Vote Yes on Proposition 25: Majority Vote to Pass a Budget

This is the fifth part of a series of posts giving recommendations on California’s propositions. This post recommends a “yes” vote on Proposition 25, which requires a majority vote in the legislature to pass a budget.

Proposition 26 will be the subject of the next post in this series.

The Structural Problems in California’s Budget Process…

Proposition 25 is the most important proposition being proposed this year. While Proposition 25 may not exactly ignite passion in the hearts of voters, it is far more important for California’s future than the much-debated Propositions 19 and 23.

To understand why this is so, one needs to take a look at the structure of California’s budget.

California’s budget is governed by a set of stringent regulations. Constitutionally, passage requires a two-thirds majority in the legislature. Proposition 13 mandates that tax increases also require a two-thirds majority in the legislature.

In both requirements, California is very much an exception. The general rule is that tax increases and budgets need only a majority vote. Several states, mostly in the West and South, require a supermajority for a tax increase. Only Arkansas and Rhode Island (an odd couple) mandate supermajority votes for budgets to pass.

No other state in the union, however, requires that both budgets and tax increases be passed with a supermajority:

Source: San Francisco Chronicle

A two-thirds majority for both tax increases and budget passage necessitates compromise between the two parties. Unfortunately, the ideological difference between Democrats and Republican is unusually wide in California. The Democratic Party in Mississippi is probably more conservative than many moderate Republicans on the national level, while the Republican Party in New York is probably more liberal than many moderate Democrats on the national level. In the Democratic stronghold of California, however, the Republican Party’s positions lie quite far to the right on the national spectrum.

Combined, these factors make passing a budget in California one of the hardest endeavors in American politics. Since 1980 – shortly after the two-thirds requirement for tax increases was instituted – California has passed an on-time budget a grand total of five times. Every budget is subject to torturous negotiations as state officials desperately attempt to reach the two-thirds supermajority requirement (imagine the chaos that would take place if the House of Representatives required a two-thirds vote to pass a budget!)

This has quite negative implications for the well-being of California. Constant budget fights have done bad damage to California’s image, hurting private investment and creating great uncertainty. Budget impasses hurt public sector workers and public services provided by the government.

And How Proposition 25 Solves One of Them

Proposition 25 ends the two-thirds requirement to pass a budget. This will make passing budgets substantially easier, and it constitutes one part of a plethora of necessary reforms in fixing California’s flawed budget system.

There are some that oppose Proposition 25, arguing that it constitutes a union-backed power grab for California’s Democratic Party – and that it therefore ought to be opposed.

It is true that Proposition 25 is funded by unions, and that it will benefit the Democratic Party in California (which has a majority in the legislature). But just because a proposition helps one party or another doesn’t mean that it deserves opposition. Getting more people to vote would probably help the Democratic Party, but nobody argues that higher voter turn-out is a bad thing because of that.

Moreover, there is an easy way for Republicans to stop Proposition 25 from benefiting Democrats: they can win elections, and take over the legislature. This is what happens in 47 other states and the federal government. It works much better than what happens in California.

Passing Proposition 25 will not end budget crises; even if passed, there will still be a number of problems with California’s budget. Tax increases will still require supermajority votes, for instance. California’s budget still relies too much on income taxes, which fall steeply during recessions, as a result of Proposition 13. Solving that problem necessitates a larger rainy day fund. Then there is reforming the broken proposition system itself.

But despite all this, Proposition 25 is a fundamental reform to California’s broken budget process. It constitutes a change that is vitally important for California’s future well-being – even if, horror of horrors, it happens to help the Democratic Party.

That is why I strongly, strongly recommend a “yes” vote on Proposition 25.

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