A crazy myth has been spreading about the core measure on the May 19 state ballot, Proposition 1A.
The myth is that Prop. 1A is a sneaky trick to raise taxes.
Truth is, it’s a measure to create a spending cap and rainy day reserve -- to slow the growth of state government.
That’s why many liberal groups oppose it.
Republican negotiators fought for the spending control in the Legislature. Democrats demanded a permanent tax increase in trade. Republicans would accept only a temporary two-year extension of an already-agreed-to two-year tax hike. And if voters didn’t approve the spending limit, there’d be no tax extension. In 2011, rates would revert to their old levels.
“The only way to structurally change California’s financial situation is to have a cap and rainy day” fund, asserts Assembly Minority Leader Mike Villines (R-Clovis), who helped negotiate a $42-billion deficit-reduction package that included a $12.5-billion tax hike. “And if voters aren’t going to say ‘yes’ to that, there should be no temporary extension of those taxes.
“So that’s it. We’re not trying to trick anybody. This never has been an attempt to be sneaky.”
The measure’s explanation got truncated by simplistic talk-radio entertainers and two ambitious Republican candidates for governor, state Insurance Commissioner Steve Poizner and former EBay chief Meg Whitman.
Poizner calls it “a cynical trick” that “seeks to fool the voters into approving a two-year extension” of tax hikes on income, sales and cars. Whitman asserts it’s “a sustained tax increase masquerading as reform.”
“Pandering is what they’re doing,” Republican Sen. Dave Cogdill of Modesto recently told me. “They’re pandering to the more conservative elements of the party in order to win the Republican primary. That’s the way it works. Everybody sees that.”
Cogdill, who nevertheless has endorsed Poizner for governor, was one of the budget negotiators -- a role that led colleagues to oust him as Senate minority leader. Republican lawmakers were reacting to the anti-tax furor of conservative party activists.
Voter anger at the economy and disgust with dysfunctional Sacramento provide fertile ground for anti-tax demagoguery.
As one reader, Stuart, e-mailed: The budget package on the ballot “sounds good. Sounds noble. Sounds courageous. The problem is trust. Do I trust Sacramento to establish a rainy day fund and to faithfully adhere to a spending cap?
“The answer is, of course not. I trust Sacramento as much as I trust an arsonist putting out the fire.
“And a temporary tax? . . . A temporary tax is not in the politician’s dictionary.”
Stuart is wrong about the last point, at least concerning Sacramento.
“When they say a tax is temporary, it generally is -- contrary to what you hear on the street,” says Dave Doerr, a tax historian and principal advisor to the California Taxpayers Assn., which supports 1A.
Doerr could think of only one example in modern times when a temporary state tax became permanent -- in 1993 when voters chose overwhelmingly to convert a temporary sales tax into a permanent local levy to help finance police and fire services.
Adam Mendelsohn, a strategist for the campaign promoting all six ballot propositions, says: “If people go in with a conspiratorial mind-set, there’s nothing you can do about it.”
He’d better hope there is. A lot of conspiracy theorists seem to be out there, believing -- or at least shouting -- that 1A is a tax plot.
But the people sprouting the biggest smiles and sighs of relief if 1A fails will be pro-tax legislators and interests, especially some public employee unions. They abhor the notion of spending controls.
“All the screaming libs are against it,” Villines says.
On Monday, a liberal coalition announced its opposition. It includes the California Federation of Teachers, the Service Employees International Union, the California Faculty Assn., the California Nurses Assn. and the League of Women Voters.
The California Teachers Assn., however, supports 1A. That’s because if Props. 1A and 1B both pass, schools ultimately will be repaid $9.3 billion they’ve lost from budget cuts.
But another union, the American Federation of State, County and Municipal Employees, seems more typical. “Prop. 1A is the worst thing that can happen to a so-called civilized society,” says Willie L. Pelote Sr., the union’s chief Sacramento lobbyist. “It’s going to be devastating.”
Two of the happiest people if 1A passes, I suspect, will be Poizner and Whitman, despite their public postures.
Privately, they must hope the tax hikes remain on the books two additional years so -- in the unlikely event one becomes governor -- they can avoid publicly unacceptable spending cuts or raising taxes themselves.
And as potential GOP governors confronting a Democratic Legislature, they must savor the prospect of a constitutionally required spending cap and rainy day reserve.
Both candidates claim they would impose their own spending controls as governor. That’s pretty naive, based on history.
“Outside of Adam and Eve being the first legislative body,” Villines says, “I don’t think there’s ever been a legislature that lives within its means. This is our chance to finally do it. This is a real chance.”
Probably the last chance, at least for a very long time. Taxes, by comparison, will be easy to raise.