Local News

Tuesday, May 19 2009 08:24 PM

Voters reject budget propositions

By JUDY LIN, Associated Press Writer

California voters on Tuesday rejected the slate of budget propositions presented by Gov. Arnold Schwarzenegger and state lawmakers, tossing aside warnings of impending financial doom.

The overwhelming defeat of the special election package will worsen an already dire fiscal crisis in the nation’s most populous state. Earlier this year, the governor and lawmakers cut spending by $15 billion and raised sales, income and vehicle taxes by more than $12 billion, but those moves proved insufficient against the rapid decline in the state’s economy.

Plunging tax revenue caused the deficit to re-emerge. It is now projected to hit $21.3 billion in the fiscal year that begins in July, nearly a quarter of the governor’s proposed general fund spending.

Last week, the governor said he will consider shortening the school year by seven days, laying off up to 5,000 state employees and taking money from local governments, which likely would translate into cuts for police and firefighting services.

Tens of thousands of teachers also face the prospect of layoffs.

The ballot slate included a mix of reforms, higher taxes, borrowing and funding shifts. Voters approved one of the six propositions, a measure prohibiting pay raises for lawmakers and other state elected officials during deficit years.

It also included a race for the Southern California congressional race that opened when former Rep. Hilda Solis was named U.S. labor secretary. Former state Assemblywoman Judy Chu was leading fellow Democrat Gil Cedillo and 10 other candidates in that race with 42 percent of the vote late Tuesday. A candidate had to top 50 percent to win.

Democratic state Assemblyman Curren Price won an open Los Angeles-area state Senate race.

The election results marked the second time Schwarzenegger had been repudiated in a special election. Four years ago, voters rejected all four of the measures he described as government reform.

“Tonight we have heard from the voters and I respect the will of the people who are frustrated with the dysfunction in our budget system,” he said in a statement. “Now we must move forward from this point to begin to address our fiscal crisis with constructive solutions.”

He and legislative leaders were scheduled to meet Wednesday to begin discussing their options.
Schwarzenegger and lawmakers called the special election in February as part of a plan to solve a $42 billion deficit that had been projected through mid-2010.

Despite the doomsday predictions, California voters largely tuned out. Only 14 percent, or about 2.4 million, of Californians who vote by mail had cast their ballots before election day, according to tallies reported by the California Association of Clerks and Election Officials.

“This is a statewide election in May. We’ve never had one before,” said Joe Holland, Santa Barbara County registrar of voters. “I think in general people were not interested in voting in this election. It didn’t generate a lot of excitement.”

Sentiment at polling stations throughout the state was a mix of anger toward politicians and resignation that the state would continue to face financial turmoil no matter the outcome of Tuesday’s vote.

“I am extremely disappointed with the Democratic leadership on the state level,” said Tim Green, 48, a San Francisco resident who voted against every measure. “This is one giant scam.”

The centerpiece measure on Tuesday’s ballot was Proposition 1A, which would have created a state spending cap and strengthened the state’s rainy day fund. Had it passed, it would have triggered a continuation of the tax hikes for an extra one or two years.

It generated the most opposition, uniting anti-tax groups and state employee unions that typically are odds with each other.

“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,” Lillian Taiz, president of the California Faculty Association, said in a statement.

Employee unions oppose the idea of a spending cap, saying it would unnecessarily restrict the state’s options in years when the treasury is flush with cash.

Schwarzenegger had argued that a strict spending cap combined with a robust rainy day fund would help smooth out the state’s finances and prevent deep deficits and spending cuts when times are tough.

Proposition 1B would have restored more than $9 billion for education funding but would have taken effect only if 1A passed.

The measure most critical to the current shortfall was Proposition 1C, which would have authorized the state to borrow $5 billion and repay it — with interest — with future revenue from the state lottery.

Propositions 1D and 1E sought to borrow from child development and mental health programs, injecting about $900 million into the state’s general fund had they passed.

Most of the measures were losing by wide margins, with at least 60 percent of voters rejecting them, according to early returns.

Associated Press Writers Kevin Freking in Washington, D.C., Don Thompson in Sacramento, Paul Elias in San Francisco, and Shaya Tayefe Mohajer and Jacob Adelman In Los Angeles contributed to this report.


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