Has Proposition 25 Produced Balanced Budgets for California?

Proposition 25 was passed by voters in November 2010 to change the vote requirement to pass a state budget from two-thirds of the Legislature to a simple majority vote.

Last week, the majority party enacted a budget bill and 6 budget-related measures on June 15, the constitutional deadline for the Legislature to pass a budget.  However, over 20 so-called trailer bills that must be enacted to complete the budget have not yet been acted upon.  According to news media accounts, the Assembly Speaker and the Senate President Pro Tem have been negotiating differences with the Governor behind closed doors.

In their arguments in the official statewide voter pamphlet, proponents of Proposition 25 argued that "real people suffer when legislators play games with the budget."1

Nearly two years since its passage, it begs the question - has Proposition 25 produced balanced budgets for California?  Have legislators stopped playing games with the budget?

The California Budget Fact Check found that:

  • Public accountability has suffered in the majority vote budget process, with key decisions made behind closed doors outside the lens of taxpayers and the news media.
  • Even though budgets no longer require bipartisan votes for passage, the same types of gimmicks and tricks are still being used to avoid tough budget choices.
  • Though conventional wisdom held that there would be no problem passing an on-time, majority vote budget, the Legislature passed only part of this year's spending plan by the June 15 deadline, leaving more than 2/3rds of the budget bills available to be drafted or rewritten based on additional negotiations.

Lawmakers Write Budget Behind Closed Doors

One of the unintended consequences of Proposition 25 has been a sharp decline in budget decisions made in an open and public process. 

Government reform groups have long been concerned about openness in the state's budget process.  California has been given a "C-" grade for openness and transparency in the state budget process by the State Integrity Investigation.2 

In a normal transparent budget process, each house convenes subcommittee hearings to hear the Governor's budget proposal.  The subcommittee actions are transmitted to the full budget committee where the members of the Budget Committee vote on the specific proposal.  After each house produces their version of the budget, the Assembly and Senate reconcile the differences in a conference committee.  This had been the traditional process by which budget work was completed before a final vote for the last 15 years.  This process was open to the public, televised across the state and allowed for testimony from Californians. 

While the Assembly and Senate budget sub-committees held over 60 hearings in their respective houses this year on various budget issues, very few votes were taken.  In the end, only a portion of the committee work translated into votes taken by a budget committee or appeared in the actual budget plan.  In the Assembly, there was no full budget committee vote taken on the proposal that was sent to the Assembly floor. For the first time in recent memory this year, neither the Assembly nor the Senate convened the joint budget conference committee this year. 

After a mere 24 hours after a final budget plan was put in print last week, the Assembly and Senate were taking votes.  This effectively prevented taxpayers and the news media from thoroughly analyzing the budget and having the opportunity to weigh in on key provisions.

Despite Majority Vote Requirement, Budget Gimmicks Remain in 2012-13 Budget

One area where Proposition 25 has clearly not made much of a difference is in the use of so-called gimmicks.  Gimmicks have been used over the years to make budgets seem balanced.  In reality, this is a way for lawmakers to push off making tough choices to another year.  Despite the hopes of Proposition 25 proponents, budget gimmicks persist.

The chairman of the Senate Budget Committee said upon adoption of the main 2012-13 budget bill that, "this budget is not only balanced, honest and with no additional borrowing compared to the governor's May revision, it is projected to remain balanced for four years."3

But last week's issue of California Budget Fact Check highlighted the fact that less than $1.1 billion of the items identified by the majority party's leaders as being cuts were actually permanent spending reductions and $400 million of those cuts were not new reductions but continuation of existing program levels.  In addition, it includes $9.1 billion in fund shifts, deferrals and delays in cost-of-living adjustments, and $2.3 billion in loans and other actions.

Taxpayers, Schools and Services Still Hit Under Majority Vote Budget

The proponents of Proposition 25 argued at the time that the measure would "reform California's badly broken state budget process, so taxpayers (and) schools . . . are protected."4  But in practice, the budgets that have been produced still target schools. 

Governor Brown's 2012-13 budget plan relies upon voters enacting an $8.5 billion tax increase, little of which would actually go to protect education funding or critical services.  The majority party's budget plan also targets education for 99 percent of proposed trigger cuts if the taxes are not approved.  This includes a $5.5 billion cut to K-12 education and a $500 million cut to California's public colleges and universities.  The 2011-12 budget enacted by the majority party also targeted the classroom, cutting funding to K-12 education by $700 million overall.

Legislature Passes Only One-Third of 2012-13 Budget Before June 15 Deadline

On June 15, the Legislature began casting the necessary votes to enact the majority party's 2012-13 budget plan.  While the main budget bill (Assembly Bill 1464) and 6 additional budget "trailer bills" were enacted on June 15, the Legislature has yet to act on more than 20 key additional measures to implement the majority party's budget.  This includes provisions relating to education, public safety realignment, redevelopment agencies, tax measures and high speed rail.

One of the measures that was not yet passed involves welfare-to-work requirements.  Governor Brown has proposed that CalWORKs recipients participate in job training requirements as a condition of continuing to receive aid.  Legislative Democrats instead want to cut job-training requirements and give aid to recipients with no strings attached.  The Senate President Pro Tem said that, "we did not pass all of (the trailer bills) because we want to finish our negotiations with the governor before we vote on those measures."5

Click here to read past issues of "Budget Fact Check"

1 California Secretary of State's Office, Official Voter Information Guide, "Arguments in Favor of Proposition 25," November 2010 General Election

2 State Integrity Investigation, "California Corruption Risk Report Card"

3 "State Legislature approves budget on time," San Francisco Chronicle, June 16, 2012

4 California Secretary of State's Office, Official Voter Information Guide, "Arguments in Favor of Proposition 25," November 2010 General Election

5 "California Lawmakers Secure Continued Pay with Unfinished Budget," Sacramento Bee, June 16, 2012