California Voting: Proposition 22
The Governor's Race
The Lt. Governor's Race
The Attorney General's race
The Senate Race
Proposition 19: Yes
Proposition 20: Yes
Proposition 21: Yes
Proposition 22
Prohibits the state from borrowing or taking funds used for transportation, redevelopment, or local government projects and services. initiative constitutional amendment.
Summary: Prohibits State, even during severe fiscal hardship, from delaying distribution of tax revenues for these purposes. Fiscal Impact: Decreased state General Fund spending and/or increased state revenues, probably in the range of $1 billion to several billions of dollars annually. Comparable increases in funding for state and local transportation programs and local redevelopment.
It's the next round of the never-ending wars between State Legislators parched for money and voters who have set aside monies for specific purposes. Legislators keep coming up with new and more creative ways to get around these set-asides, and then balloteers come back with yet-more-stringent language designed to keep the Legislators' paws off of it.
Sigh.
And worse yet, both sets of arguments, pro, and con, seem convincing.
Pro: California voters have overwhelmingly passed separate measures to prevent the State from raiding local government and transportation funds. Even so, each and every year the State attempts to take or borrow local government, transportation and transit funding using loopholes, or illegal funding diversions that have only been stopped after expensive and lengthy court battles. In the 2009/10 fiscal year alone, the Legislature:
-- Borrowed approximately $2 billion in property taxes from local governments, despite no clear path to repay these funds; took $2.05 billion in local redevelopment funds; and shifted nearly $1 billion in transit funding away from local transit agencies. The courts have since ruled the transit shift unconstitutional.
Con: When the state borrowed local government funds during the current crisis, they also authorized a "securitization" program. This program allows local governments to get a loan to cover their all their costs, with the state paying not only the principal but also the interest for the loan. The sponsors of Proposition 22, the League of California Cities, has on it’s own website a "white paper" that describes how the program works and says, "All transaction costs of issuance and interest will be paid by the State of California. Participating local agencies will have no obligation on the bonds and no credit exposure to the State."
In fact, Proposition 22 will hurt local emergency services like firefighters and paramedics. That’s why the California Professional Firefighters oppose Proposition 22.
And Proposition 22 will forever eliminate emergency funding for our schools and health care. That’s why the California Teachers Association and the California Nurses Association both strongly oppose Proposition 22.
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I don't really know who to believe. If local governments can borrow the money and have the state pay all the interest and transaction costs, then where's the beef (other than the fact that the state has to come up with the money to pay back the loans, but that's kind of a separate issue)? (It does looks like this 'securitization' program was a one-shot deal -- there's not guarantee that such a program would be part of another emergency borrowing package.)
But if they really are effectively depriving local governments of monies they need, and doing it using very questionable methods that sometimes get struck down, then maybe there needs to be a stricter rule against doing so.
If the California Legislature weren't so horribly dysfunctional, I would definitely vote no. These decisions are, after all, the kind of decisions that we have a legislature for.
If this new law weren't quite so restrictive, I might vote yes. There should be some flexibility, and Proposition 22 seems to take away almost all of it -- although, as I noted, who knows what new trick the Legislature will come up with?
Right now I am a slightly inclined to vote no, or to flip a coin, or not to vote on this proposition.
Anyone else like to proffer an opinion?