California voters, tired of living with a budget deficit,
overwhelmingly passed Propositions 57 and 58 in Tuesday’s
elections while rejecting another budget measure, Proposition
56.
Propositions 57 and 58 allow the state to issue $15 billion in
bonds to pay off the current budget deficit. Proposition 56 would
have made it easier for the state Legislature to pass the budget by
lowering the number of votes required to have a majority.
As of late Tuesday night, Proposition 58 was passing with a
comfortable margin. Proposition 57 was also passed with a decisive
vote.
Proposition 56 was defeated with only 36 percent of voters
approving it.
Propositions 57 and 58 were probably the most publicized
measures on the ballot and were pushed especially by Gov. Arnold
Schwarzenegger since he took over in the governor’s
office.
“We’re relieved that 57 and 58 appear to be passing
because the alternative is extreme cuts and higher taxes that would
otherwise be part of the solution,” said Brendan Huffman,
director of public policy of the Los Angeles Area Chamber of
Commerce.
Proposition 57, dubbed the Economic Recovery Bond Act, could
only be passed with Proposition 58, the California Balanced Budget
Act, which requires that the state pass a budget which does not
exceed the state General Fund and stipulates the bond allowed in
Proposition 57 is a one-time deal.
“Without the bond, $15 billion in debt would have needed
to be filled within the current budget in addition to the current
problem we already have this year,” said state Sen. Sheila
Kuehl, D-Los Angeles. “The credit of the state would be at
risk.”
In the short term, these two propositions will replace the
current $10.7 billion bonds approved last year and will allow the
state to address its budget deficits.
But those opposed to the measure did not think the two
propositions were the best solution to the deficit, though they
said they faced a tough battle trying to defeat the
propositions.
“I think that we went into this thing knowing that this
was a David and Goliath effort because the governor is putting much
of his capital between 57 and 58,” said Joe Armendariz of the
Santa Barbara Taxpayers Association. “You can’t borrow
your way out of debt. It’s not that we’re getting too
much debt approved, it’s that we are spending too
much.”
Propositions 57 and 58 will not be paid off for approximately
nine to 14 years, a marked increase from the expected five-year
term for the previous bond. Thus, Armendariz said the bond would
create more problems in the future.
“It’s absolutely a short-term solution,” he
said. “It doesn’t pay off the deficit. We need to make
the government smaller, reform budget with performance-based
measures and begin to economize. We are not going to balance the
budget by borrowing or taxing, but going to get the economy moving
again.”
Proposition 56 was another ballot measure attempting to deal
with California’s budget deficit dilemma by making the budget
easier to pass in the state Legislature.
“We were a little disappointed because we did not get the
results that we would have hoped for,” said Eric Wooten, a
spokesman from the Californians for Budget Accountability, a
pro-Proposition 56 organization.
Proposition 56 is a measure that would have encouraged the state
Legislature to pass the budget in a more timely fashion. The main
premise of the proposition would have lowered the two-thirds vote
currently necessary to pass a state budget to a 55 percent
vote.
Additionally, 25 percent of various state revenue increases
would have been required to be deposited in a reserve fund, to no
longer be used to increase spending. State legislators and the
governor would also have lost salary and would have had to remain
in session until the budget passed.
“We’re very hopeful that we are entering a new phase
of California politics,” Wooten said. “Hopefully the
governor and the Legislature will pass a responsible on-time budget
this year.”
Those opposed to Proposition 56 said they are not against budget
reform.
“I think voters want budget accountability, but 56 is not
that budget accountability,” said Nick DeLuca, the spokesman
for the No On 56 campaign. “They said that with a resounding
“˜no.'”