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California Proposition 76, Cap on Growth of State Budget Initiative (2005)

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California Proposition 76
Flag of California.png
Election date
November 8, 2005
Topic
State and local government budgets, spending and finance
Status
Defeatedd Defeated
Type
Constitutional amendment		Origin
Citizens

California Proposition 76 was on the ballot as an initiated constitutional amendment in California on November 8, 2005. It was defeated.

A "yes" vote supported limiting state spending to the prior year's level plus three previous years’ average revenue growth; changing state minimum funding for schools; and enacting other budgetary changes.
A "no" vote opposed limiting state spending to the prior year's level plus three previous years’ average revenue growth; changing state minimum funding for schools; and enacting other budgetary changes.


Election results

California Proposition 76

Result Votes Percentage
Yes 2,948,243 37.67%

Defeated No

4,877,735 62.33%
Results are officially certified.
Source

Measure design

Proposition 76 would have placed an expenditure limit on the state budget equal to the prior year's level plus three previous years’ average revenue growth. It also would have changed the minimum funding thresholds for public schools established by Proposition 98 (1988).[1]

Proposition 76 was one of four ballot measures on the 2005 ballot that Arnold Schwarzenegger included in his plan for the state. The other three were Proposition 74, Proposition 75 and Proposition 77. All four were defeated.


Text of measure

Ballot title

The ballot title for Proposition 76 was as follows:

“
State Spending and School Funding Limits. Initiative Constitutional Amendment.


”

Ballot summary

The ballot summary for this measure was:

“

• Limits state spending to prior year’s level plus three previous years’ average revenue growth.

• Changes state minimum school funding requirements (Proposition 98); eliminates repayment requirement when minimum funding suspended.

• Excludes appropriations above the minimum from schools’ funding base.

• Directs excess General Fund revenues, currently directed to schools/tax relief, to budget reserve, specified construction, debt repayment.

• Permits Governor, under specified circumstances, to reduce appropriations of Governor’s choosing, including employee compensation/state contracts.

• Continues prior year appropriations if state budget delayed.

• Prohibits state special funds borrowing.

• Requires payment of local government mandates.		”

Full Text

The full text of this measure is available here.

Constitutional changes

California Constitution
Articles
I • II • III • IV • V • VI • VII • VIII • IX • X • XA • XB • XI • XII • XIII • XIII A • XIII B • XIII C • XIII D • XIV • XV • XVI • XVIII • XIX • XIX A • XIX B • XIX C • XX • XXI • XXII • XXXIV • XXXV

If Proposition 76 had been approved, it would have:

Fiscal impact

See also: Fiscal impact statement

The fiscal estimate provided by the California Legislative Analyst's Office said:[1]

“
  • The provisions creating an additional state spending limit and granting the Governor new power to reduce spending in most program areas would likely reduce expenditures relative to current law. These reductions also could apply to schools and shift costs to other local governments.
  • The new spending limit could result in a smoother pattern of state expenditures over time, especially to the extent that reserves are set aside in good times and available in bad times.
  • The provisions changing school funding formulas would make school and community college funding more subject to annual decisions of state policymakers and less affected by a constitutional funding guarantee.
  • Relative to current law, the measure could result in a change in the mix of state spending—that is, some programs could receive a larger share and others a smaller share of the total budget.[2]
 ”

Support

Website banner from the Yes on Proposition 76 (archived) website

Yes on 76 led the campaign in support of Proposition 76.

Supporters

Official arguments

The official voter guide arguments in favor of Proposition 76 were signed by Governor Arnold Schwarzenegger (R); Tom Campbell, director of California Department of Finance; and Sandra L. McBrayer, former National Teacher of the Year:[1]

“

PROPOSITION 76 IS ONE OF THE CRITICAL REFORMS WE NEED TO CLEAN UP THE MESS IN SACRAMENTO! YES on Prop. 76: Control State Spending California’s budget system is broken. We have record deficits, unbalanced budgets, and out-of-control spending. The politicians can’t say 'no' to more spending. Since 1999–2000, the state has increased spending by twice as much as it has increased its revenue.

'California faces a budget crisis that needs to be resolved this year. The Governor’s reforms . . . can go a long way toward establishing and maintaining fiscal responsibility in the state.' Contra Costa Times, April 3, 2005

Budget experts project next year’s budget deficit at $6 billion and annual deficits after that of $4–$5 billion. At that pace, the State will accumulate $22 to $26 billion in deficits over the next five fiscal years. The choice is simple: Pass Prop. 76 or face higher taxes such as the car tax, income tax, sales tax, and even property taxes.

PROP. 76 IS THE BIPARTISAN SOLUTION THAT FORCES THE STATE TO LIVE WITHIN ITS MEANS:

  • Limits spending to the average rate of tax growth of the past three years, so we don’t overspend in good times followed by huge deficits in bad times.
  • Establishes “checks and balances” to encourage the Governor and Legislature to work together.

When tax revenue slows, the Legislature can cut wasteful spending to balance the budget. If the Legislature doesn’t act, the Governor can then cut wasteful spending, while protecting funding for education, public safety, and roads.

  • Stabilizes K–14 education spending. By cutting wasteful spending and balancing the budget, we’ll have more funds to spend on what the state needs, without raising taxes.
  • Stops the autopilot spending binge and holds the politicians accountable.
  • Guarantees that taxes dedicated for highways and roads are spent on those projects and never again raided to balance the budget.

