California voters are angry and cynical. Polls show deep dissatisfaction with how the governor and Legislature have handled the state's fiscal crisis.
Many voters will be tempted to punish politicians, either by skipping the May 19 special election or by rejecting all six budget measures on the ballot. Either of those responses would be a mistake.
The outcome of the May 19 election could be the most crucial of any in a decade. If voters choose wisely, they could help close the state's deficit, an essential step for selling bonds, investing in public works and helping to stimulate the economy.
By contrast, a knee-jerk rejection could send the state back into a financial spiral and force lawmakers to enact further cuts to K-12 schools, higher education and social services.
An all-out rejection would play into the hands of anti-tax zealots who have a kamikaze strategy of tanking the state (theoretically, so they can reconstruct it to suit themselves).
It would empower big unions that oppose a spending limitation reform that is part of the most important measure on the ballot, Proposition 1A.
All of these propositions are complicated. All are the product of imperfect compromises necessary for the Legislature to pass them under California's two-thirds vote requirement.
People can have reasoned differences about several of these. But a blanket vote against them would be a mistake. Voters need to study the propositions and the ballot arguments. We did, and here are our recommendations.
'Yes' on Prop. 1A
This measure was the linchpin for February's budget deal, and its passage is essential for California to get through the current crisis and avoid more in the future.
If passed, Proposition 1A would do three main things:
Extend by one or two years the taxes that lawmakers approved in February on retail sales, vehicles and income. This would generate an estimated $16 billion between 2011 and 2013, helping to bridge future deficits and preventing deeper cuts to schools and social services.
Give the governor new authority to make midyear spending cuts during periods when state tax revenue unexpectedly dips.
Establish a long-needed reform that would prevent lawmakers from spending surplus tax revenue during good times, so it could be saved for lean years.
This last provision is the strongest reason to support Proposition 1A. During a recession, no one wants to raise taxes. But given that lawmakers have already cut tens of billions of dollars from state programs, a temporary rise in taxes must be part of the overall solution.
Yet if Californians are to bear the sacrifice of a temporary tax hike, they had better get a prize in return. The spending limitation measure is that prize.
Under Proposition 1A, state spending could grow no more each year than the average of revenue growth in the 10 previous years. If tax revenue exceeded that amount, the state would place the surplus in a fund that could be spent only in years where revenues fell below a set level.
Proposition 1A is not as draconian as a rigid spending cap, such as the one that Colorado voters approved and then later suspended in 2005.
Nonetheless, it would slow down the growth of spending and bring it more in line with the growth of inflation and population.
Had it been in place since 1998, California would have experienced only minor deficits, not the multibillion-dollar budget gaps that have been so tumultuous the past decade.
It's time to shut down the roller coaster. Vote "yes" on Proposition 1A.
'No' on Proposition 1B
At first glance, Proposition 1B seems attractive because it promises more money for schools in future years.
But voters should give this proposition a hard look. It makes spending commitments that could be a burden on the state as soon as 2011 while doing nothing to end the volatility of education expenditures.
Here are the politics: To pass a budget deal, the governor and lawmakers needed to reduce school spending along with that of other state programs. To make a tax increase palatable to Gov. Schwarzenegger and a few other Republicans, Democrats reluctantly agreed to place a spending limitation measure, Proposition 1A, on the ballot.
The trouble was, both of these actions -- reduced school spending and a future spending limitation -- drew the wrath of the California Teachers Association, one of Sacramento's power players. So to keep the CTA from either upending the budget deal or opposing Proposition 1A, the governor and legislative leaders cooked up a sweetener -- Proposition 1B.
In essence, this measure would settle a long-standing legal dispute over how much the state owes public education under Proposition 98, a convoluted school spending measure voters passed in 1988. Proposition 1B pegs the amount owed at $9.3 billion and directs annual installments on this amount to begin in 2011. That would generate payments that, according to the Legislative Analyst's Office, would be billions higher than current law allows.
We support public education, but that support has to be weighed against the harm caused by ballot box budgeting. Measures such as Proposition 98 have compounded California's fiscal woes and done little to ensure stable funding for schools. Proposition 1B is another chapter in this regrettable history, and within just two years it could create spending obligations the state couldn't afford.
If voters were to reject this measure, the CTA likely would go to the courts to achieve what it couldn't through the ballot box. Let it rip. Politicians may need to cut deals to get budgets passed, but voters don't need to rubber-stamp those deals.
This measure is a bad one for California and voters should say "no" to it.
