Posts Tagged Proposition
PROP – 42 – Legislative Constitutional Amendment Transferring Obligation To Pay Local Costs of “Open Meeting Laws” From State To Local Governments
Recommendation: Weak Yes
Although it is difficult to locate, the impetus for this Proposition appears to stem from the fiscal cut-backs that occurred in 2013. During the initial State Budget, the Governor and legislature cut the payments made to local governments to cover expenses associated with Open Meeting laws by suspending the requirements that local governments comply, or at a minimum, local governments took that position. (see http://www.mercurynews.com/opinion/ci_25367980/mercury-news-editorial-proposition-42-improves-access-public). What is even more deeply buried is the reason that suspending the payments could mean that the local governments would not need to comply with the open meeting laws – after all, the state has a long history of “unfunded mandates”; laws that obligate local governments to do or refrain from doing acts that require expenditure of resources without providing those local governments any payment. (For an analysis of California’s unfunded mandates see http://wpsa.research.pdx.edu/meet/2012/settle.pdf).
Undaunted, we set our Polito-researchers to the task. It turns out that California is a strange state (we know, tell you something you don’t know). California’s voluminous and oft-modified (thank you propositions) Constitution actually has a provision that prohibits unfunded mandates. It is found in the California Constitution, article XIII B, section 6, subdivision (a) (see – http://www.boe.ca.gov/lawguides/property/current/ptlg/ccp/art-XIII-B-all.html#6). Of course, over the years, the legislature has still found ways to avoid payments. In particular, one Polito-friendly contact we spoke with who deals with information requests on behalf of local schools told us that while expenses for such requests are carefully tracked (to enable reimbursement by the state), they haven’t actually seen a reimbursement from the state in years. For a discussion of the history and treatment of unfunded mandates in light of Article 13b of the state constitution see the 2011 case of California School Boards Assoc. v. Brown. (http://caselaw.findlaw.com/ca-court-of-appeal/1557120.html).
So, while we were unable to find authority for the proposition that the State’s failure to fund reimbursements for “open meeting” laws would necessarily relieve local governments from the obligation to comply (assuming the State used some of the clever tactics employed in the past), there is a realistic fear that such an argument could succeed.
Separately from the fear that “Open Meeting” laws could be undermined in this way we also agree with the proponents’ underlying premise: That “Open Meeting” laws should be considered core principles of good government and therefore part of a local government’s obligations to fund its own functions.
Moreover, responsibility for paying half of the “Open Meeting” laws – those incurred under the Brown Act” was already transferred to local governments by initiative in 2012. So, it seems sensible to give the same treatment to the other half of these important laws.
Finally, we are also mindful of the unproven “whispers” that local governments routinely “pad” their reimbursement requests and that transferring the cost obligations to those local governments will create an incentive for efficiency.
In short, while it is hard for us to get excited about foisting more expenses onto local governments, at the end of the day this expense seem properly placed at the local level. Interestingly, even local governments are not really opposing this measure. We found only one reference to an opponent (which we could not independently verify) to Prop 42, no editorial boards opposing the Proposition, and no funds expended against the Proposition.
Recommendation: Strong Yes.
Long-time readers of this blog (or its predecessors) are aghast: Is that really a “strong yes” on a bond measure? Collect yourselves; it is. The reason is that this is an unusually smart bond measure. Also, as our title suggests, while this is correctly identified as a state bond measure, thanks to our surprisingly fiscally conservative state legislature, we view it as more of a re-allocation of already authorized bonds from one program to another.
First, unlike most initiative-created bond measures, this one is not created by an outside special interest group seeking to shift more money away from the ever-shrinking discretionary funds managed by the legislature. Rather, this initiative finds its roots in Assembly Bill 639, sponsored by State Assembly Majority Leader John Pérez and passed both the Assembly and the State Senate unanimously. So, this is bond measure that has been planned for and is supported by our legislature as opposed to one that is being foisted upon them (as is the case for most bond measures).
