California budget fixes fail

SACRAMENTO -- California voters gave an emphatic thumbs-down Tuesday to five ballot measures that elected leaders were banking on to help plug a gaping hole in the state budget.

With about 62 percent of the state's precincts reporting, Propositions 1A through 1E were being crushed by margins as wide as 29 percentage points, and none was winning more than 40 percent approval.

Only Proposition 1F, which will freeze the pay rates of state elected officials in down budget years, won. Reflecting voters' anger with almost all things legislative and gubernatorial, it won big.

"It's a rejection of the status quo," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, which was part of a confederation of groups that opposed the first five ballot measures.

" 'No' is going to be a new word in the lexicon of many of our elected leaders as they are going to have to tell their constituents that the state's spending has to stop."

The defeat of Propositions 1A through 1E means the state budget's $15.4 billion river of red ink will deepen to a projected $21.3 billion.

That's because 1C, 1D and 1E included $5.9 billion that officials had hoped to borrow from the state lottery and special funds for children's development and mental health programs, but needed voters' permission to do so.

Gov. Schwarzenegger, who with legislative leaders was one of the biggest cheerleaders for the measures, was in Washington on Tuesday.

"The voters have spoken and they are telling us that government should do the best it can with the money it has," the governor said in a statement. "We will immediately and responsibly get to work to balance the budget and head off a cash crisis in July. Delay is not an option."

Last week. the governor proposed that should the measures fail, the lost revenues would be made up by cutting an additional $2.3 billion for schools and community colleges; borrowing $2 billion from cities and counties; transferring some state prison inmates to county jails and some illegal immigrant prisoners to federal custody; and slicing deeper into health, social services and other programs.

Legislative leaders in both parties have been reluctant to embrace the governor's proposals, although further tax-increase efforts appear to be dead on arrival.

Schwarzenegger has said he will not support another round of tax hikes, a sentiment echoed by GOP legislative leaders.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Tuesday night he didn't know if Democrats would pursue tax increases.

"We're going to get up tomorrow morning, dust ourselves off and get right to work," Steinberg said.

Legislators and the governor agreed to $12.8 billion worth of tax increases in February as part of a fragile and excruciatingly convoluted plan to close a $40 billion deficit in the state budgets for the current fiscal year and the one that begins July 1.

The ballot measures on Tuesday's ballot were created as part of the plan.

Proposition 1A was put in the package at the behest of GOP lawmakers and the governor. It would have created a "rainy-day" reserve fund and restricted state spending in bountiful budget years.

That idea didn't sit well with some of the state's most powerful unions, which opposed any restrictions that might keep money from being spent that would benefit their members.

To prevent the unions from campaigning to defeat 1A, legislators included $16 billion worth of temporary taxes, which union leaders favored as a way of assuring the state had enough revenues to limit spending cuts that might affect the unions' members.

But the taxes didn't mollify all the unions, and in fact became the focal point of opposition to 1A from anti-tax groups and others.

Proposition 1B was almost as confusing as 1A. Starting in mid-2011, it would have required the state to pay California schools $9.3 billion in future years for funds lawmakers and the governor withheld to help balance the budget.

But to enhance 1A's chances, 1B was tied to passage of 1A, meaning both had to pass for the money to be restored. Despite the link, some educators' unions favored 1B while opposing 1A.

The measures' failure makes it likely teachers unions will sue the state to recover the money.

Proponents looking for a silver lining might take consolation that their measures were rejected by relatively few of California's voters. Turnout was expected to be one of the lowest in state history, perhaps lower than the 36.4 percent of registered voters that cast ballots in the November 1993 special election.

The amount invested in the special election -- the state's 13th election since 2000 -- was estimated at from $60 million to $100 million, according to Kate Folmar, spokesperson for the secretary of state's office.

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