ARGUMENT IN FAVOR OF Proposition 56

It's time for real budget reform that holds legislators accountable.

Year after year, under Democratic and Republican governors alike, we have experienced late budgets and huge deficits.

Year after year, the Legislature bickers and postures over the state budget.

Why do they get away with it? Because LEGISLATORS FACE NO CONSEQUENCES FOR LATE BUDGETS AND IRRESPONSIBLE DEFICITS:

• Despite having almost six months to pass a budget, the Legislature has missed the Constitutional deadline every year since 1986.
• California's credit rating has been lowered to near junk bond status - "the lowest of any state.
• Huge deficits threaten drastic cuts in education, health care and public safety - "and they also have been responsible for the state's biggest tax increases.

PROPOSITION 56 - THE BUDGET ACCOUNTABILITY ACT - MAKES LEGISLATORS RESPONSIBLE FOR THEIR BUDGET ACTIONS.

56 is real budget reform that gives voters the tools they need to hold their legislators accountable. PROPOSITION 56 ENDS LATE BUDGETS. 56 says legislators will face real consequences when the budget is late:

• It requires the Legislature to stay in session and not go on vacation until they pass the budget.
• It says legislators will forfeit their pay and expenses for each day the budget is late. No budget... no pay.

PROPOSITION 56 REDUCES PARTISAN GRIDLOCK.

• 56 reduces the vote requirement on the budget and related taxes from two-thirds to 55% so small groups of partisan legislators can't hold the budget hostage and block compromise.

Legislature to censure members who threaten or punish other legislators for their budget vote.

PROPOSITION 56 MAKES LEGISLATORS ACCOUNTABLE TO VOTERS.

• 56 requires future Official Voter Information Guides to contain a two-page summary of the budget including an Internet site so voters can see EVERY VOTE cast by legislators on the budget and related taxes.
• LEGISLATORS WILL FACE THE CONSEQUENCES AT ELECTION TIME if they fail to act responsibly on the budget and taxes.

PROPOSITION 56 HELPS PREVENT OVERSPENDING IN GOOD TIMES AND BUDGET DEFICITS WHEN TIMES ARE BAD.

• 56 helps avoid future deficits by creating a "rainy day fund." For the first time, it would require funds to be set aside when the economy is strong to help prevent deficits when the economy is weak.
• In good times, at least 25% of surplus revenues must be deposited in the reserve. This money can only be spent to help maintain existing services in deficit years or for emergencies such as major fires or earthquakes.
• The reserve cannot be used to increase spending.

After 17 years of late budgets, papered-over deficits and a sinking bond rating, we need to end the gridlock, create a budget reserve and give voters information to hold their legislators accountable at election time.

Proposition 56 makes legislators accountable for their actions on the budget.

VOTE YES ON PROPOSITION 56.

HELEN RUSS, President
California AARP

DAN TERRY, President
California Professional Firefighters

CARLA NIÑO, President
California State PTA

ARGUMENT AGAINST Proposition 56

The real purpose of Proposition 56 is to change the State Constitution to make it easier for the Legislature to increase taxes.

If Prop. 56 passes, that's exactly what we'll get: HIGHER TAXES.

• Higher sales and income taxes.
• Higher car and gas taxes.
• Higher taxes on seniors and families.
• Higher parcel taxes on homeowner property tax bills.
• Higher taxes on small businesses and employers.

There's no question that we need to do something to hold Sacramento politicians more accountable. But Prop. 56 is NOT that something. It has a few good provisions, but we don't get to pick and choose. It's a package deal, a package that will make Sacramento less, not more, accountable.

Taxpayer groups call this deceptive measure the BLANK CHECK PROPOSITION. With one hand, Prop. 56 pretends to hold state politicians accountable for delivering a responsible budget. But with the other hand it slips those same politicians an open-ended blank check to increase taxes, year after year.

That's not responsible budget reform. That's an invitation to pass an irresponsible budget on time by simply increasing any and all taxes.

Here's how the Blank Check Proposition would work:

Currently, the State Constitution requires a 2/3 vote in the Legislature before they can increase our state taxes. That 2/3 protection is one of the few safeguards we have against unjustified tax hikes. It's a protection California voters put into the State Constitution with Prop. 13. A 2/3 legislative vote requires bipartisan consensus - checks and balances. It's a vote threshold that says: We understand that sometimes taxes must be increased, but BEFORE you do that: Make sure you've got bipartisan consensus. Make sure you've cut government waste. Make sure that tax hike is absolutely necessary.

Buried in Prop. 56 is a new constitutional provision [Section 12(f )(1)] that would throw that 2/3 legislative vote protection right out the window. With it goes any need for bipartisan consensus or strong justification before Sacramento politicians can increase our taxes.

If Prop. 56 passes, the Legislature will have a much freer hand to:

• Increase car taxes (which were already increased 300% last year).
• Increase gas taxes (without even using the revenue for transportation).
• Add new and higher parcel taxes to homeowner property tax bills (they've already approved increases on some homeowners).
• Increase income taxes and sales taxes (which are already among the highest in the nation).
• Add tax surcharges onto everything from diapers to beer (just like they proposed in the last legislative session).
• Slap more taxes on small businesses and employers (which will only drive more businesses out of business and out of state, and more people onto the unemployment line).

PROP. 56 POSES ONE FUNDAMENTAL QUESTION TO VOTERS:

Do we want to make it EASIER for the politicians in Sacramento to INCREASE OUR TAXES?

Do we?

Join us in sending a strong message to Sacramento. Tell them NO MORE BLANK CHECKS. Tell them to CUT THE WASTE and start spending our hard-earned tax dollars more wisely.

VOTE NO on 56.

LARRY MCCARTHY, President
California Taxpayers' Association

ALLAN ZAREMBERG, President
California Chamber of Commerce

DAVID HERMAN, Executive Director
The Seniors Coalition