Two-Thirds is Too Much
A rundown of efforts, including ballot propositions, aimed at reforming California’s revenue process.
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For the past several years, California has had to face repeated budget crises that are the result of structural flaws in our budget and revenue system. Until November 2010, California was the only state in the union to have two-thirds vote requirements to pass a budget and to increase revenue. This has allowed a minority of our representatives to hold the budget hostage each year.
The passage of Proposition 25 in 2010 eliminated the two-thirds requirement for passing a state budget, but the majority still cannot raise needed revenue. In fact, the passage of Proposition 26 makes it even harder to raise revenue from fees. Our budget problems will continue to worsen without meaningful reform that fully funds the programs and services we all need.
For a general overview of the factors fueling California's budget crisis, check out CPEHN's new policy brief, "Investing in a Future for All Californians: A Primer on California Budget and Tax Policy." The brief also poses key questions to help you analyze new tax and budget proposals.
Results of the 2010 vote on propositions that impact the state budget:
|
Proposition |
Impact |
CPEHN Position |
Outcome |
|
21 |
New Vehicle License Fee to Fund State Parks: would have raised the Vehicle License Fee (VLF) by $18 annually to operate, maintain, and repair the state park system.
|
No Position* |
Failed |
|
22
|
Limits on State Use of Local Funds: prohibits the state from borrowing funds used for transportation or local government projects and services.
|
No Position |
Passed |
|
23 |
Dirty Energy: would have reversed
|
Oppose |
Failed |
|
24 |
Make Corporations Pay Their Fair Share: would have reversed tax giveaways agreed to by
|
Support |
Failed |
|
25 |
Majority Vote for an On-Time Budget: changed the legislative vote requirement necessary to pass the state budget from two-thirds to a simple majority.
|
Support |
Passed |
|
26 |
Reduction of Revenues for our State Budget: makes it harder to fund government programs by increasing the legislative vote requirement for increasing fees, including those on corporations that generate pollution, from a majority to two-thirds.
|
Oppose |
Passed |
*On Prop 21: CPEHN is a strong supporter of our parks to promote physical activity and social cohesion, and we want to ensure that they are appropriately funded. However, we are concerned about continuing to develop restricted funding streams for specific programs as a solution to our state budget problem, rather than addressing our broken revenue system. We would also like to see the state develop an equity plan to ensure that low-income communities have equal access to parks.
The following are some additional efforts CPEHN is engaged in and tracking:
Split Roll, “Close the Loophole” (www.closetheloophole.com)
San Francisco Assessor Phil Ting is pushing the idea to eliminate Proposition 13 limits on property tax increases for businesses only. Legislation to push the issue has been pursued by Assemblymember Ammiano.
CA Majority Rule - Restore Democracy to California (www.camajorityrule.com)
A broad coalition advocating for all legislative actions on revenue and budget to be determined by a majority vote.
Commission on the 21st Century Economy (www.cotce.ca.gov)
Established by Governor Schwarzenegger, the Commission was charged with recommending changes to state revenue policy. The proposed recommendations would shift the burden of revenues from the wealthy to the middle- and low-income. The proposals include reducing the income tax and making it a flat tax, reducing sales taxes, eliminating the corporate tax, and creating a new type of value-added business tax.
This foundation-funded civic group has been advancing proposals similar to those passed by voters in 2010, such as those found in Propositions 22, 25, and 26.
Additional Resources
California Budget Project: A nonpartisan, nonprofit organization seeking fiscal reforms to benefit low and moderate income Californians.
California's Budget Crisis: A report prepared for the Blue Shield of California Foundation provides a historical overview, recent reform efforts, and the affect of the recession on California's budget.