Al's Opinions

A Los Angeles talk show host (Larry Mantel of KPCC) is promoting the idea of a constitutional convention for California to solve the problems that make the State ungovernable and lead to yearly deadlocks on the budget. I oppose the idea. I don't think it's possible to solve the problems in California with a single convention to draft a new constitution for the State.

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.

Labels: 2/3 vote requirement for budget, California budget, Governor Schwarzenegger, Proposition 13, ungovernable California

The following letter was printed on the editorial page of the Los Angeles Times for Saturday, April 25, 2009:

The voters have recently "combined to straitjacket the state's budgetary process"? How ludicrous!

Both Proposition 10 and Proposition 63 mandated not only spending but taxes to pay for them -- and them only. These two initiatives took nothing from the general fund. That is hardly spending like a drunken sailor, nor is it irresponsible.

If legislators on both sides of the aisle were as responsible as the electorate, we'd probably be in far better fiscal shape than we are.

The electorate did nothing to straitjacket the Legislature. Lawmakers are just jealous and envious of funds they cannot access. We'd be fools to let them strip the funds out of these programs to fund other programs.

My first reaction to this letter was that the writer was either misinformed or uninformed. The voters placed a straitjacket around the Legislature years ago when they imposed a 2/3 vote requirement for passage of the budget and for increasing taxes. It is this requirement, the hard economic times we now experience, and the stubbornness of a certain faction among the Legislators that has forced the Legislature to agree on a funding plan with the various take-aways that the writer decries. Agreement requires 2/3, not a majority. Other more reasonable budget and funding plans were not acceptable to the stubborn ideological minority, a group that contains more than 1/3 of the legislators in each chamber.

My next reaction was that the writer was concerned only about the diversion of funds from the programs established by Propositions 10 and 63. The writer lives in an affluent region. He has the education, the spare time, and the means to write a letter to the editor. He does not depend on any of the state programs for the poor, the disabled, the homeless, etc. He no longer depends on state support for education or he would be less critical of some of the decisions of the Legislature.

Rather than simply condemn the members of the Legislature as jealous and envious, I'd rather that the writer take up the cause of getting rid of the 2/3 vote requirement to allow the Legislature to adopt a reasonable, non-ideological budget that does not take funds away from mandated, self-funding programs.

Labels: 2/3 vote requirement for budget, California budget, diversion of funds, Proposition 10, Proposition 63

# posted by Albert Saur @ 3:53 PM 0 comments

The minority in the State Legislature have won. They have forced the majority to give up, for the present year, any attempts to fix the structural deficit in the State's funding. Tax rates will remain the same, although some taxes will be collected sooner than in past years. Money will be borrowed from future money taken in by the lottery. Etc., etc., etc.

Democrats hope that next year the current recession will have recovered and more revenue will come in. Republicans are satisfied that they have taken a step toward achieving their goal of small government - government that isn't concerned with health care and education of the people of California. In their view of what ought to be, government shouldn't be involved in such things.

Budgeting in California has become expensive and inefficient. In order to get the minority to budge, the majority has to offer expensive concessions. In nearly all other States, a majority vote is sufficient to pass a budget and the process goes more smoothly, efficiently, and less expensively. The situation in California was brought on many years ago during the "Tax Revolt." The State constitution was amended to require 2/3 votes in the legislature for budgets and taxes. In addition, cities and counties could raise taxes only by obtaining approval of 2/3 of the voters at an election.

Opposition to tax increases is not new. There has always been a segment of the voting population which would vote against any tax increase whatever. My father used to refer to this segment as the "skin-flint vote," on the ground that people who voted that way didn't want to give up any of the services of government but simply didn't want to pay for them. The tax opponents or "skin-flints" took advantage of a crisis several years ago when the rapid increase in real estate was bringing about large annual increases in the property tax that residents had to pay on their homes. There was real fear of mass dispossession of home owners and tax sales on their homes. Leaders of the tax crusade or skin-flints took advantage of this fear to persuade the public to vote for their plan for super-majorities (i.e., 2/3 votes) for enacting budgets and taxes.

One attitude that I often adopt is that the People of California are getting what they deserve. They enacted this 2/3 voting requirement and are now experiencing the consequences of it. Another attitude is that this is a situation that must be changed. The people voted to require 2/3 votes for taxes and budgets. The people can vote to rescind the requirement and allow the Legislature to adopt budgets and taxes by a simple majority vote. This change will have to be done by initiative. A 2/3 vote is also required for the Legislature to place a referendum on the ballot to amend the constitution.

Labels: 2/3 vote requirement for budget, California's budget, obstructionist minority, Tax revolt