We received this response from Loren Kaye, the President of the California Foundation for Commerce and Education (the CalChamber’s policy organization) — in response to the Claremont Institute’s analysis of Propositions 1A-1F. Claremont rated the measures poorly — the CalChamber supports them. Kaye’s points are below, responding the the Claremont post here.
The Claremont Institute embarrassed itself today by associating its name with a pseudo-analysis of the May ballot measures. The analyst, Tom Karako, used a hackneyed PR device – Letter Grades! – to dress up what otherwise was careless analysis and warmed-over rhetoric.
Once again, critics of Proposition 1A should actually take the time to read it. Mr. Karako impugns the rainy day reserve by suggesting that “growing this kitty (the reserve) would still depend upon the fiscal discipline of future governors and legislators.” Wrong. The amount deposited into, remaining in, and eligible for withdrawal from the reserve is entirely dependent on outside, independently-determined economic conditions that drive state revenue, inflation and population. Fiscal actions by the Legislature will simply have no bearing on the size of the reserve and how fast it can be filled. The Governor cannot suspend it or “raid it” except when revenues fall below the level dictated by the Constitution. A simple reading of the measure would demonstrate that Mr. Karako’s statement is false.
Mr. Karako also states that the budget reform measure “does not restrict increases in either revenue or spending.” Maybe he was talking about Nevada, because it certainly does restrict future revenue increases in California by prohibiting the Legislature from using tax revenues that exceed a limit based on the historic ten-year trend in revenues. These “unanticipated revenues” get deposited in the reserve.
Remember, government hasn‘t grown in California from tax increases – it’s because one-time revenue windfalls have been spent for ongoing programs. Proposition 1A will cut off this source of revenues, and prevent future deficits.
Mr. Karako also complains that the budget process is thereby made more difficult for legislators, removing some of their responsibilities. Congratulations; that’s the point. If he wants to give the Legislature more spending responsibility, we’ll just wind up in the same place we’re at today.
His complaint about Proposition 1B is that it is “complicated and convoluted.” For that, you can thank Proposition 98, which constructed the arcane school finance guarantee in the first place. This measure in fact clarifies what would be a highly contentious issue over constitutional interpretation – just the job the Legislature should do in these cases. Instead of a court battle over how much money K-14 education deserves, this measure puts schools on a payment plan that actually saves money in the short term.
Propositions 1A and 1B deserve careful analysis about their long-term impacts, which the nonpartisan Legislative Analyst has provided in the ballot pamphlet. This Claremont Institute paper is not worthy of the institution.
Loren Kaye
President
April 9th, 2009 at 12:00 am
If Mr. Kaye thinks that letter grades are hackneyed then he really will not like the May 19th election where voters will vote YES or NO. After all the careful analysis is done there are only these choices available. As much as the Democrats and Republicans may have intended to write a good spending cap it is not worth the economic hit to Californians with the extended tax increases.