The 17-month budget agreement that the Governor signed into law includes as an integral part a special election on May 19, 2009. This election will give Californians the chance to decide several important issues before the beginning of the next fiscal year. The statewide ballot will include the six measures that the Legislature passed as part of the negotiated budget agreement; an additional measure was scheduled to be included, but was pushed back to the June 2010 election.
The six measures agreed to as part of the budget compromise are:
• Proposition 1A – Creates a new, larger rainy day fund, extends certain tax increases and puts new limits on state spending growth. If this measure is approved, several tax increases passed as part of the February 2009 budget package would be extended by one to two years. State tax revenues would increase by about $16 billion from 2010-11 through 2012-13.
• Proposition 1B – Alters repayment schedule for Proposition 98 funds arguably owed by the state to K-14 districts, totaling $9.3 billion.
• Proposition 1C – Allows state to borrow money for the General Fund, securitized by future revenue from the California Lottery.
• Proposition 1D – For five years, shifts between half and two-thirds of cigarette taxes away from the First 5 Program (Proposition 10) and into the General Fund.
• Proposition 1E – Amends the Mental Health Services Act (Proposition 63) to shift revenue funds from local programs to the benefit of the state General Fund.
• Proposition 1F – Forbids the California Citizens Compensation Commission from raising legislators' and state officers' salaries when the state is running a deficit.
The six negotiated measures are closely tied to the budget agreement. Some of them, Propositions 1C, 1D, and 1E, provide money directly to the General Fund. Proposition 1A was a long-standing demand from both Republican caucuses for any type of budget agreement that included taxes; also, if this measure fails, the duration of the budget's tax hikes (personal income tax, sales and use tax, and vehicle license fee) is shortened to two years. Proposition 1B heads off legal and political challenges from the education community.
The CSAC Board of Directors took no position on the Propositions at its March 19, 2009 meeting. The Legislation Committee discussed the Propositions at its April 6 meeting; the Committee made no recommendation on the Propositions and requested they be forwarded to the Board for its consideration.
The Contra Costa County Mental Health Commission voted unanimously at its March 26, 2009 meeting to oppose Proposition 1E and requested that the Board of Supervisors take a similar position.
Attached is the CSAC staff analysis of the Propositions and the recommendation from the Executive Committee to the Board to take a position of "neutral" on the package of measures. Also attached is the list of Supporters and Opponents to the Propositions, as well as a copy of the letter from the Mental Health Commission.