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Can Prop 25 fix California’s budget?

Eve Troeh Nov 3, 2010

Can Prop 25 fix California’s budget?

Eve Troeh Nov 3, 2010


Bob Moon: Given the tough political decisions in the tough economy, budgets in several states came in late this year. Way late here in California — 100 days past the due date. Tax refunds got held up, workers weren’t paid on time and people got mad. Last night, voters passed a measure aimed at making it easier to pass a budget.

But as Eve Troeh reports, it doesn’t help the underlying problem that California is broke.

Eve Troeh: The ads said Proposition 25 would light a fire under California lawmakers to pass a budget on time.

Proposition 25 ad: With Prop 25 legislators losing their pay and benefits for every day the budget is late, permanently. “If I don’t do my job, I don’t get paid, why should they?

That appealed to angry voters. Fifty-five percent of them said “yes.” California had the nation’s highest bar to pass a budget — a two-thirds vote in the legislature. Prop 25 lowers that to a simple majority.

Nancy Sidhu: And maybe we can get the state budget process back on track.

Nancy Sidhu is with the Los Angeles Economic Development Foundation. And she said “budget process” because fewer people now have to agree on the budget. But Prop 25 keeps another high hurdle in place. It still takes a two-thirds majority to raise taxes to fund the budget.

Dan Smith at the Sacramento Bee says that’s how voters wanted it.

Dan Smith: They felt their protection on taxes was intact. It’s still just as difficult to raise taxes.

It’s the same story in many places. Voters want services, but not higher taxes to pay for them. California has a $19 billion budget gap. Economist Nancy Sidhu says Prop. 25 doesn’t do anything to close it.

Sidhu: The amounts that are proposed for spending on the one hand vastly exceed the amount of revenue coming into state coffers.

And she says that leaves California just as broke as it was before election day.

In Los Angeles, I’m Eve Troeh for Marketplace.

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