Prop 1A 101

What does Prop 1A do?Prop 1A is a convoluted set of new formulas and rules that would be written into our state Constitution, and it would make it even more difficult to pass a budget in California.

Prop 1A will result in massive cuts to ALL the vital public services SEIU members provide and will permanently lock in all of the deep cuts made in recent years to:
         •    Health care
         •    Home care
         •    Higher education
         •    Human services

The new rules would require massive savings even in bad years and would greatly reduce the funding available for public services. For example, according to the Department of Finance’s projections, if Prop 1A had been in place already, in 2008-09, the amount of money available for spending would have been $12 billion below the actual budgeted expenditures – which already included cuts of over $10 billion. That means that Prop 1A would have put us $22 billion below what we needed to sustain services at the workload level.

The Governor and lots of other politicians are claiming that if we don’t pass all of the initiatives on May 19, we will be facing budget “Armageddon.” Won’t our budget problem immediately get a lot worse if Prop 1A fails?Absolutely not. Prop 1A does nothing to help our current budget situation. In fact, it’s the only one of the initiatives that will actually make our budget problems worse.

It’s true that the state faces another difficult budget, but Prop 1A won’t reduce the looming deficit for the 2009-10 budget by 1 cent.

Janis Hirohama, the President of the League of Women Voters of California, a non-partisan good government watchdog, put it well. She said: “Although some claim there is an urgency to pass Prop. 1A to resolve our state’s budget problems, we disagree. Most of its provisions will not take effect for two years—two years that we should spend hammering out real solutions to our budget and fiscal challenges.

SEIU supports Prop 1C, which will bring in an additional $5 billion in revenue by modernizing the lottery.

Isn’t it a good idea to have a Rainy Day Fund?A real rainy day fund is a good idea, but that’s not what Prop 1A is. Instead of a real savings account that can only be used when times are bad, Prop 1a’s rainy day fund could be used as a slush fund by Governor Schwarzenegger to spend every year for unlimited borrowing and other purposes.

Besides, it’s raining now – how are we going to get the $12 billion to put into a Rainy Day Fund? Our budget is already underwater. Saving is good, but not if you can’t afford it: you have to cover your obligations and the necessities first.

But isn’t it good to even out spending so there won’t be so many ups and downs?Evening out spending is a good idea, but Prop 1A goes much further. The problem with 1A is that it “evens out” spending on vital public services by greatly reducing funding for them every year, year after year, for as long as it’s in effect. SEIU members and the people we care for will be the hardest hit.

What are the long-term effects of Prop 1A?Even in the short run, Prop 1A will result in huge cuts – the California Budget Project estimates that in the 2010-11 fiscal year, it will force spending down to a level that is $16 billion below the Governor’s own workload projections from December 2008.

The long-term effects of this will be devastating to all of the public services SEIU members provide, from home care to healthcare to childcare to K-12 education to higher education.

This goes beyond locking in the cuts of recent years. Spending on public services will be strictly limited and will be crowded out by other kinds of spending, such as debt payments and tax rebates.

If Prop 1A fails, won’t we have to make deeper cuts in two years, when the temporary taxes run out? Isn’t SEIU for raising revenue?Yes, SEIU is strongly for increased revenue to support the level of services Californians want and need; however, trading short-term revenue for a permanent spending cap that cuts funding for vital public services is a bad deal for the public and for SEIU members who provide those services. If Prop 1A passes, the revenues the legislature and the Governor passed will only be extended by two years, and then we’ll be right back where we started, only worse – because we’ll have strict limits on spending.

Why do Democratic legislative leaders support Prop 1A?Prop 1A is the result of our dysfunctional budget process, and it was part of a deal that legislative leaders made in order to secure the votes they needed. These same leaders supported giving billions to multinational corporations while taking away from low-income seniors and people with disabilities, school children, and college students.

Doesn’t the California Teachers Association support Prop 1A, and doesn’t that mean Prop 1A is good for schools? And how does Prop 1B relate to Prop 1A?Part of the bad budget deal was to take $11.6 billion from schools, then promise to give $9 billion back – with strings. That give-back is Prop 1B, which will only take effect if Prop 1A passes. It’s a cynical trap set by the Governor. His intention with Prop 1B was to make sure the powerful California Teacher’s Association didn’t oppose Prop 1A.

But supporting Prop 1A isn’t good for education in the long-term. Prop 1B pays back SOME of the money the Governor took from schools, but it will do nothing to lift California out of its outrageous 47th place ranking in per pupil spending. In fact, Prop 1A will do the opposite: lock us in.

In the long run, these billions will be far overshadowed by the effects of Prop 1A on every aspect of California’s public services, including schools. That’s why the California Federation of Teachers, the California Faculty Association, and the California School Board Association oppose Prop 1A.

SEIU endorsed Prop 1B because, even if Prop 1A fails, passage of Prop 1B helps schools make the case in court that the Governor’s take-away of school dollars was illegal.

I’ve heard that it’s important to vote for Prop 1A because that is the only way to protect cities’ funding. Is that true?No. Prop 1A does not contain a single provision that protects local funding from the state. In fact, because Prop 1A will put incredible pressure on the state budget in the future as the spending limits ratchet down, funds for local government may be less rather than more secure.

If we’re opposed to Prop 1A, what’s our solution to our budget problems?Prop 1A is not a solution to our budget problems; it will make them all worse – SEIU members will have to engage in a non-stop battle year after year to defend the services we provide, and we would be guaranteed to lose.

Our solution is the same that it has always been: we need new, real revenue to support education, healthcare, home care, and all of the other vital public services SEIU members provide. We can achieve some of that through a majority vote of the legislature, and we can work hard to elect more legislators and a Governor who agree with us that funding high-quality public services is the way to keep California working and competing.