Second, the legislature actually did plan for this measure. They identified an underutilized Cal-Vets program Created in 1922 and most recently funded by initiative in 2008. That program has about $600 million in authorized but unused bonds intended to help vets. So, the legislature de-funded $600 million in that program and passed AB 639 creating Proposition 41 to authorize the same $600 million in bonds be used for a smarter program. We at PolitoMuse are not fans of micro-managing our legislatures, so we would argue that it should be sufficient that the legislature has unanimously found the new program to be superior for us to support it. Nevertheless, the information in the voter guide and on-line suggests that the new program is more specifically directed toward low and very low-income veterans, whereas the old one is not. We think that is sensible. It appears that the problem with the old program was essentially that the vets, who qualified for it, didn’t need it because they have sufficient resources to qualify for market loans. Those that needed it, because they lacked financial resources, couldn’t qualify (see e.g. http://www.latimes.com/opinion/editorials/la-ed-vets-housing-bonds-20130915-story.html).
There is one key difference in the “new” bonds issued through Proposition 41 as opposed to the old ones they are replacing. The old Cal-Vets program used monies collected from the vets to repay the bonds. So, while taxpayers were technically obligated by the bonds issued, they did not actually have to repay them; that was done by the vets who were beneficiaries of the program. Of course, this also meant the program could only be used by those who could repay the debt – hence the reason that the old program was under-utilized. The new program does not require the beneficiary to be able to fully re-pay the debt. So, presumably taxpayers will actually shoulder some if not all of the repayment obligation.
We think it is appropriate for taxpayers to help pay to house low-income (defined as earning no more than 80% of income earned by local families) and very low-income (defined as earning no more than 30% of income earned by local families) vets in California. We like that unlike the prior program this one will help homeless vets – a huge and ever-growing problem in California. (We’ll avoid the obvious rant about how reprehensible it is that brave men and women, who have endured combat and the associated physical and emotional scars, come home only to be forced to sleep on the streets.) Also, we note that there are countless studies that show that paying to house very low-income individuals is far less expensive (i.e. more fiscally sound) for state and local governments when compared to allowing those individuals to remain homeless. Here is one study that shows that the total cost of “supportive housing” is about $600 per month while the aggregate costs to governments in dealing with the same individuals when they become homeless skyrockets to $2,897 (See http://www.economicrt.org/pub/Where_We_Sleep_2009/Where_We_Sleep.pdf). So, from both a moral and a financial standpoint, this program seems to make sense. Add to this analysis the fact that this program is intended to work with local governments, non-profits, and private investors, to leverage their monies and expertise, resulting both in better results and increased economic activity (funding increased construction etc.) and this would seem to be something of a “no-brainer.” This point also eliminates another of our common “pet peeves” regarding bonds – this proposal uses bond monies to build assets (here buildings and houses) generally, that is a more responsible use of borrowed money (as opposed to using borrowed money to simply fund continued salary or other operating costs in a program).
The US Department of Housing and Urban Development (HUD) issued the most recent “Annual Homeless Assessment Report (AHAR) to Congress” in 2013 (https://www.onecpd.info/resources/documents/ahar-2013-part1.pdf) That study found that California has the highest percentage of homeless population in the U.S. and that after years of decline, the total number of homeless in California suddenly increased in 2013. It is widely anticipated that as veterans continue to come home from the recent wars, those numbers will continue trending up. Meanwhile, the number of homeless shelters in California declined.
Finally, we readily dismiss the single individual – Gary Wesley – who provided the argument against this proposition. His suggestion is that to address the present problem of homeless veterans the U.S. should avoid going to war in the future. Unless Mr. Wesley has a time machine, we don’t think that is sound policy.
See our analysis of California’s Proposition 31 and its mishmash of various purported reforms. Some of the ideas are good, some are bad, and some are none-of-the above. Overall, we don’t think this watered down “reform” plan does anything to “advance the ball” on the key state issues that call out for government reform.
We’ve got to hand it to Prop 38 backer Molly Munger, the multi-millionaire and her PR posse are pounding the airways with an avalanche of slick ads pushing her self-created tax plan. According to polls and questions we are getting here at PolitoMuse her money is yielding a strong return. Unfortunately, her ads are a bit loose with the truth.
