Friday, August 07, 2009
Constitutional Convention for California?
Why is the State ungovernable? One important reason is the requirement for a 2/3 vote in each house of the legislature to pass a budget or to amend the tax code. We don't need a constitutional convention to change the 2/3 requirement to a simple majority. A simple majority is the rule in most of the other States. We can change it by initiative. Don't expect the legislature itself to draft a proposition to do away with the 2/3 vote. A constitutional amendment also requires a 2/3 vote in the legislature. The minority party very much wants to keep the 2/3 requirement in place.
There is the question of whether the voters would approve a change from 2/3 to majority voting in the legislature. I think a majority favors such a change. However, the minority in favor of keeping the 2/3 vote is very passionate and is willing to spend a lot of money to scare the public into keeping the requirement. You can expect to see ads with arguments like these:
- If you let a simple majority in the legislature raise taxes, they will. You'll pay more taxes if this change is made.
- This requirement forces legislators to think in terms of how to reduce the cost of government to fit within the available tax revenue, rather than think of how to spend more of your money.
- This requirement also prevents the majority from shutting out the minority in planning the budget. The Republicans are the minority party now, but the Democrats could be the minority party a few years from now.
These are plausible arguments. Those of us who favor a simple majority vote in the legislature for budgets and taxes will have to prepare good arguments against them. In any event, we should study how other States enact budgets and taxes and see whether in practice any of the warnings of the "status quo" faction have any merit in actual experience.
Another necessary but more difficult change is to modify the property tax rules of Proposition 13. Many home owners are naturally nervous at the possibility of a big increase in the property tax on their homes. In my case, Proposition 13 limits the tax on my home to about $1700 a year. If it were taxed at the rate of 2 percent of its market value, the tax would increase to at least $10,000 a year. This extra revenue would be a boon to the City of Los Angeles, struggling now with a structural deficit of over a billion dollars a year. I have enough income to pay the extra tax, so I have no fear of being dispossessed by the marshal. There are many retired persons in less fortunate financial situations than mine who would have to go in debt, probably by taking out reverse mortgages on their homes, to pay the tax. They would stay in their homes and survive, but their heirs would not inherit the houses. The banks would repossess them and sell them to collect the amounts owed on the mortgages.
I don't think a simple repeal of Proposition 13 is politically possible. It may be possible to amend the proposition such that commercial property - property that produces income for the owner - is taxed at a higher rate than residential property. This change would not, or should not, alarm the retired homeowner with a modest retirement income. There would be powerful resistance to such a change, mostly from landlords. The Howard Jarvis Taxpayers Association would go full bore in putting out ads and sound bites to scare the retirees. The purpose of the change would be misrepresented. Persons who live in rented houses and apartments would be told how much their rents would have to be increased to cover the change in the tax rate. Perhaps rental property would have to be left out of the proposed change, so that only property supporting a manufacturing or service business (e.g., Macy's, Boeing Aircraft) would pay the increased tax.
Another problem that promotes the ungovernability of California is the extreme partisan divide in the legislature. Members have to face voters at a primary election before they can campaign in the general election. Primary election voters tend to be ideological purists. They want their candidates to be as pure as they are. Mr. Schwarzenegger thinks this partisan divide can be diminished by changing the way legislative boundaries are drawn, so that districts contain a more even mix of Republicans and Democrats. In that way, the winner of the primary in a "safe" district would not be guaranteed election in the general election. The voters approved this change and it will go into effect after the 2010 Census, when State Assembly and Senate Districts are redrawn. My own view is that it won't have much effect on the extreme partisanship.
I have an idea for an election system that would reduce the effect of the extreme partisan ship. I will have to think about it for a while and present it in another post.