Unfortunately, Opponents of Prop. 76 Don’t Want Reform:

  • They think deficits and gridlock are just fine in Sacramento.
  • They will stop at nothing to defeat Prop. 76 and have spent millions for television ads to confuse voters.
  • They use scare tactics, inaccurate statements, and outright deceit, like their claims that it will cut funds for

law enforcement. It’s not true.

'Prop. 76 requires repayment of previously borrowed funds so we can build new roads and repair existing roads and it doesn’t reduce dedicated tax spending on local law enforcement.' Alan Autry, Mayor of Fresno

'YES' on Prop. 76:

  • Balance our budget without raising taxes.
  • Promote bipartisan cooperation between the Legislature and the Governor.
  • Eliminate wasteful spending and provide more money for roads, health care, law enforcement, and other

important programs without raising taxes.

PLEASE VOTE 'YES ON PROP. 76'—TO CLEAN UP THE BUDGET MESS IN SACRAMENTO.[2]

”


Opposition

Opponents

  • Brenda J. Davis, president, California State PTA[1]
  • Henry L. "Hank" Lacayo, state president, Congress of California Seniors[1]
  • Wayne Quint, Jr., president, California Coalition of Law Enforcement Associations[1]
  • Lou Paulson, president, California Professional Firefighters[1]
  • Barbara Kerr, president, California Teachers Association[1]
  • Deborah Burger, president, California Nurses Association[1]

Official arguments

The official voter guide arguments opposing Proposition 76 were signed by Brenda J. Davis, president, California State PTA; Henry L. "Hank" Lacayo, state president, Congress of California Seniors; and Wayne Quint, Jr., president, California Coalition of Law Enforcement Associations:[1]

“

PROPOSITION 76 WILL CUT FUNDING FOR SCHOOLS, HEALTH CARE, POLICE, AND FIRE. It undermines our democratic system of checks and balances by giving the governor awesome new powers without any oversight. And it opens the door to higher taxes.

PROPOSITION 76 OVERTURNS THE MINIMUM SCHOOL FUNDING PROTECTIONS APPROVED BY CALIFORNIA VOTERS WHEN THEY PASSED PROPOSITION 98. Proposition 76 allows the Governor to permanently reduce school funding without a vote of the people.

Our students and schools lost three billion dollars when Governor Schwarzenegger broke his promise to repay the money he took from education. Proposition 76 'terminates the repayment requirement,' meaning the Governor will never have to return this money to our schools’ minimum guarantee. Proposition 76 will permanently reduce the money schools will get by over $4 billion—$600 per student. That means teacher layoffs, larger classes, fewer textbooks, less classroom materials, poorly paid teachers, and overcrowded schools. Proposition 76 keeps California behind states like West Virginia and Kentucky in per pupil education funding.

PROPOSITION 76 DEPRIVES CITIES AND COUNTIES OF HUNDREDS OF MILLIONS OF DOLLARS IN STATE FUNDING NEEDED FOR POLICE, FIRE, AND HEALTH CARE. Incredibly, if a 'fiscal emergency' is declared, this initiative requires funding be cut for vital services like education, health care, fire, and police, but actually prevents cutting 'pork barrel' road projects.

PROPOSITION 76 ATTACKS CALIFORNIA’S SYSTEM OF CHECKS AND BALANCES BY PLACING TOO MUCH POWER IN THE HANDS OF ONE PERSON— THE GOVERNOR. Even if you trust this Governor, who knows what future Governors might do with this unlimited new power. Under Proposition 76, any Governor could declare a 'fiscal emergency' simply by having his own staff overestimate state revenues. Once a fiscal emergency is declared, the Governor would be free to cut vital programs without voter approval and without oversight. Under Proposition 76, 'The Governor could exercise any whim or impose any political vendetta,' warns the Los Angeles Times, which calls Proposition 76 “a really bad idea.'

THIS INITIATIVE ALSO GIVES STATE LEGISLATORS NEW POWER TO MAKE MISCHIEF. Just 14 of 120 legislators could block passage of the budget indefinitely, putting government spending on autopilot. This could allow the Governor to declare a 'fiscal emergency,' giving the Governor sweeping new powers to make state spending and budget decisions 'at his discretion,' with absolutely no oversight or accountability.

CLAIMS THAT PROPOSITION 76 PREVENTS NEW TAXES ARE ABSOLUTELY UNTRUE. This initiative does nothing to prevent higher taxes. If it passes, the Governor and Legislature can raise car taxes, income taxes, or sales taxes without voter approval. Even the President of the California Republican Assembly says that Proposition 76 'actually encourages tax increases.'

CALIFORNIANS CAN’T AFFORD PROPOSITION 76. It will cut education, health care, fire, and police. It attacks our system of checks and balances. And it opens the door to higher taxes. Vote NO.[2]

”

Path to the ballot

See also: California signature requirements

In California, the number of signatures required for an initiated constitutional amendment is equal to 8 percent of the votes cast at the preceding gubernatorial election. For initiated amendments filed in 2005, at least 598,105 valid signatures were required. The petition drive for Proposition 76 was conducted jointly with the petition drives for Proposition 74, Proposition 75 and Proposition 77 by three different petition drive management companies.

The petition drive management companies involved were:

Altogether, the three companies were paid $7,876,472.40. Dividing this across the four propositions involved means that approximately $1,969,118.10 was spent collecting signatures on the individual propositions in the Schwarzenegger package.[3]

See also: California ballot initiative petition signature costs

See also

2005 Measures

California

News and analysis

External links

Footnotes

  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 University of California, "Voter Guide," accessed March 31, 2021
  2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  3. ↑ Cal-Access, "Proposition 76," accessed March 31, 2021
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