We are still one month from the May 19th Special Election, but it’s safe to say that Prop. 1A is doomed to defeat, barring an unforeseen miracle in electioneering.
Prop. 1A is essentially a spending cap disguised as an increase in the state’s rainy day fund. It is intended to help ease future budget crises by placing a limit on state spending, based on two complicated formulas, and requires revenues in excess of that limit to be placed in a rainy day fund. Prop. 1A also extends the tax increases adopted as part of the 2009-10 budget package by one to two years, which would lead to tax increases of roughly $16 billion.
The Governor and other proponents of the measure, such as the California Chamber of Commerce and California Taxpayers’ Association, have raised nearly $4 million to support Prop. 1A and the package of other measures on the May 19 special election ballot.
But recent polling shows Prop. 1A to be in serious trouble.
There is a consensus among campaign strategists that ballot measures must be polling at above 50% in the months leading up to the election in order to pass. In general, measures need to be polling in the high 50s to have any chance of passage. The usual strategy for proponents is to control the rate of descent of voter approval for the measure through the election because the normal trend is for things to tighten up closer to election day.
A Field Poll conducted at the end of February found that Prop. 1A had the support of 57% of respondents, while 20% were opposed. However, the Field Poll omitted the fact that the measure included an extension of the tax increases. The Los Angeles Times reported that when respondents were told about the tax increases, support dropped from 57% to 34% of likely voters.
Election experts state that private polls taken in March also show the measure going down by a wide margin.
A recent poll by the Public Policy Institute (PPIC), which was conducted in mid-March and told people about the tax increases, found the measure to be opposed by 46% of likely voters and supported by only 39% of likely voters. These poll results suggest that voters are likely to turn against the measure as they become aware of the increase in taxes associated with the measure.
The measure was opposed from the beginning by many anti-tax groups such as the Howard Jarvis Taxpayers Association and Republican activists who were opposed to the tax increases included in the measure. This week a coalition of labor unions anted up $300,000 to fund a coalition to oppose the spending cap portion of the measure. It is not yet clear how much additional money these groups will spend to defeat 1A, especially given the fact that polling shows the measure going down without a truly organized opposition.
A closer examination reveals that Prop. 1A was doomed from the beginning because it was poorly constructed. In a nutshell, the inclusion of the tax extensions served as a “poison pill” that has alienated Republican voters who were otherwise likely to support the measure.
Prop. 1A was placed on the ballot by the Legislature as part of the February budget deal to close the $42 billion budget shortfall that was projected for 2008-09 and 2009-10. The measure would replace a prior state spending cap that was negotiated last fall as part of the 2008-09 budget deal and set to appear on a future ballot for voter approval.
To try to minimize the opposition to Prop. 1A, the Governor negotiated a deal with the California Teachers Association (CTA) to place a companion measure on the ballot, Proposition 1B. Prop. 1B would provide schools with $9.3 billion in payments if voters approve both Prop. 1A and Prop. 1B. This had the effect of ensuring that the state’s most well-funded union would support, rather than oppose Prop. 1A. In a 2005 special election, CTA led the charge to defeat the Governor’s attempt to pass a spending cap and several other measures in the 2005 special election.
It has been widely noted in the media that the Governor intended to discourage unions and other budget advocates from spending a lot of money to oppose the measure by having it extend the tax increases adopted as part of the 2009-10 budget package by one to two years to raise $16 billion.
Prop. 1A would extend the 1 cent sales tax increase by one year, from 2010-11 to 2011-12, and would extend the increase in the vehicle license fee from 0.65 percent to 1.15 percent for two additional years, from 2010-11 through 2012-13. The increase in the top income tax bracket from 9.3 to 9.55 percent would also be extended for two additional years, through the 2012 tax year.
The inclusion of the tax extensions helped galvanize the opposition of anti-tax groups and Republicans who were angry at the Governor and Legislature for including tax increases as part of the budget deal. These constituencies would normally be expected to support a state spending cap. However, many of these groups such as the Howard Jarvis Taxpayers Association say “we don’t refer to it as a spending cap…we refer to it as phony budget reform,” according to the San Francisco Chronicle.
The recent PPIC poll, which informed voters of the $16 billion in tax increases attached to Prop. 1A, found that support for Prop. 1A was much lower among likely Republican voters when compared to Democrats. Likely Democratic voters were found to support the measure 49% yes to 38% no. The trend was reversed for likely Republican voters, with 58% of likely Republican voters saying they would vote against Prop. 1A if the election were held today and only 26% saying they would support the measure.
The Governor’s prior attempt to put a state spending limit before voters in the November 2005 special election, Prop. 76, failed 37.6% to 62.4%. But the interesting thing is that a PPIC poll taken two weeks before the election shows that the measure was supported by 56% of likely Republican voters and opposed by 33%. Likely Democrat voters were overwhelmingly opposed to Prop. 76 with only 10% in support and 81% opposed.
To make matters worse for Prop. 1A proponents, the inclusion of the tax extensions did not discourage opposition to the measure. Opposition was relatively slow to materialize but the measure is now opposed by a coalition of several of the state’s most influential unions including the Service Employees International Union (SEIU), the American Federation of State, County and Municipal Employees (AFSCME), the California Faculty Association, and the California Federation of Teachers.
The spending cap may have stood a fair chance of passage without the inclusion of the tax extensions and without a funded opposition but it’s too late for that now.