Can 1A Stop the Bleeding?



Retired teacher turned farmer Roger Smith says he's torn. He's a true blue Democrat who feels like he's supposed to support Props 1A and 1B, and he knows the state budget situation is critical. He's hesitant to "throw his lot in with the Howard Jarvis Taxpayers League." Nevertheless, he's decided to vote no on 1A.

"You don't put a band-aid on a hemorrhaging wound," said Smith. "You sew it up."

There's no one arguing that California isn't in bad shape. The general economic downturn has the state budget bleeding like the victim in a slasher flick. But major disagreements arise when you suggest a remedy for the multi-billion dollar deficit.

The propositions up for a vote on May 19 are a result of a last ditch effort to end a protracted standoff in the legislature. After months of budget wrangling, with the Republican minority standing firm, Governor Schwarzenegger hammered out a compromise with the Democratic and Republican leadership that neither side seems to like all that much.

Both parties held state conventions recently. The anti-tax Repubs came out against all six props. While more than half the Dems were ready to endorse 1A, convention rules required a 60 percent majority, and supporters couldn't get it, so there was no endorsement.

Props 1A and its school funding companion, 1B, are the linchpins of the governor's plan to mend the budget. They're complex measures, hard to fathom, even harder to sum up in layman's terms. What exactly does 1A do? It depends on who you ask -- and when you do, prepare for semantic traps.

One key element is a complicated "Budget Stabilization Fund," a reserve procedure described by the crafters as a "rainy day fund" -- progressives in opposition call it a "spending cap." The nonpartisan Calif. Budget Project boils it down: "[It] requires the state to deposit an amount equal to 3 percent of estimated General Fund revenues in the BSF annually until the balance in the BSF equals 12.5 percent of General Fund revenues as estimated in the Budget Bill for each fiscal year." Got that? And, the CPB notes, "Governors would gain the unilateral authority to make mid-year reductions in state spending."

Will it work? The Governator thinks so, and so do some Dems, including 1st District Assemblyman Wesley Chesbro, who describes 1A as "good policy," adding, "I know there are labor unions, some public employee unions and some members of the legislature who think it's not. It's not perfect. There are things [in the propositions] I'd do differently if I'd written them. They constitute a compromise, but I don't think the Democrats gave up hard felt principles in order to agree to them.

"On of the biggest dangers in a crisis, we tend to think short term and we don't make long term decisions for the future. 1A and 1B are an opportunity to rise above the current crisis and make some longer term decisions that will help solve the budget problem in both the medium and long term."

Arcata City Councilman Shane Brinton attended the recent state Democratic convention as a district delegate, and as part of the progressive opposition to 1A, which he sees as "the most dangerous and frustrating of the initiatives." (He opposes all but 1B).

"1A is so convoluted that I don't know who understands it," said Brinton. "A 'rainy day fund' is what they're calling it, but it's a spending cap, mixed with some mostly regressive tax increases. The spending cap is the dangerous part. It's just not good public policy. Nobody disputes the fact that it's good to save in good times, but legislating it in this manner could cripple important programs for families, for children and the mentally ill."

Asked about the props, Ron Kuhnel, a Democrat who retired to Eureka after a career working in state government in Sacramento put it bluntly: "They're toast." He'll vote against all of them. "I worked in government back when they passed Prop. 98, which was designed to basically fix the amount of money that went to education. I worked in the [Calif.] Dept. of Finance. It completely tied the hands in the budgeting process. In good years it worked fine; in bad years it resulted in draconian cuts to social programs and other things. Those kinds of ideas just don't work. [With 1A] they're locking in a set of limits that, at some point in time, is not going to work. I'm opposed to that kind of spending restriction, so I'm voting no."

The compromise struck includes some elements attractive to Republicans. Joe Bonino, who works in the accounting department at Humboldt State University and sits on the Republican Party of Humboldt County central committee, says he likes the "mechanisms" restricting spending. For him, and for most Republicans, the taxes were the deal breaker.

The tax portion of 1A is an extension of a trio of taxes: A penny on the dollar increase in sales tax, higher vehicle license fees and an increase in income taxes.

"Feeding the beast isn't going to make it go away," said Bonino. "More taxes are never a good idea. Basically decisions have to be made on where government can be reduced in size. But our state legislature seems unwilling to make those choices. They need to literally shrink the government and they are unwilling to do it. It's that simple."

While Brinton says he is not opposed to taxes in general, he doesn't care for the specific taxes proposed. He deems them "regressive."

"In exchange for a spending cap we get an income tax increase that doesn't only affect the rich, but also the middle class, and we're going to get a sales tax increase, which is one of the most regressive kinds of tax. And that's the part of the package they're selling to us as positive. Basically this is Republican lite. And the Republicans are in this wonderful situation where they get to oppose it and still watch the Democrats carry out their policies."

For Chesbro drastic times require drastic measures. "Frankly, I think under the extreme circumstances we're in, a balance between taxes and cuts is the responsible way to go. And that's what we did. It's all terrible. I mean, taxes in a recession are bad. Cutting schools and health care when the economy is down and people are hurting is also bad. There are no good decisions. I think trying to spread the pain around, not having it be all taxes or all cuts is more responsible than doing it all with one part or the other."

Chesbro knows it's a hard sell. "There are a lot of things that tilt the political odds against the passage of these measures: One is that they're so complicated. Another is that I think people are sick and tired of being asked to help us solve problems in Sacramento. They wish we could some how do it without going to the ballot."

David Stacey, an English professor at HSU, is one of many we spoke with who admitted knowing almost nothing about how the propositions work. "I'm going to vote no on 1A, because that's what my union tells me to do; that's about all I know," said Stacey with a shrug.

The professor belongs to the California Faculty Association, one of many unions vehemently opposed to 1A, a measure that pits one set of teachers against another. The powerful California Teachers Association is among 1A's strongest supporters because of 1B, the "Education Funding Payment Constitutional Amendment," which doesn't take effect without passage of 1A.

In short, said Chesbro, 1B is about "repaying schools moneys that were cut this year and last year. 1B will clearly help rebuild our school system from the damage being done during the current crisis." Specifically, 1B gives back $9.3 billion cut from K-12 and community college budgets.

The universities are left out, which makes it easy to see why the CFA is opposed, but the California Federation of Teachers also opposes 1A. Same with the Service Employees International Union. They don't like of the proposed spending cap, which they see as bad for education in the long run, and they think they can still get the $9.3 billion, money essentially owed because of Prop 98, by using the court system. They see no reason to compromise.

And that's what 1A and 1B are all about, compromise.

"I think that reflects the fact that the leaders came to the middle and put aside their partisan differences, which is frankly what I think most Californians expect us to do in a crisis," said Chesbro.

"But when it comes to the parties, the Democratic Party tends to be to the left of the California electorate and the Republican Party tends to be far to the right. The opposition by the Republicans and the neutrality by the Democrats reflects the fact that these are compromises that didn't cater to the ends of the political spectrum."

Since Californians tend to be an uncompromising lot, the bloody budget mess may land back in the lap of the legislature.

Even Chesbro, a strong supporter of the props, admits, he's "not thrilled about any of this. There are no good solutions in a crisis of this severity. I think these are the best available opportunities amongst some really bad choices available to us."

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