“Prop 38 Doesn’t Restore Education Funding”
The Prop 38 folks just missed that one word we highlighted in making their ads. As we outline in our analysis of Prop 30 and Prop 38 only Proposition 30 restores the education funds removed in the last cost-cutting budget. Specifically:
- Prop 38 restores exactly $0.00 of the funds cut from higher education – it will necessarily result in more increased tuition costs and reduced services to all community college, Cal State and U.C. students.
- Prop 38 restores exactly $0.00 of the funds cut from Developmental Services (the folks that provide educational support for the disabled in California)
- Prop 38 does not even “restore” the K-12 monies removed by the current budget. It provides different sums of money (resulting in a net reduction this year followed by a net gain in later years – more on that later) but then mandates that it be spent in a particular manner, including about $50 million (1%) to fund a new bureaucracy created by Prop 38 and some $750 million (12%) annually on computers and training whether schools need them or not.
By contrast, Proposition 30 does exactly what Proposition 38 falsely claims — it precisely “restores” the funds removed by the current budget cuts. Cuts that were implemented with the intention of giving voters the choice posited by Proposition 30.
Prop 38 Doesn’t Keep Money Away From Bureaucrats
Molly and her PR folks missed that same important word on this claim too. As we explain in our analysis, Prop 38 actually creates a massive bureaucracy; it just moves bureaucratic decisions from the legislature and local communities to the Superintendent of schools and a newly created non-legislative board (not exactly a “win” in our book). It also imposes required spending on all schools throughout the state in a manner that will be good for some and bad for others. For example, it will require spending on “technology” totaling nearly 750 million in year 2 and nearly $1 billion in years 5 through 12 – And like the rest of the initiative, that allocation cannot be changed absent passage of another state-wide proposition. Finally, it does one of the biggest budgeting “no-no’s” one can do: It creates massive fluctuations in the income stream for both schools and the general fund. Here is how the estimated money flow looks just for K-12:
- Year 1 = $3 Billion (a net $3 billion loss based on existing budget cuts)
- Years 2-4 = a massive jump to about $6 billion
- Years 5-12 = another jump (and a corresponding, inexplicable reduction in other expenditures) to over $8.5 billion.
The proponents of Prop 38 offer zero justification for the funding levels they selected, much less the rational for the sudden, massive, 50% increase between year one to two and the nearly 30% increase between years four and five.
Similar zigzagging of expenditures is found at the state general fund level which receives substantial funds to pay down debt for four years, followed by a sudden, unexplained, end to those payments (and no we will not come anywhere near paying off our debt after four years).
Prop 30 does the opposite. It provides a steady, predictable, income stream at proven levels previously used by the State.
As a matter of state law, Prop 30 and 38 can’t both be enacted. That means you have to pick one, the other, or neither. This is one of the many reasons proponents of Prop 30 begged Molly Munger to withdraw her well-intentioned, but poorly crafted, initiative. Because she refused, it means that those who support a modest tax increase to increase funding for education will be split between two competing statutes while those opposed will just vote against both. That is unfortunate for the reasons we set forth in our analyses. Our state desperately needs the funds targeted to the broad range of educational sources in Proposition 30. We hope voters will be savvy enough to wade through the confusion to vote in favor of 30 and against 38.
A Yes vote on Proposition 32 promises to cut “the money tie between special interests and career politicians.” If only using all the right buzzwords made it so.
Read our full analysis here
P.S. And isn’t ironic that the estimated combined spend on the Yes/No on Proposition 32 campaigns is over $50 million? True campaign finance reform is sorely needed in this state . . .
POLITOMUSE ENDORSES PROP 30 OVER PROP 38
As we update our website for the upcoming November 6 elections, we will be rolling out analyses of selected propositions, starting with a comprehensive comparative analysis of two key tax proposals in propositions 30 and 38. Make sure to click “email subscription” on the right hand side of the site to ensure that you get notification of our posts during the election cycle and then watch your email to “confirm” your subscription.