science major. "Passing 1B won't give schools new money, just the monies they were already owed."

Proposition 1C, called the "Lottery Modernization Act," would give the California lottery more flexibility in improving its performance, which could increase revenue. The expected revenue from Proposition 1C would be $5 billion and would be borrowed to balance the state's current budget deficit. The fiscal impact would mean more difficulty in balancing future state budgets, because of debt-service payments from borrowing and higher payments to education, according to the official voter information pamphlet.

With Proposition 1C, the state would generate more than $5 billion in revenues, which would prevent taxes from being raised and would protect schools from budget cuts, according to the official Yes on 1C's Web site.

State Sen. Bob Huff stated in a rebuttal to Yes on Prop. 1C's argument on the Official Voter Information Guide's Web site that the proposition is a huge gamble on revenues that might not even happen.

"This is not an immediate, responsible solution to our fiscal crisis and we don't know how this will play out in the long term," Huff stated.