The CBP Looks at Proposition 31

A new CBP analysis shines a light on Proposition 31, one of the most complex initiatives set to appear on the November 6 statewide ballot. Californians who’ve heard about the measure probably know that it would establish a two-year state budget cycle. But that’s just one of numerous provisions – which run the gamut from the modest to the sweeping – that would affect government at the state and local levels, as our new report shows. For example, Proposition 31 generally would require bills being considered in the Legislature to be in print and publicly available for three days prior to passage, a modest improvement that would help boost the transparency of the lawmaking process. However, the measure also includes several far-reaching provisions whose benefits aren’t so clear. These include allowing local governments to preempt state laws and regulations with locally developed alternatives, giving the Governor unilateral authority to cut state spending during a fiscal emergency, and establishing new pay-as-you-go, or “paygo,” rules that generally would require the Legislature to pay for some spending increases or tax cuts – those that exceed $25 million per year – with offsetting spending cuts and/or revenue increases.

Our analysis identifies a number of policy issues raised by Proposition 31. For example, allowing local governments to substitute locally designed rules for state laws and regulations could result in widely varying local approaches across a range of policy areas in which uniform statewide standards may be more appropriate. Moreover, Proposition 31 could also result in significant local policy changes that might not otherwise receive approval through the state’s ordinary – and longstanding – legislative and regulatory review processes. The measure’s paygo provisions also raise concerns. While properly designed paygo rules can be a valuable component of public budgeting practices, spending cuts and tax increases do not operate on a level playing field in California. Tax increases require a two-thirds vote of the Legislature, whereas spending cuts can be adopted by majority vote. Consequently, Proposition 31’s paygo rules likely would result in the costs of new or expanded programs being paid for with cuts to existing services, rather than with tax increases. Our analysis also shows that the measure’s most far-reaching changes would be placed in the state Constitution, making them difficult to alter in the future if they prove to be ill-advised or unworkable.

– Scott Graves