Pros, cons of Prop. 56: Budget process |

Pros, cons of Prop. 56: Budget process

Prepared by the League of Women Voters of California

This is the second of four pro/con looks at statewide propositions on the March 2 California election ballot, prepared by the League of Women Voters of California. Voters are urged to save each of them to refer to when voting. (A Spanish-language version can be found online at

State budget, related taxes, and reserve. Voting requirements. Penalties

The question

Should the state Constitution and certain statutes be amended to allow the state Legislature to pass the state budget and budget-related tax and appropriation bills with a 55 percent vote, and to make other changes to the budget process?

The situation

The state budget bill provides the annual funding for most state government programs. It must be passed by a two-thirds vote (67 percent) of each house of the Legislature before being sent to the governor for approval. The state Constitution requires that the Legislature pass the budget bill by June 15, but this deadline has often not been met.

The Constitution also requires a two-thirds vote of each house of the Legislature to pass bills that increase taxes. Other types of bills can pass with a majority vote (over 50 percent).

The budget typically sets aside money in a reserve for unexpected events, such as revenue shortfalls or emergencies. Each year the Legislature and the Governor can choose the amount of money to be put into this fund.

The proposal

Proposition 56 would amend both the state Constitution and certain statutes to change the state budget process.

The measure lowers the number of votes required to pass the budget bill and other bills related to it, including tax increase measures, from two-thirds (67 percent) to 55 percent.

The measure requires that at least 25 percent of excess revenues (the amount by which state revenues exceed what is needed for “current service levels”) be put into the reserve fund until the reserve reaches 5 percent of prior-year spending. Use of the remaining excess revenues is not restricted. Reserve funds could be spent only in cases of an emergency or in years in which spending on current service levels is greater than available revenues.

Proposition 56 prohibits the Legislature and the governor from collecting their salaries and expenses when the budget is late. In addition, the Legislature would have to stay in session until the budget is approved.

The measure also requires that a budget summary be included in the state ballot pamphlet with directions to an Internet Web site showing voting records of legislators on budget-related bills.

Fiscal effect

The fiscal impacts of this measure would vary and would depend primarily on the composition and actions of future Legislatures. There could be changes in spending and potentially significant changes in state tax revenues in some years.

Yes or no vote means …

A YES vote means the Legislature could pass the state budget and budget-related bills with a 55 percent vote, and other changes in the state budget process would also be made.

A NO vote means the state budget process would not be changed.

Supporters say …

– Proposition 56 will end the pattern of late budgets and irresponsible deficits. The Legislature has not passed a budget by the constitutional deadline since 1986.

– This measure holds legislators accountable by requiring them to pass the budget on time or face real consequences. They will have to stay in session and work only on the budget, and forfeit their salary and expenses until the job is done.

– Only two other states routinely require a two-thirds vote to pass a budget. This high threshold has given a handful of California legislators the ability to block compromise and demand concessions in return for their support for a budget.

– Prop. 56 helps avoid future deficits by building up a “rainy day” reserve fund when revenues are greater than needed to fund existing services.

– Deficits and late budgets hurt the state’s credit rating. They force cuts to important programs as well as big tax increases.

Opponents say …

– This measure will make it easier for the legislature to increase our state taxes. Prop. 56 pretends to discipline Sacramento politicians, but it actually rewards them with an open-ended “blank check.”

– The two-thirds vote requirement forces bipartisan consensus and strong justification before politicians can raise taxes.

– California’s fiscal problems are not the result of the difficulty of achieving a two-thirds vote on budget and appropriation bills, but rather its failure to produce prioritized, balanced budgets and to pay attention to the state’s economy and competitive position.

– Californians pay $130 billion in state and local taxes every year. This is more than enough to fund California’s needs if our tax dollars were properly managed and budgeted.

– Spending is out of control. The best way to resolve the state’s chronic budget problems is to cut wasteful spending and increase state revenues by stimulating economic growth, NOT by raising taxes.

For more information:

Supporters: Yes on Prop 56, 916-443-7817,

Opponents: Californians Against Higher Taxes – No on 56, 310-996-2678,

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