Voters Reject Gov. Schwarzenegger's Budget Measures

Low Voter Turnout Rebukes Costly Special Election; Governor and Legislators Told, "Get Back to Work."

SACRAMENTO, CA – California voters overwhelmingly rejected what many saw as flawed and unworkable solutions to an escalating state budget crisis. In one of the worst voter turnouts in state history, Californians told Governor Schwarzenegger and legislators that they want real solutions to the state´s dysfunctional budget process.

Yesterday´s ballot included Propositions 1A through 1E, which would have dramatically changed the way budgeting is conducted in the state.

Proposition 1A would have limited future deficits and spending by increasing the size of the state "rainy day" fund and by requiring above-average revenues to be deposited into it for use during economic downturns and other purposes. The proposition also included spending caps on social services and would have provided unilateral powers to the Governor to make mid-year spending cuts. (65.8% NO; 32.4% YES)

Proposition 1B would have required the state to make $9.3 billion in supplemental payments to K-14 education over approximately five to six years beginning in 2011-12. This funding was intended to address uncertainty about what the Proposition 98 school funding guarantee requires. Proposition 1B was tied to passage of Proposition 1A. (62.5% NO; 37.5% YES)

Proposition 1C would have changed state lottery operations intended to increase its profitability and allowed the state to issue $5 billion in bonds that are "securitized" by future lottery profits. The lottery would no longer be a source of revenue for education, and the state General Fund would be required to make up for the loss to education of lottery funds.. (64.6% NO; 35.4% YES)

Proposition 1D would have redirected tobacco tax funds reserved for First 5 early childhood programs by Proposition 10 (passed in 1998) to the state General Fund. $608 million would have been diverted in 2009-10 and $268 million a year for the following four years, creating what critics called an "illusion" that more revenues are available. Proponents charged that Prop 1D would raid these funds in the short term in order to pay for some services, while taking funding away from other services. (65.7% NO; 33.4% YES)

For the next two years, Proposition 1E would have redirected about $230 million a year from the Mental Health Services Act (Proposition 63 of 2004) to the state General Fund to replace state funding for an existing screening, diagnosis and treatment program. As with Prop 1D, critics charged it would raid existing programs to create temporary savings, but make less money available for some services. (66.4% NO; 33.6% YES)

Proposition 1F was the only measure to win approval. It prevents elected members of the Legislature and statewide constitutional officers, including the Governor, from receiving pay raises in years when the state is running a deficit. Prop 1F directs the Director of Finance to determine whether a given year is a deficit year and prevents the Citizens Compensation Commission from increasing elected officials' salaries in years when the state Special Fund for Economic Uncertainties is in the negative by an amount equal to or greater than one percent of the General Fund. (73.9% YES; 26.1% NO)

The most contentious of the propositions was 1A, which was supported primarily by the California Teachers Association but stalwartly opposed by the California Faculty Association, the union that represents the 23,000 faculty in the California State University system. "The Governor and the legislature must develop budget solutions that put California on a real path to fiscal stability and stop sending voters flawed proposals that won't work," said Lillian Taiz, President, California Faculty Association.

Other unions throughout the state were likewise opposed to the budget package. "Tonight's results sent a message from the people of California that the Governor and the legislature must stop passing the buck and do the job they were elected to do. It's time for the governor and legislative leadership to put the same level of enthusiasm and effort into finding real solutions for California's budget problems as they did trying to convince voters to vote for a flawed and confusing Prop. 1A," said Willie L. Pelote, Sr., Assistant Director, Political Action Department, AFSCME International.

Marty Hittelman, President, California Federation of Teachers added, "Now that these flawed and unworkable reform proposals have been voted down, the governor and legislative leaders must put aside the campaign rhetoric and work to craft real budget solutions with adequate revenue to solve our problems and put California back on track."

According to the Public Policy Institute of California, for residents and likely voters, dissatisfaction with the state of their state was not limited to this election. They are pessimistic about the California economy, give the governor and legislature approval ratings that hover near record lows, and show less trust in state government than they have ever indicated in a PPIC Statewide Survey. For example, just 16 percent of likely voters say they can trust the government in Sacramento to do what is right just about always (2%) or most (14%) of the time. Among Californians overall, 23 percent hold this view (4% always, 19% most of the time).

This contrasts sharply with Californians´ views of the country as a whole. For the first time since the PPIC Statewide Survey began asking the question in 2003, most Californians (57%) and likely voters (52%) say things in the United States are generally going in the right direction. Even in January, just as President Obama was taking office, only about a third (32% Californians, 31% likely voters) said the country was headed in the right direction.

The Governor is expected to meet with state legislators this week to hammer out new solutions to the state´s budget crisis. Proposals include working to eliminate the state´s two-thirds majority rule required to pass a budget.