'Yes' on Prop. 1C
We're no fan of state lotteries, but California voters approved one in 1984 and show no sign of reversing that position.
So it is reasonable to ask: Is the state getting all out of the lottery that it could?
Proponents of Proposition 1C make a convincing argument that the answer is no. They note that the lottery is one of the lowest-performing in the country. It hasn't been modernized in 25 years.
Better marketing and higher payouts to players, they argue, could boost revenues in the future and provide an infusion now.
If Proposition 1C passes, the state would be authorized to borrow now against future proceeds that a revamped lottery would bring.
The governor and lawmakers are counting on that loan to plug $5 billion of the state's expected budget hole next year.
Without it, they would be forced to cut $5 billion from the state budget, including further cuts to social services, education, law enforcement and health care.
This proposition is the toughest nut on the May 19 ballot. Convincing arguments can be made that the state must curtail its borrowing and that it shouldn't be in the business of tempting Californians to gamble.
But those arguments have to be weighed against this reality: Since lawmakers struck a budget deal in February, the state's revenue shortfall has grown to at least $8 billion.
Rejecting Proposition 1C would widen the gap to $13 billion. Lawmakers would then need to make cuts that most Californians couldn't tolerate, resulting in political stalemate and another slow march to insolvency.
That's a gamble that California can't afford to make. Vote "yes" on 1C.
'Yes' on Prop. 1D
This proposition would redirect tobacco tax funds from early education programs to the state's general fund. It is another unpleasant but necessary step for balancing the state's budget in coming years.
At issue is the money the state collects under Proposition 10, a 1998 initiative that taxed tobacco to curb youth smoking and pay for early education.
Over the years, it has funded a range of worthy First 5 programs, including dental services for children, smoking cessation for pregnant women, preschool and health insurance.
It has also generated a fair amount of unspent tobacco tax money, roughly $2.5 billion as of June. Proposition 1D would redirect up to $608 million of that money this year and $268 million yearly through 2013 to the general fund. That diverted money could go a long way toward avoiding tough cuts to health and welfare programs that are outside of the First 5 realm, including programs that help kids and families.
Proposition 1D wouldn't come without pain. If passed, it could make planning harder for local First 5 programs. But it's a prudent way for lawmakers to avoid cuts that could have immediate effects on families. Vote "yes" on Proposition 1D.
'Yes' on Proposition 1E
This measure is the twin of Proposition 1D. It would redirect unspent mental health funds to the general fund, to backfill money that would otherwise be cut from health programs.
In 2004, then-Assemblyman Darrell Steinberg and others persuaded voters to approve Proposition 63. It increased the income tax on California's top earners to pay for expanded mental health programs.
Now, in 2009, Proposition 63 has been generating cash for a number of worthy programs, but most of them are in the development stage and roughly $2.5 billion remains unspent.
Meanwhile, without a source of funding, the state could be forced to cut several hundred million dollars from mental health programs that existed before Proposition 63 was passed.
Proposition 1E provides a solution. It would divert $230 million annually for two years so the state would not be forced to reduce screening for mental health problems.
This wasn't an easy measure for Steinberg to support. Mental health advocacy groups and the legislative analyst note that diverting funds could cause problems for local governments that are planning on using the initiative's money for homeless shelters and other programs.
But Steinberg, to his credit, has stood by his support of Proposition 1E. He sees it rightly as an issue of protecting current services over those that are planned.
Voters should display similar courage by voting "yes" on Proposition 1E.
'Yes' on Prop. 1F
This proposition would prevent lawmakers and other state elected officials from receiving pay raises if the state budget was expected to end the fiscal year in a deficit.
It is one of the concessions that Sen. Abel Maldonado, R-Santa Maria, extracted from Democrats and the governor as the price for his budget vote in February.
Maldonado, exploiting an issue that is likely to play well with outraged voters, says it's unacceptable that lawmakers would receive pay hikes in years in which they can't balance the state's books.
Thus he became the father of Proposition 1F, which would apply to the governor and lawmakers and, oddly, elected officials who have no budgetary duties, such as the secretary of state.
Pundits have dismissed Proposition 1F as a cynical ploy by a politician hoping to curry favor with voters, and it's hard to argue with that assessment.
On the other hand, there's no real downside to this measure and a slim chance it might apply some needed pressure on lawmakers.
We can think of better ways to accomplish budget reform, but if it makes you feel better to take a whack at lawmakers, go right ahead. We all need ways to brighten our spirits these days.
Voting "yes" on Proposition 1F could be the perfect medicine.