It's understandable that Californians breathed a sigh of relief on February 19th, when the state legislature ended months of political gridlock and agreed upon a $144.5 million budget. Given America's hard times, it's likely that many Golden State residents turned their attention to pressing financial concerns such as holding onto their job or paying their mortgage. Nonetheless, Californians' behavior is problematic because the issues that precipitated the fiscal battle have not been resolved and another serious problem has emerged: the possibility of an immutable spending cap.
The February 19th budget agreement had two components. The first closed the state's $41 billion deficit through a combination of tax increases, painful service cuts, and $5.4 billion in new borrowing. However, to reach accord with a handful of Republican legislators to get the two-thirds majority required to pass the budget, Democrats were forced to agree to a second component, a May 19th special election where voters will decide on six budget-related propositions. Central to these is Proposition 1A that mandates a permanent spending cap.
Proponents have labeled the labyrinthian Proposition 1A the "Rainy Day Budget Stabilization Fund" measure but a more accurate title would be "Proposal to Freeze California State Services at Current Levels." Proposition 1A prohibits legislators from taking full advantage of additional revenues when California comes out of the recession and, instead, subjects service increases to an impenetrable equation including growth in the Consumer Price Index and state population.
There are two problems with the notion of restricting service expenditures to a convoluted formula chiseled into the state constitution. The first is that it permanently locks spending to a baseline that is already too low to guarantee provision of adequate service. The second problem is that Proposition 1A shifts responsibility for future budget decisions away from the legislature and onto invisible state employees primarily accountants who would have to decipher the proposition's abstruse language and perform the
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