The No on 1A people can save their money... Maviglio has done their work for them!
10. There are no restrictions on spending in typical years.
The new “rainy day” reserve requirements of Prop 1A only apply in peak years -- when revenues exceed 10-year trend patterns and the state is flush with case. If increased revenue levels are sustained, then ongoing spending increases can occur as well.
9. Increases reserves to avoid massive cuts during down years.
By requiring a portion of peak revenues are put in reserve, the funds will be available to use during bad budget years to avoid major cuts to programs – the budget yo-yo that hurts programs that can’t plan from one year to the next. Without Prop 1A, future peak revenues will likely be squandered away with the massive tax increases that Republicans have forced in the past. Putting the peak revenues in reserve will ensure that adequate funds are available to withstand economic downturns.
8. Allows full restoration of recent and future budget cuts.
Most of the recent budget cuts have been borne to the state’s landmark education funding protection initiative, Proposition 98, which is unaffected by Prop 1A. But just as important is that there is sufficient room for budget spending to grow to restore the rest of the recent budget cuts (such as those to health and human services) before the reserve requirements take affect.
7. Makes no changes to Proposition 98.
Proposition 98 is not changed at all. In peak years, revenues above the 10-year trend line must go to meet Proposition 98 requirements prior being put in reserve. This ensures that Prop 1A will never interfere with Proposition 98. That’s great news for our schools.
6. Provides $9.3 billion repayment of cuts to schools.
No other area of the budget has be cut as much as our schools. Passing Prop 1A is the only guarantee that recent cuts to our schools will be restored.
5. Increases annual spending by about $1.5 billion.
Under current Constitutional Requirements, three percent (about $3 billion) of revenues must be set aside in reserve. Prop 1A spits this amount for two purposes, 1.5 percent for the reserve and 1.5 percent to cover other General Fund costs (such as Prop 98 repayment obligations and debt payments). This frees up about $1.5 billion for other spending priorities.
4. Allows for all revenues from new tax increases to be appropriated.
Tax increases will not be included in the 10 year trend line until they have been in place for 10 years. Therefore, even if the revenues from a new tax would take revenues above the 10 year trend line, the revenues will not be required to be put in reserve. This is important, because if the Legislature wants to raise new revenue for an expanded service or program, like universal healthcare, it can do so without the revenues being diverted to the reserve and not for the new purpose.
3. Makes no changes to special funds and fee revenues.
Special funds and fee revenues are not impacted by Prop 1A at all. This means that all the environmental and transportation programs funded through special funds will not be impacted by Prop 1A, even during peak years. In addition, any fee increases approved to implement AB 32, the state’s landmark global emissions law, or any other new program will be unaffected by Prop 1A.
2. It is NOT the Republican Spending Cap.
For several years, the Republicans have proposed a hard spending cap that would eviscerate Prop 98, ratchet down spending so bad years become the new spending ceiling, make all budget cuts permanent, and cap special funds and fee revenues along with General Funds. This proposal does not do any of these things, and instead simply requires a portion of revenues during peak years be put aside to be available during bad years.
1. Its failure would become Exhibit A in Republican arguments against tax increases for the next generation.
The passage of Prop 1A extends the recently enacted historic tax increases by an additional two years. The right wing views Prop 1A as a referendum on those taxes. So if it fails, Republicans for the next generation will point to the failure of Prop 1A as a clear sign that the people do not want tax increases. Their argument will be that if the people refused to support tax increases when the state faced a $42 billion problem, then they will never support a tax increase to close a budget gap.
Steven Maviglio owns Forza Communications, a Sacramento-based public affairs firm. He is the former Deputy Chief of Staff to Speakers Karen Bass and Fabian Nunez and was press secretary to Gov. Gray Davis.
Wow... with qualifications like that... sign me up!