EPCC NEWS
May 20, 2009
Contact: Jerry Esguerra
(818) 749-0272

EPCC COMMENDS CALIFORNIA VOTERS FOR REJECTING ANTI PEOPLE BUDGET MEASURES 


Los Angeles- The Echo Park Community Coalition (EPCC) highly commends and congratulates the California voters for rejecting a package of budget-balancing measures that Governor Arnold Schwarzenegger said were needed to keep a $15 billion deficit from widening to $21 billion. Only the proposal to limit lawmaker pay passed.

Five of the propositions failed with 64 percent of the votes counted, according to California’s elections office. Despite threats from lawmakers and fear mongering that the crisis would aggravate because of the a record $42 billion budget gap, the people voted against the measures.

The losing proposals would have capped spending and extended temporary tax increases, directed future surplus money to schools, authorized bonds backed by lottery profits and diverted already dedicated revenue to the budget.

Proposition 1A, which was failing 36 percent to 64 percent, would have limited state spending to inflation plus 3 percent above a 10-year average. Revenue exceeding that cap would have been deposited in a rainy day fund that could only be spent during deficit years. Any surplus amounting to more than 12.5 percent of the general fund would have been available for one- time needs or to pay down debt. The measure also would have extended three temporary tax raises approved in February.

Proposition 1B would have required the state to pay $1.5 billion from the rainy day fund to schools for six years starting in 2011. It was failing 39 percent to 61 percent.

Proposition 1C, which would have allowed the state to sell $5 billion of bonds backed by future lottery proceeds and use the money for the budget, was losing 37 percent to 63 percent.

Proposition 1D would have allowed the state to strip $600 million over five years from a program that spends tobacco tax revenue on children’s health. It was failing by a 36 percent to 64 percent margin.

Proposition 1E would have allowed lawmakers to siphon $250 million a year from a mental health services program financed by an income-tax increase approved by voters in 2004. It was losing 35 percent to 65 percent.

Only Proposition 1F, which prohibits state lawmakers and elected officers from salary raises in years when the state is running a deficit, was winning 75 percent to 25 percent. People were angry that the budget approved in February raised $12 billion in taxes, cut $16 billion in spending and spent $8 billion of federal stimulus money. It also relied on $6 billion that would have been raised had the ballot measures won.

Schwarzenegger proposed on May 14 cutting another $6 billion in spending, half from schools and colleges, to close the new gap. He said more cuts, such as releasing 19,000 illegal immigrants now held in state prisons, would be necessary with voter rejection of the ballots measures.

Schwarzenegger has also proposed that the state borrow $6 billion of two-year cash flow warrants. He said more short-term borrowing would be needed later in the year, especially if the measures were rejected.