Cal Forward: We ‘Make No Change’ in Sinclair


mckernhertzLast week, Calbuzz stirred up a hornet’s nest by reporting that one of  California Forward’s proposed constitutional initiatives would effectively overturn the Legislature’s ability to raise fees with a majority vote as granted by the courts in the Sinclair Paint case. In doing so, we cited Section 7 of one of their two proposed measures. It amends Section 3 of Article XIII A of California’s Constitution to specify that a two-thirds vote of the Legislature would be required to replace, with a fee, any “revenue…that was generated by a tax” the previous year. Cal Forward squawked about our piece, so  we offered them a chance to explain why our analysis was wrong. Here’s their response which simply asserts they’re making “no change.” But their argument begs the question: If it’s true that the measure would “make no change” in Sinclair, why is Cal Forward seeking to, uh, change it? We stand by our analysis.

By Thomas V. McKernan and Robert M. Hertzberg
Special to Calbuzz

In the hyper-partisan world of California politics, folks aren’t quite sure what to make of California Forward and our plan to reform state government.

Critics on the left object that our plan doesn’t make it easier to raise taxes.  Critics on the right complain that it won’t let a minority of the state’s lawmakers continue to hold up the state budget.

They’re both right – but both are also missing something important about this effort: Our plan doesn’t lend itself to the typical scorecard that attempts to tally winners and losers on one side or the other.

Why? Because its fundamental orientation comes from neither the left nor the right. It doesn’t seek to tilt the playing field in either direction. It is instead, quite simply, a plan to make California’s government work again.

Take for example, the partisan wrangling over fees. As Calbuzz noted last week about the Sinclair Paint court decision, the Legislature needs only a simple majority to impose fees when a nexus exists between the regulatory program being imposed and the payer of the fee.

Conservatives have long viewed this authority as an end-run around the two-thirds majority vote requirement for raising taxes. These concerns were heightened late last year when Democratic lawmakers attempted to impose a multi-billion dollar fee that would have replaced the state’s current gas tax, and simultaneously raised other taxes, all by majority vote.

After much debate, the leadership of California Forward agreed its reform initiatives plan should make no change to the Legislature’s authority under Sinclair Paint.

Instead, the plan requires a two-thirds vote only on a fee that replaces revenue previously generated by a tax.  The good folks here at Calbuzz read this provision differently than the bipartisan legal team that helped California Forward craft our proposals. No surprise there.

But there’s also no question about our intent, which was to raise the vote requirement only in those rare instances where lawmakers impose a new fee to replace an existing tax forestalling the kind of “triple flip” that was attempted last year.

Those who expect our reform initiatives to mark just one more round in the ongoing partisan battle royale are likely to be disappointed.

That’s no accident. The members of California Forward’s bipartisan Leadership Council believe strongly that the problems facing our state won’t be solved by politics as usual, where the parties and the special interests square off against each other, dig in their heels and get nothing done.

You don’t have to be a policy expert to know that one of the biggest problems we face is California’s inability to approve a sensible state budget on time. Our first proposal, the Best Practices Budget Accountability Act, makes some practical, common-sense changes to end budget gridlock by taking sound practices from other states and applying them to California. Among them:

— Pay-As-You-Go – Requiring leaders to make hard choices by identifying right from the start how any new program would be paid for.

— Reduce Inefficiency and Waste – Requiring the Governor and Legislature to set clear goals for every program, measure its effectiveness, and fix or cut what doesn’t work.

— Pay Down Debt – Setting aside funds from occasional spikes in revenues to pay off debt.

— Long-term Planning – Requiring leaders to think ahead by creating two-year budgets and long-term revenue and spending forecasts.

— Majority Vote Budgets – to keep a small minority of politicians from holding up the budget for the entire state, but requiring a two-thirds majority for any tax increase.

— No Budget, No Paycheck – Requiring all legislators to forfeit their salary, travel and living expenses whenever they miss the budget deadline.

A second measure, the Community Funding Protection and Accountability Act, shifts power away from Sacramento and gives more responsibility to local government. It protects local tax dollars that belong to counties, cities and schools from being redirected to balance the state budget, and gives local officials new incentives to work together, eliminate overlapping programs and become more efficient.

The stakes in this debate may not be partisan, but we believe they’re high enough.

We all take pride in the fact that California has always led the way – in technology, education and quality of life.

But year after year of structural budget deficits, accounting gimmickry and a lack of clear priorities has shaken our confidence in ourselves and threatened our standing in the world. Our role as a national leader is in jeopardy.

We don’t need another partisan cat fight. We need a plan that gets California moving again so California can lead again — and that’s what California Forward is bringing to the table.

Robert M. Hertzberg and Thomas McKernan are co-chairs of California Forward, a nonpartisan reform group supported by contributions from California foundations. Their web site is www.caforward.org.

