How should we vote in the California election on Tuesday, March 2, 2004? For me, the easiest vote is on Proposition 56, which would reduce from 2/3 to 55% the vote needed to pass a budget. This proposition would help fix the anomaly that the Legislature needs only a 50% vote to reduce taxes, but a 2/3 vote to increase them. At present, it is a lot easier for the Legislature to reduce taxes in times of prosperity than to increase them in times of fiscal crisis. This probably is part of the reason why we are in such a mess today. "Yes" on 56.
Proposition 55 is a $12,300,000,000 (yes, that is 12.3 billion, not 12.3 million) bond measure for educational facilities. An analysis of this measure ties in well with the analysis above of Proposition 56. The Legislature needs a 2/3 vote to raise taxes to pay for the interest on the Proposition 55 bonds, yet the voters can approve Proposition 55 by a 50% vote. No wonder California has problems! It doesn't help that the voters seem rather clueness, continuing to approve measures like this while expressing outrage that they might have to pay taxes to fund them. Proposition 55 might be a good measure if it required, say, a slight increase in the sales tax to service the debt (or a small income tax surcharge), but it is the wrong measure when it has no funding mechanism.
Next is Proposition 57, which would issue a $15,000,000 bond to pay off the General Fund deficit. First, it may be noted that about 1/3 of that deficit is due to Schwarzenegger's reduction in the car tax. Thus, we would be issuing bonds to cover a tax reduction. That is a crazy way to conduct fiscal policy! We are told that there will be dire financial consequences if the voters do not approve this bond. But such dire consequences are due almost entirely to the Legislature's and the Governor's refusal to even consider a tax increase (which, of course, would require a 2/3 vote). I recommend a "no" vote on Proposition 57 -- we need to hit the Legislature and the governor over the head with a 2 x 4 to bring them to their senses. If Proposition 57 is defeated, and Proposition 56 is enacted, there is at least some chance that the Legislature will do the responsible thing, and increase taxes (just as Republicans Ronald Reagan and Pete Wilson did when faced with similar situations).
Finally, there is Proposition 58, the California Balanced Budget Act. If this measure fails, Proposition 57 also will fail (even if it gets a majority vote). I recommend a "no" vote to help assure the defeat of Proposition 57. Anyway, Proposition 57 is a bad idea -- there is no reason for the budget to be in balance very year, and you can be sure that the politicians will come up with creative ways to get around the provisions of this proposition.