Prop-a-Day: Propositions 25 and 26
The sixth in a series of articles on California's upcoming November ballot initiatives. California allows citizens to legislate by way of an initiative system that bypasses the General Assembly to pass laws. As we have seen in the past, the initiative system allows a simple majority of voters to do really dumb things, like take rights away from people just because they feel like it. California Supreme Court Chief Justice Ronald George has said that it is this initiative system that makes California's government "dysfunctional." Hopefully these articles will give Californians more information than can be found in apocalyptic television ads.
As I mentioned in my earlier discussion about Proposition 22, California's budget system is messed-up-wacky. The 1966 overhaul of the state constitution inserted a requirement that two-thirds of the legislators must agree on a budget in order for the budget to pass. Combine that with a redistricting system that has, for the last thirty years, been designed to keep everyone exactly where they are, and you have the makings of a legislative deadlock. All it takes is one-third plus one, and the budget process comes to a halt. This has led to late budgets in 25 out of the last 30 years and compromises that were made not because they were good, but because they were expedient.
Proposition 25
California's budget problems won't be resolved until 1978's Prop. 13 is repealed. But Proposition 25 is halfway there. It replaces the two-thirds requirement for approving a budget with a simple majority. It further adds a penalty to the legislature for not having a budget on time: until the budget is passed, legislators won't get paid, and they won't have any of their expenses paid for. This is a pretty good inducement to get a budget passed, don't you think? It has been suggested to me that this is unfair to poorer legislators and places power in the hands of wealthier legislators, which may be true theoretically, and may have been actually true if we kept the two-thirds requirement. But a simple majority is easy to find in the General Assembly, and if they can't come up with that for a budget, then they've got bigger problems than not getting paid.
Here's Some Fun Scare Tactics
I was perusing the "No on 25" website and found some fun scare-ya statements designed to perpetuate fear about Prop. 25. Here's my favorite:
Eliminates the Constitutional right of voters to use the referendum to force a vote to repeal bad legislation or taxes disguised as fees.
This is an outrageous lie. It's "outrageous" because any literate person can read the text of Prop. 25 and discover that it absolutely does not do anything remotely close to that. Prop. 25 is, of course, supported by Chevron and the California Chamber of Commerce. Vote yes on Prop. 25.
Proposition 26
This is a companion proposition in the sense that it also deals with taxes. According to Prop. 26's supporters -- who are exactly the same groups that are against Prop. 25 -- politicians in Sacramento are getting around Howard Jarvis' Prop. 13 by disguising higher taxes as "fees." The problem is that the definition of a "fee" is different from that of a "tax." A fee is a charge levied upon a particular group of people and used to pay for public programs either in support of those people or to fix problems those people have created. A vehicle registration fee is a charge levied only on people who register a car in California; the fee goes to pay for the maintenance of the roads on which those vehicles drive. So it's vehicle owners paying for the maintenance of their roads.
Prop. 26 is incredibly sneaky: it mandates that any "fees" passed by the legislature be subject to the same two-thirds majority requirement that all other taxes are. While Prop. 26's supporters maintain that "taxpayers" are being tricked into paying higher taxes, not all taxpayers are within Prop. 26's scope. The legislative analyst notes:
The change in the definition of taxes would not affect most user fees, property development charges, and property assessments. This is because these fees and charges generally comply with Proposition 26's requirements already, or are exempt from its provisions.
So who would be affected by Prop. 26?
Generally, the types of fees and charges that would become taxes under the measure are ones that government imposes to address health, environmental, or other societal or economic concerns.
Ah, it's all so clear! Prop. 26's supporters, who are gigantic corporations, are tired of paying regulatory fees. They don't want to have to pay to have the state clean up their messes or mitigate the environmental problems created by their business. Their analysis includes the old bromide that, if the legislature increases business' regulatory fees, those businesses will just pass the cost on to consumers. While this might be true, the businesses ignore the agency of that decision: the state does not mandate such a transfer; businesses choose to make such a transfer. The other argument is that the taxes take care of what economists call externalities: side effects of doing business that are not factored into the price of a product; e.g., pollution, which is hard to quantify. Ostensibly, the cost of, say, gasoline should take into account the environmental damage caused by drilling for oil, refining oil, and burning gasoline. A tax on gasoline merely corrects that error so that the price of gas reflects not only the cost of the gas itself, but also the cost to the environment.
The legislative analyst isn't fooled: Prop. 26 would just permit businesses to engage in unsafe or detrimental business practices without paying higher regulatory fees. Mom and Pop's hardware store would be unaffected. Chevron would be. Vote no on Prop. 26.