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There are 3 comments for this post

  1. avatar Ave7 says:

    CalBackward’s plan is full of the same sort of gimmickry and political gamesmanship that plagues the existing budget process, only worse. Perhaps because it is the same people playing in both games.

    Despite the happy talk about standing up to critics from the “left” and “right” in favor of “what works,” CalBack has pandered to powerful Sacramento political interests, including many who are funding this pop-up think tank.

    Most egregious is the predetermination that nothing is wrong with Proposition 13, and therefore nothing about it can or should be changed. Despite the fact that 1/3 rule is the main cause of gridlock and other dysfunctions in Sacramento, despite the fact that our property tax rates punish new homeowners while protecting businesses, and despite the fact that CalBack’s own website discusses the devastating impact of Proposition 13’s defects on local government, this group of termed-out politicians and their corporate mentors has decided that we can’t actually do anything to fix Proposition 13. Nothing could be more political, and less practical.

    What actually is being offered is just a series of hollow promises and sneaky tweaks:
    –The Sinclair language, for example, states that “the plan requires a two-thirds vote only on a fee that replaces revenue previously generated by a tax,” but in reality, ALL new fees replace revenue previously generated by a tax. This is a legal setup for conservative anti-tax groups to invalidate any majority-vote fee increase in court.
    –“Pay as you go” is a great slogan, but you can never peg each item of expenditure to a unique item of revenue collection, so it has the permanence of a sand castle.
    –“Reduce Inefficiency and Waste” is a real forehead slapper — amazing that no Governor has thought of that one yet. Clearly CalBack is unafraid to make the tough calls. (How about civil service reform, pension reform, mid-year rescission authority or other measures which would give a Governor actual authority to reduce inefficiency and waste?)
    –The phrase “Pay Down Debt” is about as innovative as “Breathe Air.” Behind the spin is a plan to capture revenue spikes, the details of which could either stabilize state spending, or devastate health and social service programs, depending on how it’s written.
    –“Long-term Planning” including a two year budget? In a state where revenue forecasts aren’t valid for more than three months? You might as well send umbrellas to a hurricane.
    –“Majority Vote Budgets” as a tool to placate Democrats with the illusion of power while we reaffirm 1/3 Republican rule over the revenue line. How sweet it will be for the 1/3 party to starve government of revenue while watching (but not voting for) the 2/3 party’s painful budget cuts. How deep does that rabbit hole go?
    –“No Budget, No Paycheck” is one of my favorite regulars of Republican panderhetoric. The party of millionaires needs their state paycheck about as much as they need a third yacht. But they use their 1/3 power to wreak havoc on the state, gridlock the process, and guess who pays the personal finance penalty? Middle class members of the majority party, who are voting “yes” on the deal, while the wealthy obstructionists, who don’t need the money, are the ones voting “no.” CalBack really shines when it comes to making millionaires smile.

    A second plan, the “Community Funding Protection and Accountability Act” is described in interesting but generic happy talk. Where’s the beef?

    Lost in this trickery and political gamesmanship is any real discussion of actual reform, like:
    –With all due respect to Rhode Island and Arkansas, taking off the bizarre list of 2/3 budget vote states — including BOTH halves of the budget: expenditures and revenue.
    –Dismantling categorical restrictions on school spending and other local government programs.
    –Sweeping away all initiative-imposed restrictions on revenue and spending to allow the legislature to do the job they’re elected (and paid) to do.
    –Fixing Proposition 13 by removing business property tax assessments from its protections.
    –Finalizing and protecting a formula for local government funding so that local electeds have both the responsibility AND the authority to run their governments.

    CalBackwards is a product of seasoned political hands, and it has all the bitter spices of a typical Sacramento meal. Dressed up with layers of happy talk and pie charts, this is one turkey for which almost none of us can be thankful.

  2. avatar SezMe says:

    Whenever I read of a group working so hard to be bipartisan or non-partisan, all I want to do is turn over the rock to see what is hiding underneath. But even that is not necessary with this gang. For me, the two most notable basic starting blocks for their work – casting the 2/3 requirement into stone and not dealing with Prop 13 – are at the very core of our governance problems. Yet CalF takes these off the table, THEN starts dealing.

    Well, no deal. Those two issues have to be faced and changes made. Anything else will serve only to preserve the current mess.

  3. avatar chrisfinnie says:

    A majority vote on the budget with minority control of revenues is no solution.

    That’s like telling a family, “You have the right to decide where you spend your money, but no ability to ask for a raise or look for a better-paying job. Your income is set in stone forever unless we can figure out ways to cut it even more.” Few of California’s residents would settle for that. The Assembly shouldn’t either.

    The Democrats especially shouldn’t. As Ave7 points out, as the majority party, they will then own the repeated, painful budget cuts they will be forced to make. Californians may understand that now when state revenues are down. But, if state services don’t improve when the economy does, the majority party will take the hit.

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