Prop. 56 Targets Roots of Dysfunctional Budget Process

OK, the most important item for Californians on the March 2 ballot is:

Not Gov. Arnold Schwarzenegger’s $15-billion Sacramento bailout bond, Prop. 57. Nor his budget-balancing requirement, Prop. 58. They’re only the most ballyhooed and the most important to Schwarzenegger politically. If that bond fails, there’s a smaller backup available with a shorter payback at less interest.

Not the $12.3-billion school bond. That could be resubmitted to voters in November.

Certainly not the Democratic presidential contest. California, again, is a bit player on the national stage.

No, the most important decision for voters is on Prop. 56. Sponsors call it “the budget accountability act.” Opponents denounce it as “the blank check.”

It would bring historic, landmark change to the gridlocked process of state budgeting and taxation -- dramatically shaking up a failed system that has resulted in perpetually late budgets, gargantuan deficits and now massive borrowing just to make ends meet.

Schwarzenegger opposes the measure, but only if asked. He cut a deal with Democratic leaders not to aggressively fight Prop. 56 if they’d publicly endorse Props. 57 and 58. They did Tuesday on the Capitol steps.

The controversial core of Prop. 56 is the elimination of the two-thirds vote requirement for legislative passage of a state budget or tax hike. The threshold would be reduced to 55%, identical to where Californians lowered it for local school bonds four years ago. It’s the reason Democratic and labor leaders support the measure and why Republican and business honchos oppose it.

The two-thirds budget vote is a relic of the Depression era and puts California out of step with the rest of America. Only three states require any “super-majority” vote for a budget. Arkansas and Rhode Island are the two others.

The two-thirds requirement for tax hikes was imposed by Prop. 13 in 1978. Before that, tax increases could be passed by a majority vote, and there wasn’t much teeth-gnashing about it. In fact, it helped Gov. Ronald Reagan raise taxes when he inherited a deficit.

Prop. 56, incidentally, does not tamper with the low property taxes created by Prop. 13.

California also is abnormal on its tax votes. Just 11 states require a super-majority. We’re the only big state.

But California voters consistently tell pollsters they like the two-thirds vote. A survey last month by the Public Policy Institute of California found ambivalence and indecision about Prop. 56: yes, 41%; no, 35%; don’t know, 24%. But when asked about the two-thirds vote requirement, 73% said it was a “good thing.” And that was just for budgets. People weren’t even queried about taxes.

Voters probably wouldn’t buy just the 55% vote idea, especially for tax hikes. So it has been dressed up with attractive bangles and beads:

* The Legislature and governor would forfeit all salary and expenses for each day a budget was late. For 14 of the last 17 years, the state has entered a new fiscal year on July 1 without a budget.

* Lawmakers would have to stay in session until they passed a budget.

* A “rainy day” fund of “excess revenues” would be created and it couldn’t be tapped to increase spending. Backers say this is tighter than the rainy day reserve contained in Prop. 58.

The opponents are right about one thing: The backers are being disingenuous in their marketing. Voters aren’t hearing much from them about lowering the vote for budgets -- and nothing about tax hikes.

Rather, their TV ads attack the unpopular Legislature -- for partisan gridlock, for “a political food fight.” The solution they stress: “No budget, no pay.”

“If the proponents were straight with voters, it wouldn’t have a chance,” says Jack McCarthy, president of the California Taxpayers Assn., a leading opponent.

The opposition TV ads come closer to telling it straight: “The real purpose of Prop. 56 is to give the Legislature a free hand to increase taxes.”

“Free hand” is a stretch. Legislators -- 44 in the Assembly, 22 in the Senate -- still would have to vote to increase taxes, and for most that’s a tough vote. Then a governor would have to sign the bill. And Schwarzenegger would veto any tax hike, unless a bipartisan deal was cooked.

Of course, Schwarzenegger won’t be there forever, and that worries opponents.

But Lenny Goldberg, director of the California Tax Reform Assn., a Prop. 56 backer, points out the illogic under current law of allowing a tax loophole to be created with a majority vote, but requiring a two-thirds vote to close it.

“The tax system becomes a roach motel,” he says. “Once they crawl in, they never crawl out.”

Look, the two-thirds barrier for budgets hasn’t prevented overspending. In fact, it has led to higher pork-barrel spending to buy GOP votes. It has held down taxes, but resulted in dishonest budgets, ruinous deficits, near-junk bond credit status and unconscionable borrowing.

The two-thirds requirement is undemocratic and encourages tyranny by an uncompromising minority. Give the majority party the power to operate -- and the rope to hang itself.

Sacramento hasn’t been working. The archaic two-thirds vote is one reason. Scrap it and get real change.

George Skelton writes Monday and Thursday. Reach him at george.skelton@latimes.com. Read previous columns at latimes.com/skelton.