Will grumpy voters bail out state?

<p>California’s economy is crumbling. People are losing homes and jobs. The month began with a higher sales tax after wrangling by Sacramento politicians over seemingly endless deficits.</p><div class="art_item art_item_inset art_item_facts"> <h3>Facts</h3> <h4>ELECTION INFORMATION</h4> <p>-- Sonoma County voters will receive election pamphlets and absentee ballots in the mail this week for the special election on May 19.<br>-- The last day to register to vote in the election is May 4. Six state budget-related measures will be on the ballot.<br>-- There are 143,000 absentee voters in Sonoma County, nearly 57 percent of the county’s 252,000 registered voters.<br>-- Absentee ballots may be returned as late as Election Day.</p> </div> <p>Now, the governor and Legislature are putting their prescription for the state’s fiscal woes into voters’ hands, with six ballot measures set for a May 19 special election.</p><p>Backers say California’s economic well-being is at stake, even though voters — who will receive their absentee ballots this week — have shown little awareness of the election, which could be decided by as few as 40 percent of the electorate.</p><p>Supporters representing a broad swath of the state’s most powerful interests, from Republican Gov. Arnold Schwarzenegger to major businesses and teachers unions, already have pumped nearly $11 million into a campaign war chest.</p><p>But critics say the ballot measures amount to a camouflaged tax hike, a faulty spending cap and a hastily conceived budget shell game that fails to address California’s systemic financial ills.</p><p>Voter pamphlets and absentee ballots are arriving in mailboxes a week after irate Tax Day protests were held around the nation, at the state Capitol and in downtown Santa Rosa.</p><p>“Voters are surly and angry,” said David McCuan, a Sonoma State University political scientist. “The timing couldn’t be worse.”</p><p>The election catches Californians in an economic trough, having lost nearly 606,000 jobs and 236,000 homes to foreclosure in the past year.</p><p>If the measures pass, money will be diverted from health care programs established by voters, the lottery will be tapped and voters will have vented their frustration by withholding pay raises for lawmakers during years when the state runs a deficit.</p><p>The linchpin is Proposition 1A, which includes a spending cap pushed by Republican legislators as their price for supporting the election package. It also extends for up to two years the $12.5 billion package of sales tax, personal income tax and vehicle license fee hikes adopted by the Legislature in February — the state’s largest tax boost in 18 years.</p><p>If approved, 1A would bring in an additional $16 billion. Even if the measures pass in May, however, the state deficit could still reach $8 billion through June 2010. If voters turn down the ballot measures, it swells to $14 billion.</p><p>“We have spent ourselves into a hole and we need to pay to get out,” said Cynthia Murray, chief executive of the North Bay Leadership Council. “If we don’t stabilize the state budget we will lose more jobs and businesses.”</p><p>The council, which represents major local employers, has endorsed all six ballot measures.</p><p>“It’s a band-aid, but it’s a necessary band-aid,” Murray said, acknowledging the package doesn’t solve the state’s underlying budget problems of expenses that outpace revenues.</p><p>Anti-tax advocates are enraged, blaming the tax increase on Democrats and contending the impact is largely cloaked in the ballot language.</p><p>Proposition 1A is “a ravenous wolf in sheep’s clothing,” said Jon Coupal of the Howard Jarvis Taxpayers Association.</p><p>But whether the small and lightly funded cadre of ballot measure opponents can overcome the prestige, power and money of California’s political and business establishment aligned with the ballot measures remains to be seen.</p><p>McCuan said the outcome could hinge on a low turnout by grumpy, recession-battered voters, including the conservative core that faithfully votes in special elections.</p><p>Barbara O’Connor, a Sacramento State political analyst, said all conventional bets are off this year. “It’s uncharted territory,” she said.</p><p>Campaign donations are pouring into Budget Reform Now, the pro-ballot measure coalition that includes the governor, Democratic and Republican leaders, and dozens of education, labor, public safety, agriculture and business groups.</p><p>Ballot measure backers will wage a multimillion-dollar propaganda war of mailers and TV ads, but it begs the question: “Is anybody listening?” said O’Connor, director of the Institute for the Study of Politics and the Media at California State University, Sacramento.</p><p>Assemblywoman Noreen Evans, D-Santa Rosa, acknowledged taxpayer anger over the AIG bonuses, bank bailouts and state government gridlock. “There’s no good time to raise taxes,” said Evans, who as Assembly Budget Committee chairwoman was among the architects of the ballot measures.</p><p>The consequences of rejecting the package would be even worse because $6 billion worth of first-year deficit relief would disappear, according to the Republican govenor and Democratic lawmakers.</p><p>Parks and schools could close, highway and bridge maintenance could slow, and health care services could curtailed to offset that much red ink, Evans said.</p><p>Unlike a private business, the state can’t shut its doors or withhold mandated services in the face of economic decline, Evans said. The budget package enacted in February cut state spending by $15 billion, resulting in furloughs for state workers and potential layoffs for thousands of teachers.</p><p>State spending swells largely due to population growth and inflation, Evans said. “We’re running as fast as we can to stay in place.”</p><p>But critics say the ballot measures are flawed.</p><p>The extended taxes will cost the average California family more than $1,100 a year, Coupal said. Proposition 1A’s ballot language obscures the higher taxes, an “intentional deception,” he said.</p><p>Proposition 1A’s title says the measure: “Changes California budget process. Limits state spending. Increases ‘rainy day’ budget stabilization fund.” The ballot summary mentions “higher tax revenues of roughly $16 billion,” but does not spell them out.</p><p>Murray said the language is typical of California ballot battles. “It’s Madison Avenue coming to politics,” she said. “I don’t fault them for trying to put it in the best light.”</p><p>Taxes are “driving out business and making it increasingly difficult for middle-class families to be able to live and thrive,” said Michael Erickson, Sonoma County Republican Central Committee chairman. The committee supports a no vote on all six measures. </p><p>The spending cap, built into Proposition 1A at the request of Republican legislators, limits the use of excess revenue but doesn’t return those dollars to taxpayers. “It’s a phony cap,” McCuan said.</p><p>“It’s too easy for the Legislature to elect to spend money,” Erickson said.</p><p>Proposition 1F, another request by Sacramento Republicans, blocks pay raises for lawmakers and the governor in budget deficit years.</p><p>It’s a “feel good” measure for voters, who gave the governor a 33 percent approval rating and the Legislature 11 percent in a recent poll. Proposition 1F could get 80 percent approval on May 19, McCuan predicted.</p><p>But for critics, the ballot measures’ worst flaw is their failure to address California’s chronic fiscal problem: revenues and expenditures that never match up.</p><p>The propositions are a mix of temporary tax increases, revenue transfers and borrowing against future revenue sources, including lottery profits. Proposition 1B burdens future budgets by promising to repay $9.3billion borrowed this year from public schools and community colleges, starting in 2011-12.</p><p>Proposition 1A, if adopted, would extend a 1 percent sales tax increase from its scheduled sunset in 2011 to 2012; a 0.25percent personal income tax surcharge from 2010 to 2012; and 0.5 percent boost in the vehicle license fee from a 2011 sunset to 2013.</p><p>Even with passage of the ballot measures, the Legislative analyst predicts a $12.6 billion deficit in 2010-11, more than doubling to $26 billion three years later.</p><p>Nobody really likes the package of ballot measures, O’Connor said, not even the lawmakers who crafted them as a compromise between Democrats who pushed for higher taxes and Republicans resolute in opposing them.</p><p>“The mantra is that it was the best we could get and if it doesn’t pass we’re in deep trouble,” O’Connor said.</p>