Gloger is a policy fellow at the Pacific
Wolf in Sheep's Clothing
lurks, ready to consume new taxes
[Andrew Gloger] 2/27/04
scored a political victory in his campaign to pass propositions
57 and 58 by attracting the endorsement
of the California Democratic Party. But in doing so he has given
Democrats a "yes on all propositions" rallying cry
that could cause the governor trouble if the lesser-known proposition
56 also passes on March 2.
Proposition 56 has been deftly packaged by its supporters as
a way to ensure that lawmakers pass the state budget on time.
If legislators miss the June 15 constitutional deadline, they
would forfeit pay and be forced to stay in session until a budget
is enacted. This is the main message spun by supporters. But
it is far from the main purpose of the proposition.
The real objective behind Proposition 56 is to get rid of the
two-thirds vote requirement to pass a budget, making it easier
for legislators to raise taxes. A not unintended consequence
is that by giving legislators this new majority power to raise
taxes, the measure effectively inoculates them against the stiff
penalties described above.
With the legislature safely in Democratic hands, lawmakers will
have no problem passing a budget every year. Penalties will be
imposed in the rare case a Democratic lawmaker refuses to tow
the party line. Instead of being applauded for voting his conscience,
he will be punished and have to incur the wrath of party leaders
who would rather be on their summer vacations.
Supporters are right that if Proposition 56 passes, Californians
will get a budget on time. What they can't guarantee is that
the budget will be responsible.
Last January, Governor Davis proposed a budget with $8.3 billion
in new taxes. Democrats would have gladly passed this budget
by June 15. But these tax hikes would have destroyed more than
590,000 California jobs over three years.
There are currently more than 80 bills before the legislature
that would raise taxes and fees $65 billion annually. Without
the two-thirds vote requirement, Governor Schwarzenegger will
likely be handed a budget in June radically different from the
one he proposed in January.
It is surprising that the governor has not spent more time urging
voters to oppose the measure. He should, because supporters have
thus far been able to frame the debate to their advantage.
According to the Public Policy Institute of California's (PPIC)
January survey, 41 percent of likely voters support proposition
56, clearly within striking distance. Yet, when asked what they
think of the two-thirds requirement for passing a budget, an
overwhelming 73 percent say it's a good thing. This dichotomy
in responses indicates how effective proponents have been in
masking the true intent of Proposition 56.
By focusing on the consequences that lawmakers will have to
face if they fail to pass a budget on time, supporters are playing
to voters' frustration with the legislature, which continues
to garner record disapproval ratings. But the remedy they propose
does not address the heart of the issue.
In the January PPIC poll, just 27 percent of Californians said
they trust the state government to do what is right all or most
of the time. Fifty-six percent believe that the state government
wastes a lot of the money we pay in taxes. Californians are frustrated
with the quality of the work coming out of Sacramento, not the
speed with which it is enacted.
Television ads in
favor of the proposition claim, "proposition
56 would end partisan gridlock." Replacing gridlock with
a tax-and-spend autobahn is hardly a solution. Significant tax
raises would only further stifle economic growth, just as they
did following Governor Wilson's 1991 tax increases.
If Proposition 56 passes, Governor Schwarzenegger will no longer
be able to lead the debate in Sacramento, as he has done to his
credit thus far. He will immediately be put on the defensive,
forced to wield the veto pen to defeat a raft of fiscally irresponsible
In the short term, Californians would not suffer the consequences,
since the governor's veto requires a two-thirds vote to overturn.
What could turn the tables in the future would be a governor
more than willing to sign the legislature's blank check.
2004 Pacific Research Institute