Props move money to general fund from voter-approved taxes
The only items on a statewide special election May 19 are half a
dozen propositions that address a budget crisis that was expected
to reach a $40 billion shortfall in 2009-10.
State legislators and Gov. Arnold Schwarzenegger approved a
budget in February to address the shortfall by bringing in $98
billion in estimated revenues
– enough to cover the projected $92 billion in expenses for the
fiscal year and a $6 billion debt left over from 2008-09 through a
mix of cost reductions, tax increases and funding from the federal
economic stimulus package.
Props move money to general fund from voter-approved taxes
The only items on a statewide special election May 19 are half a dozen propositions that address a budget crisis that was expected to reach a $40 billion shortfall in 2009-10.
State legislators and Gov. Arnold Schwarzenegger approved a budget in February to address the shortfall by bringing in $98 billion in estimated revenues – enough to cover the projected $92 billion in expenses for the fiscal year and a $6 billion debt left over from 2008-09 through a mix of cost reductions, tax increases and funding from the federal economic stimulus package.
The other piece to making the numbers add up are the six propositions before voters. Local agencies are likely to be directly affected by at least two of the propositions if approved.
Political action committees in favor of propositions 1A, 1B and 1C have collected more than $6 million to raise support of the propositions. PACs opposed to the measures had not reported any campaign contributions since the last reporting date on April 4. Campaigns for No on 1D and 1E had collected $176,000.
Below is a summary of each proposition and possible impacts if approved.
Proposition 1A
Summary: If passed, this proposition would increase the state’s “rainy day” fund from 5 percent to 12.5 percent of the general fund. A portion of the money saved would be put aside for future economic downturns, and the rest of the money would be available for education, infrastructure, debt repayment or for use in a declared emergency.
Impact: If passed, the tax increases approved by legislators in February, such as a 1 percent sales tax increase and a ½ percent vehicle free increase, will be extended through 2013.
Proponents:
www.cabudgetreformnow.com
Teresa Casazza, President
California Taxpayers’ Association
Ed Bonner, President
California State Sherriffs’ Association
Glen W. Thomas
California Secretary of Education
Opponents:
www.VoteNoOn1A.com
Lillian Taiz, President
California Faculty Association
Richard Holober, executive director
Consumer Federation of California
Hank Lacayo, state president
Congress of California seniors
Proposition 1B
Summary: If passed, this proposition requires supplemental payments to local school districts and community colleges to address recent budget cuts from the state’s Budget Stabilization Fund, which would be created if Prop. 1A is approved by voters. The funds are allocated based on average daily attendance and can be used for classroom instruction, textbooks or other educational programs.
Impact: The state could save several billion dollars in 2009-10 and 2010-11, but it could cost the state billions of dollars annually after that.
Proponents:
www.YES1B.com
David A. Sanchez, president
California Teachers Association
Opponents:
None submitted
Proposition 1C
Summary: If passed, the state would be able to borrow against future revenues from the state lottery to balance the current budget. It would also make changes to marketing of the state lottery and increase payouts in an effort to increase ticket sales. Lottery profits would no longer be paid straight to educational institutions, but would go to the general fund where they would then be paid to schools.
Impact: The state would receive $5 billion for the 2009-10 state budget and additional borrowing against lottery funds would be allowed in the future. Higher payments to education in the future through the general fund could lead to future budget issues.
Proponents:
www.cabudgetreformnow.com
Bill Hauck, vice chairman
California Business for Education Excellence
Opponents:
Bob Huff, state senator
Proposition 1D
Summary: If passed, funds from Proposition 10, known as the California Children and Families Act and approved by voters in 1998, would be diverted from First 5 programs to the general fund for existing state health and human services programs for children up to age 5. Up to 80 percent of the funding collected from a 50 cent a pack cigarette tax goes to California counties to provide child development programs and health coverage to low-income children under age 5. The other 20 percent of the revenue goes to a state First 5 commission that provides health access and school readiness to children, and offers a kit for new parents that provides information on parenting skills.
Impact: The measure would reduce First 5 state commission funding by $340 million in 2009-10, and up to $268 million annually through 2014. Local First 5 staff estimate that San Benito County will lose 50 percent of its regular First 5 funding.
Proponents:
Robert J. Baldo, executive director
Association of Regional Center Agencies
Javier V. Guzman, principal consultant
The California Latino Child Development Association
Opponents:
www.NoOnProposition1D.com
Pamela Simms-Mackey, associate director of Medical Education
Children’s Hospital and Research Center, Oakland
Leticia Alejandrez, executive director
California Family Resource Association
Pamela Pimentel, R.N.
Maternal-Child Health Specialist
Proposition 1E
Summary: If passed, the measure would transfer revenue from the Mental Health Services Act to the general fund for two years to cover the state’s share of the Early and Periodic Screening, Diagnosis and Treatment program, which provides mental health services for Medi-cal beneficiaries to the age 21. MHSA was approved by voters in 2004 as Prop. 63, and funding for it comes from a 1 percent income tax on people who have a taxable income of more than $1 million.
Impact: The state would transfer $230 million a year to the general fund for the next two years, reducing the funding available for community mental health programs. Projected revenues from MHSA funds range from $900 million to $1.5 billion. San Benito County’s Mental Health programs funding through MHSA would be affected.
Proponents:
Darrell Steinberg, senate president pro tempore and a co-author of Proposition 63
Opponents:
www.NoProp1E.com
Lou Correa, state senator
Proposition 1F
Summary: If passed, elected officials would not be able to receive pay raises in years when the state is running a deficit, including members of the Legislature, the governor and other statewide constitutional officers. It also prevents increases when the state Special Fund for Economic Uncertainties is less than the general fund by 1 percent or more.
Impact: The savings to the state in any given year is minor, estimated at less than $500,000 a year.
Proponents:
www.reformforchange.com
Abel Maldonado, state senator
Lewis K. Uhler, president
National Tax Limitation Committee
Joel Fox, president
Small Business Action Committee
Opponents:
www.PeteRates.com
Pete Stahl, author
Pete Rates the Propositions
