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Tuesday's election is more important than you may think. It's not just the Democratic Primary (I'm voting for Edwards) or State Assembly seats (I'm voting for Bass), but a series of propositions which will have long-term effects on our state.

What? You didn't receive the Official Voter Information Guide? Then you're not registered to vote. Go here.

Here's the quick run-down on my recommendations. Explanations follow.

YES:

Prop 56 - State Budget, Related Taxes, and Reserve. Voting Requirements. Penalties. Initiative Constitutional Amendment and Statute

NO:

Prop 58 - The California Balanced Budget Act

YES:

Prop 55 – Kindergarten-University Public Education Facilities Bond Act of 2004

NO:

Prop 57 - The Economic Recovery Bond Act

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Prop 56: looking back at the recall election, making government work

By the summer of 2003, the recall campaign was underway, with Congressman Darrell Issa injecting a couple million dollars of his own fortune into the gathering of signatures. Republicans in the California legislature decided to use the budget as a weapon against the just-elected Democratic governor. As the budget standoff grew into a full-blown crisis, electorate anger against Sacramento mounted and the recall campaign was successful. This use of the budget as political weapon must be stopped.

Prop 56 will deny legislators and the governor their salaries for every day that the budget is late; they will not be able to recover their lost wages, either. Legislators have shown us that they are all too willing to jeopardize the smooth operations of the state and the paychecks of government employees for political gain (22 out of the last 28 years, according to the Sacramento Bee). How willing will they be when their own salaries are at stake? If Prop 56 passes, we'll see the politicians buckle down and get some work done.

Prop 56 will also lower the vote requirements in the legislature from two-thirds to 55%. The two-thirds requirements are an anomaly among states. In California, no other everyday vote requires this kind of supermajority. Our current system lets a minority of one-third plus one hold up the business of the state. Prop 56 will put an end to the tyranny of the minority.

Prop 56 will give voters more information about the budget and the way their representatives voted. This is crucial to our representative democracy. Ultimately, the responsibility for our common government lies in the hands of the people. We cannot be expected to speak out for every clause of every piece of legislationthat's why we pay our elected representatives. However, we must have as much information available as possible, so that we may make informed evaluations of our representatives when the time comes.

Prop 56 will fix California's structural problems and help the state get back to the business of being number one.

Vote YES.

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Prop 58: sounds like a good idea, but is it really?

California (like 90% of all states) is in crisis. Structural budget deficits that have been papered over by bond issues have contributed to the state having one of the lowest bond ratings in the nation. How did this happen? Deficits occur when expenditures exceed revenues. The governor says that California has a spending problem. Yet per capita spending (in real dollars) is near historic lows. The problem is revenue, and Prop 58 doesn't deal with that problem.

Here's the source of the revenue problem: 1) loss of capital gains as a result of the tech-bubble and stock market bust, 2) cuts in marginal tax rates during the boom years, 3) loss of income tax due to changes in federal tax rates, resulting in lower taxable incomes, and 4) restrictions on property tax growth, out of line with the growth in population and inflation. So you can blame Wall Street and the business cycle, blame the short-sighted legislature, blame the Bush administration, and blame Prop 13. Spending, however, is not on this list.

Will Prop 58 make it easier for the state to increase revenues? No. Will Prop 58 further restrict the legislature in its ability to make sound fiscal decisions? Yes. Is the legislature already overly restricted? Yes. With all the voter initiatives we've passed in the last 15 years, along with the requirements of debt service, 70% of the general fund is untouchable. By law, a certain percentage of the general fund must go to education, to roads, etc. This leaves only a small percentage for the legislature to work with, and that doesn't make any sense. The needs of the state will vary from year to year. When the economy and employment is up, the state doesn't need to spend as much on job training, unemployment, Medicaid, etc. When vacancy rates are at 6% and property values are down, investments in affordable housing are less critical. Budget decisions should be made based on present and future needs and strengths. A balanced budget restriction would hamper the ability of the legislature to govern.

Finally, Prop 58 gives the governor new powers: "Allows the Governor to proclaim a fiscal emergency in specified circumstances, and submit proposed legislation to address the fiscal emergency." I don't know about you, but putting that much power in the hands of a single person doesn't sound like a good idea to me.

Vote NO.

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Prop 55 vs. Prop 57

One of the most powerful tools that government entities have is the ability to issue bonds. This is essentially a loan from the capital markets, to be paid back with interest over a number of years. Bonds can be paid from the general fund, or from special assessments, and are essentially backed by the fiscal soundness of most government entities. Since the state is not likely to declare bankruptcy, and has the power to increase revenues if necessary, investors like bonds. Of course, if a government entity borrows too much money, that starts to make investors nervous. Especially if budget projections show a future filled with deficits (sound familiar?). In order to borrow money under these circumstances, bond issuers have to pay higher interest rates to offset the risks. Therefore, bonds should be issued with care. The most important thing to look at in any bond measure is a) what the money will be used for, and b) how the bond will be repaid.

In the case of Prop 55 and Prop 57, the bond will be repaid out of the general fund. In other words, these bonds will put a further burden on the budget. That makes me nervous, for obvious reasons, and makes me inclined to reject both measures.

But Prop 55 will go toward the building and repair of facilities for schools throughout our education system. I believe that investments in education pay for themselves in the long run (why else would so many people go to college and grad school?). If California is to remain a leader in cutting edge technology and business, we need to lay the groundwork for an educated workforce. Furthermore, all the proposed construction will pump money into the economy, raising demand for goods and services, and creating a short-term revenue benefit until the business cycle moves back up again. In light of these two benefits, I think Prop 55 will be a good thing.

In contrast, Prop 57 borrows money to pay off previously borrowed money and fill the deficit gap. This is not an investment. This is a credit card balance transfer on the largest of scales. Sure, for individuals with debt problems, this can be a good idea. But imagine these same individuals as part-time workers who have the ability and opportunity to work full-time and refuse to do so. At the same time, they keep going out and buying booze and alcohol every night. Here we have a state that does things like cut marginal rates on the top 2% of incomes in California (whatever you may think, this isn't you) and put people in jail at a cost of $33,000 a year for a misdemeanor (stealing $100 worth of videotapes, for instance). It's irresponsible, and letting the state borrow money to deal with this shortcoming is irresponsible. Debt payment on this bond will only take away money from other necessary services for decades.

Vote YES on Prop 55. It's an education loan.

Vote NO on Prop 57. It's a credit card balance transfer for your lazy, boozing uncle John.

Update 2004-03-02 12:04

I'm voting for Dean.