WEST Hollywood, California - For the second time in four years, California voters have "sent a message" to Sacramento, rejecting budget reforms in the face of spiraling deficits. Yesterday, California voters killed all but one of a package of budget ballot measures designed to partially paper over the state's growing deficits, just as they killed Governor Schwarzenegger's attempt to "blow up the boxes" of state government back in 2005.
Now, it seems the only way to fix the state's problems may be through a Constitutional Convention. And depending on the actions of the State Supreme Court in the next few weeks, Schwarzeneger and the business community may pick up an unlikely ally: The usually liberal gay and lesbian community.
Over the years, a series of constitutional amendments, and a the boom-and-bust cycle of the economy has made California practically ungovernable.
In 1978, voters passed Proposition 13, which limited the amount of annual increases in property tax assessments, thereby limiting the growth in property tax revenues received by state and local governments. Later that year, they also passed Proposition 8, which allowed for property owners to lower their maximum assessed values during real estate busts, like the cycle California is currently in.
But the pendulum swung back the other way a decade later, when voters, concerned that school funding was limited by these measures, passed Proposition 98. Prop 98 sets a minimum spending level for K-14 education. In 1988-89, it was 39 percent of state revenues. But Prop 98 also said that the dollar amount of funding shall never decrease AND that half of any new tax revenues be added to the Prop 98 minimums, in addition to adjustments made for enrollment growth.
Since 1998, California has seen boom and bust and boom over again. When the Internet bubble grew, state revenues expanded exponentially under Governor Gray Davis. When the bubble burst, so did capital gains revenues paid in the state - but Prop 98 mandates remained. The budget went so far out of balance that voters recalled Governor Davis.
Davis' replacement, Arnold Schwarzenegger tried to initiate spending caps and budget reforms at the bottom of the budget crisis upon taking office, only to be rejected. Instead, the state budget "balanced" itself on the housing boom. As we well know, that went bust, and California's budget with it.
That's the fifty-cent version of how we got into the mess; but how does California get out of it?
Some budget "reformers" say that all California needs to do is lower the super-majority needed to pass a state budget and raise taxes to fifty percent from the two-thirds vote required today. The move is popular among California Democrats because the Republican Party, with 31 percent registration, is nearly regulated to permanent minority status in California.
Fixing California's governance problems will require much more. Among the reforms needed, both the politically popular Proposition 13 and Proposition 98 need to be reconsidered - in tandem - so that state revenues and spending are not going on auto-pilot in different directions. And the roles of California's four branches of government - the executive, legislative judiciary and electorate - should be reconsidered.
That is why the business-oriented Bay Area Council has called for a Constitutional Convention. They are finding allies across the political spectrum from Governor Schwarzenegger to the liberal editorial pages of the Los Angeles Times.
And these reformers may have another unlikely ally, depending on the outcome of litigation over last year's Proposition 8, the constitutional amendment to eliminate the right to marry for same-sex couples. Geoff Kors, executive director of Equality California, wants a Constitutional Convention to also consider reinforcing protections for minorities and removing the discrimination added by voters last November: "If there is a constitutional convention, prohibiting discrimination against minorities, including marriage for same-sex couples, must be included in a broad package of reforms," Kors has said.
A Constitutional Convention would be messy. The selection of delegates will have candidates running from all sorts of positions -limiting taxes, protecting special interest spending, restoring marriage rights, or taking away constitutional protections from minorities. There is no guarantee that the result of a Constitutional Convention would be any better than what we have today. But as former Los Angeles King Wayne Gretzky says, "you miss a hundred percent of the shots never take," and California cannot afford to miss a chance on goal.
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