One Step Forward, Two Steps Back: Propositions 25 and 26 and the California Budget Process

California’s state budget process is dysfunctional. This is a well-documented reality, demonstrated by the consistent failure of California leaders, year after year, to approve a state budget on time, causing ballooning budget deficits to the tune of billions of dollars. The state’s Legislative Analyst’s Office has projected annual budget problems of $20 billion each year for 2015 through 2016.

The repercussions of this overdue budget and increasing deficit have been felt deeply by state workers, students in California’s education system, and families dependent on social safety net programs like CalWORKs and SNAP. As a result, Californians passed two budget reform measures in the November 2010 election: Proposition 25 and Proposition 26.

Proposition 25 eliminates the two-thirds vote requirement for adopting a state budget and implements a simple majority requirement. Traditionally, one of the most debilitating challenges faced by law makers when passing a budget was the two-thirds legislative vote requirement, which stipulates that two thirds of the legislative votes are required in order to pass a budget. This requirement had been problematic, because it required the majority party to seek votes from the minority party, allowing the minority party to impede negotiations and giving them disproportionate leverage in budget negotiations.

Democrats and Republicans, due to their distinct ideological platforms, were in a constant struggle over how to fill the budget deficit, increase revenue, and pay the state’s bills — a battle that made it nearly impossible to reach a progressive consensus. The inefficient two-thirds vote requirement, which makes it very difficult for the legislature to agree on a comprehensive budget, ultimately resulted in the use of simplistic patch-work and recurring accounting maneuvers to balance the budget, exacerbating California’s budget woes.

In voting to adopt Prop 25, Californians made a bold move by giving the majority party more control over the budget, thereby expediting the process by removing leverage the minority party had in impeding budget negotiations. Yet while this was a major step forward in creating a more efficient budget process that allows more room to restructure and maneuver the budget, Californians also took a paradoxical step backwards by adopting Proposition 26.

Before Prop 26 was approved by California voters, law makers had the ability to increase state and local fees by a simple majority, thereby making it a relatively straight-forward matter to appropriate funds for the state budget. The enactment of Proposition 26 mandates a two-thirds vote requirement if lawmakers want to impose or raise state and local fees to fund budget allocations, making it difficult to appropriate the funds necessary to close the ever-growing budget gap.

Proposition 26 provides the minority party with new leverage for negotiating and derailing the budget process. Whereas the majority party originally had to negotiate for long periods of time to achieve the minority party votes necessary to pass the budget, it will now have to engage in similarly arduous negotiations to legislate sufficient funding for the state budget. The majority party will therefore find it increasingly difficult to appropriate the necessary funds for the budget.

Some legislators are disappointed that Prop 25 passed, holding that it will give the majority party – at this moment, the Democrats -- too much power and limit a collaborative approach to formulating the budget. They favor Proposition 26, which they argue allows for a more balanced approach to raising fees. In all likelihood, however, Proposition 26 will simply cause a legislative headache, especially for the majority party as it fights for the necessary votes to fund the state budget.

What do you think? Did Californians make the right move in adopting Propositions 25 and 26?

Photo credit: prayitno