Can a New Constitution Fix California?
The New Movement to Call a Constitutional Convention and Why
Sep 27, 2009
California is hurting under the current recession. When the legislature finally agreed on a budget in late July, they were forced to make up a $26 billion deficit entirely through spending cuts. According to the Legislative Analyst’s Office, California will cut $8.5 billion from education, $2.3 billion from health care, and $1 billion from social services.
While California is not the only state suffering from the financial crisis, the state’s response to the crisis – or lack thereof – revealed the structural limitations of the state government. Today, California’s ineffective government is exacerbating the economic crisis.
Proposition 13 Limits Revenue and Inhibits Tax Increases
In 1978, California voters approved Proposition 13, capping property taxes at 1% of the value of the property. This permanently slashed revenues for local governments and school districts, forcing them to turn to Sacramento for funding.
Proposition 13 also stunted state revenues by requiring that tax increases or new taxes be approved by two thirds of the state legislature. Because neither party has a two thirds majority (the Democrats in recent years have been quite close to the two thirds marker), the minority party can essentially veto the majority’s decision to raise taxes, thus limiting another source of funding for state and local governments.
Proposition 13, therefore, severely limited local and state revenues, while making it difficult to raise taxes during hard times. Today, while the recession has caused a drop in state revenue, Proposition 13 limits the state’s ability to raise the funds necessary to continue to provide essential services and keep the budget out of the red.
The California Constitution and the Structural Challenges to Good Government
Proposition 13 is not the only structural challenge facing California. The state constitution also places limits on lawmakers ability to effectively govern.
The state constitution has been revised over 500 times due to the proposition system, whereby voters can add initiatives and constitutional amendments to the ballot, then approve them by popular vote. While the system dates to the progressive era at the beginning of the 20th century, today, this process has placed budgetary restrictions on the legislature by mandating funding in some areas while limiting revenue-raising options overall. The result is that the legislature has relatively little control over the state budget, compromising its ability to prioritize state spending. This is known as “ballot-box budgeting.”
California’s Two-Thirds Requirement for Passing a State Budget
One of the most debilitating and therefore controversial aspects of the California Constitution is the requirement that state budget be approved by a two-thirds majority in the legislature. The result is that only eight of the last 30 budgets have been passed on time. The two parties fight over the budget, with the minority party given disproportionate sway over the final budget. California paid its bills with IOUs for two months in the summer of 2009, while the legislature fought over how to balance the budget.
Similar to the two-thirds requirement under Proposition 13, the two-thirds budget requirement has frustrated the Democrats in the majority, who prefer to raise taxes rather than cut expenditures to balance the budget. In 2004, voters passed Proposition 58, mandating that the legislature balance the budget each year.
Groups Are Calling for a Constitutional Convention
Considering not only the current recession, but also this long history of debilitating governance, many are increasingly convinced that a new constitution is the only way to return sanity to the state of California.
The moderate group, Repair California, aims to put two propositions on the November, 2010 ballot: Proposition 1 to allow the people to call a state constitutional convention, and Proposition 2 to call the convention. According to their time-line, a convention would be held in 2011, and a new constitution would be on the 2012 ballot.
In order to build support for a convention, Repair California proposes to restructure government – including the initiative process and the two-thirds budget requirement – without changing Proposition 13’s requirement for raising taxes. By skirting this controversial issue, Repair California has won the support of some liberals and conservatives, including Republican Governor Schwarzenegger.
Can a New Constitution Save California?
In 1787, delegates from the 13 states of the union met in Philadelphia to revise the Articles of the Confederation. The Articles failed chiefly because they did not grant the federal government the power to tax. The result was the U.S. Constitution.
With California in a crisis, it is debatable whether a new constitution with limited taxing powers will return the Golden State to its Golden Era. Californians will be debating this and many related issues in the coming months and years, as the state attempts to become governable once again.
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