WHAT 1A WILL DO: Reigns in state spending by mandating that lawmakers put money away during good budget years so funding is available during economic downturns.
WHY YOU SHOULD VOTE YES: A large reserve with restrictions that prevent lawmakers from unsustainable financial practices will help California brace for future budget disasters.
Though it’d be nice to think that our state legislators had some smidgen of foresight, our current $41.6 billion state deficit is proof that absolutely no one was ready for even the slightest bump in the fiscal road, let alone a serious recession.
Perhaps that’s why Proposition 1A is nicknamed the ‘rainy day’ fund ‘mdash; state officials are finally taking a tip from their mothers and trying to pocket some cash for the long run.
Unfortunately, the savings tactic isn’t as simple when you’re grabbing at taxpayers’ wallets. If passed, Proposition 1A would extend recently increased sales, income and vehicle taxes for up to two additional years ‘mdash; resulting in a tax hike of some $16 billion.
Of course, raising taxes isn’t the point of the proposition. Its main purpose would be to save money in case of state catastrophes (say, like the one we’re in right now) by putting aside above-average state revenue, enforcing more rigid restrictions on how to spend that money and giving the governor more power to regulate state spending.
Though Proposition 1A is far too little of an effort this late in the game, and a messy way to clean up our serious state economic crisis, the measure is still our best bet in lessening the burn of budget cuts and giving our future economy a backbone.
Beginning in 2010-11 fiscal year, any extra revenue in the fund would be given to K-12 schools and community colleges to make up for unpaid funds promised to these institutions through Proposition 98.
After that, money would go straight to our rainy-day bucket until it reaches about 12.5 percent of the general state fund.
If and when we reach that goal, we’d use any excess cash to pay off budgetary debt.
That’s not to say there aren’t plenty of downsides to Proposition 1A.
Taxing California citizens who are already struggling to pay the bills won’t help bolster our economy and giving our governor more limitational power on spending could mean many state operational budgets will be even more severely cut.
But California is at its breaking point. If 1A isn’t passed, it won’t be long until the state budget will collapse on itself. We aren’t given the luxury of bankruptcy protection and we sure as hell don’t want to deal with creditor lawsuits, so it’s probably about time we start moving forward with a plan ‘mdash; however flawed it might be.