Spending Limits: Yes on 71

Proposition 71 would set new and more sensible limits to growth in California government spending than those imposed in 1979. Public schools would be helped most by the changes, although one immediate side benefit would be an end to limits on what governments can spend to cope with California traffic jams. We strongly recommend a Yes vote on Proposition 71.

Under the formula imposed in 1979, government spending from year to year cannot rise faster than any increase in the national consumer price index. Proposition 71 would base the spending formula on increases in per-capita personal income--a much more valid measure of a society’s ability to invest in its future than an inflation index of any kind.

Using an index designed to measure the effects of inflation on families was a serious enough mistake in the design of the present spending limit. But under existing law the index is doubly flawed because it measures national prices, not California prices.

A consumer index is a poor yardstick for government spending because it focuses on the cost of bread, rent, gasoline and other goods and services. None of these bear any relationship to inflation in the costs of prisons, mental hospitals or highways. And no consumer index can possibly measure what it costs to keep up with a rising school population in which every year there are 140,000 more first-graders than there were the year before. Proposition 71 would not raise taxes. It would simply allow state and local governments to provide services with money that they already collect. Another bonus would make it unlikely that California would go through another absurd episode in which Sacramento rebated $1.1 billion to taxpayers in 1987 only to find that it needs that much, and perhaps more, to keep from going broke in 1989.

But the central point of Proposition 71 is education, an area in which California must make far bigger investments if it is to maintain its prosperity and leadership in future generations.

The investment is too small today. California lags $500 behind the average amount of money that other top industrial states spend on each student each year. Its investment in each student is $2,000 below what New York state spends, and it is even below the national average.

Proposition 71 would not lift the lid on government spending. It would leave in place every rigid rule that discourages tax increases. It would only change restraints on spending to allow a rate of growth more in keeping with California’s tradition of leadership and excellence and with its ability to make needed investments in its own future. California may lag behind the national average in school spending, but it ranks right up near the top in personal income--No. 4. We urge the approval of Proposition 71.