There are three propositions that will be on the California ballot November 2nd that appear to be unrelated. However, when you consider the background and purpose of these bills, the success or failure of these propositions could have a significant impact on California’s manufacturing industry, already struggling to survive through the tough economic times and unfriendly business climate in California.
Proposition 25, titled “On-Time Budget Act of 2010,” would change the legislative vote necessary to pass the budget from two-thirds to a majority vote (50 percent plus one). It states that it would not change Proposition 13’s property tax limitations in any way and would not change the two-thirds vote requirement for the Legislature to raise taxes. Legislators would forfeit their pay if the Legislature fails to pass the budget on time. Proponents argue that for more than 20 years, the California Legislature has been unable to meet its constitutional duty to pass a budget by June 15 because of the requirement of a supermajority of two-thirds that is required to pass a budget.
A coalition of taxpayers and employers called Stop Hidden Taxes, sponsored by the California Chamber of Commerce and California Taxpayers Association are opponents of Proposition 25. They say it includes “hidden” ways to allow legislators to raise taxes as part of a budget bill with a simple majority vote. Teresa Cassazza, president of the California Taxpayers’ Association said, “It should come as no surprise that the special interests behind this measure would try to sneak a measure by voters that makes it easier for the state Legislature to raise taxes on Californians.”
In contrast, Proposition 26, titled “Stop Hidden Taxes,” would increase the Legislative vote requirement to two-thirds for State levies and charges, with limited exceptions, and for certain taxes currently subject to majority vote. It would require voters to approve, either by two-thirds or majority, local levies and charges with limited exceptions. Proponents say that too often “taxes” are relabeled as “fees” by either the state Legislature or local agencies, allowing them to bypass requirements that previous ballot measures have instituted for public oversight of tax increases (either a two-thirds legislative majority vote or voter approval). Proposition 26 would end this loophole by plainly defining what is a tax and what is a fee to ensure that any tax hikes are treated as such under the law.
Proposition 27 would eliminate the 14-member state redistricting commission that voters approved through Proposition 11 in the election of 2008. It would consolidate authority for redistricting back with elected state representatives responsible for drawing congressional districts as was done in the past. California voters haven’t benefited yet from the passage of Proposition 11 because redistricting is only done every ten years, the year after the Federal Census is conducted. This means that the independent Commission will redraw the district lines in 2011using data from this year’s Census, and the newly drawn districts will go in effect for the 2012 election.
Now, how are these three propositions interconnected? The proponents of Proposition 25 and 27 are one in the same. They are the individuals, groups, and organizations that derive their wages or funding from government, whether it is a salary as a teacher, law enforcement officer, or firefighter or an organization such as California Head Start Association, Planning and Conversation League, or the Sierra Club.
The proponents of Proposition 26 are the opponents of Propositions 25 and 27. They are a coalition of employers, small business owners, farmers, and industry organizations, such as the California Chamber of Commerce, California Restaurant Association, and the Howard Jarvis Taxpayers Association. They are the individuals and companies that provide the tax revenues that fund the state government.
In essence, the two opposing sides of these issues are the people that benefit from the expenditure of government funds, and the people and businesses that provide the local and state revenues in the form of taxes and fees.
While it is true that Proposition 25 would eliminate the gridlock over the budget in the state Legislature, the price all Californians would pay would be handing a “blank check” to the ruling party in the state Legislature and its supporters. We would have a state with one party rule without any “checks and balances” provided by the minority party
The reality is that elected representatives in the state legislature have gerrymandered the state to the point that all but a handful of districts are safe for the incumbent party of the district. This means that the most extreme of either party gets elected to the state Legislature, and they don’t have to be accountable to independent and opposition party voters. They only need to please their supporters, who will ensure their re-election or the election of a candidate of the same party when they are “termed out.”
This means that the state Legislature is more like a “jousting arena” in which the extreme of each party is elected to “carry the colors” of their supporters to do “battle” with the representatives of the opposing party. The state Senate, where state budgets are approved, has been in Democratic control continuously since 1970 as has the Assembly, with the exception of a brief period from 1995 to 1996. The only power the Republicans have had is the power to hold up the budget because of the requirement for the two-thirds majority vote.
The solution is to make every district a competitive district so candidates will be forced to move to the center to get elected and then be forced to work together in the state Legislature for the good of all Californians. The best hope for this happening is the drawing of new district lines by the independent commission in 2011.
California has been losing its manufacturing base because of high taxes, undue regulations, workers’ compensation costs, a legal environment stacked against businesses, and lengthy and costly construction permitting requirements. Irvine business relocation specialist Joseph Vranich has tracked 129 companies that have moved out of California, and I have tracked 32 companies out of my database that have moved out of California since 2001.
California lost 25 percent of its manufacturing jobs between 2000 and 2007, and we know it has only gotten worse since then. The California Economic Development Department reported that we lost another 23,400 jobs between July 2009 and July 2010. The unemployment rate of 12.3 percent is now higher than the national average of 9.6 percent.
Make sure you understand all of the ramifications before you decide how to vote on these propositions. How you vote this fall on these propositions may determine whether the exodus of manufacturers accelerates or diminishes. The busines you help keep in California or the job you save by how you vote may be your own.