McGeorge School of Law

Proposition 56

Analysis of Proposition 56
The Budget Accountability Act of 2004


Glenda Corcoran
JD, McGeorge School of Law, University of the Pacific
to be conferred May 2004
B.A. Government and Journalism, California State University, Sacramento, 1998


Bridget Cremers
JD, McGeorge School of Law, University of the Pacific
to be conferred December 2003
B.A., Biological Sciences, University of California at Davis, 1996


Copyright © 2004 by University of the Pacific
McGeorge School of Law


Table of Contents

I. Executive Summary
II. The Current Law
III. Drafting Issues
IV. Constitutional Issues
V. Public Policy Issues
VI. Conclusion

I. Executive Summary

Currently in California, there is a growing concern among voters regarding the states fiscal matters. Voters have increasingly become frustrated with the inability of the Governor and Legislators to meet the June 15 deadline mandated by the state constitution for passage of the state budget. In fact, the budget deadline has been missed twenty-one times in the last twenty- five years. Budget Bills 1968-2002 2002budgetchart.htm> (accessed November 12, 2003). Currently, no means exists to encourage the Governor and the Legislature to pass the budget on time.

In response to the budget crisis, Proposition 56, also known as the Budget Accountability Act, will be placed on the March 2004 General Election Ballot. Cal. Prop. 56 (2004) (accessed November 3, 2003). Proposition 56 has two basic goals; (1) to reduce the number of votes to pass a budget, from the current two-thirds vote to a fifty-five percent majority; and (2) to encourage the Governor and Legislators to pass a timely budget.

Proposition 56 includes various reforms to the current budget process. The primary amendment reduces the legislative votes required to pass the budget from a two-thirds majority to fifty-five percent. Id. In addition, the Legislature would be required to remain in session and only work on budget-related legislation until the budget is adopted. Id. Each day the budget deadline is not met, the Governor and the legislators will lose their salaries until a budget is passed. Id. In order to encourage members to vote their conscience, the act contains provisions discouraging unethical behavior, including threats or intimidation, against other members. Id. In addition to the budget proposal, Proposition 56 requires a minimum of a five percent reserve fund to be created when the General Fund revenues exceed the amount needed to fund current General Fund service levels. Id. Proposition 56 also adds the requirement that the Legislature include a budget summary in the Official Voter Pamphlet to explain how the Legislature is spending state funds. Id.

II. The Current Law

A. Background of the Two-Thirds Vote

1. Historical Background

The current California budget process was created by a 1922 Constitutional initiative. Cal. Prop. 22 (1922) (accessed November 13, 2003). Sponsored by the Commonwealth Club of California, Prop. 22 instituted an appropriation measure similar to the current requirements. The initiative granted the Governor the responsibility to submit a budget to the legislature within the first thirty days of the legislative session. Id. The budget was to be accompanied by an appropriation bill covering the proposed expenditures, to be known as the budget bill. Id. The budget bill would be introduced immediately into each house of the Legislature by the respective chairpersons of the budget appropriation committees. Id. The budget bill was the only legislation that could include more than one item of appropriation. Id. Upon final passage, the Governor could reduce or eliminate any item of expenditure in the budget bill passed by the legislature. Id. Campaigning on the platform that the state should run on business principles, the supporters passed the initiative overwhelmingly, with more than seventy-one percent of the vote. Id.

Amid concern over rapidly rising expenditures, the Legislature submitted, and the voters approved by sixty percent, the Riley-Stewart Plan of 1933. This law required a two-thirds vote in both houses for any appropriation, exceeding by more than five percent, the same appropriation in the previous budget year. Cal. Prop. 1 (1933) (accessed November 3, 2003). Budget growth after 1933 almost always exceeded five percent. Essentially this provision required a super-majority for passage of the budget. Id.

In 1962, a Constitutional amendment removed the fifty-one percent vote requirement and mandated a two-thirds vote for passage of the budget. Cal. Prop. 16 (1962) (accessed November 5, 2003). The proponents persuaded more than seventy-nine percent of the voters that the amendment eliminated obsolete language.

With rising expenditures and the failure of the previous year's budget to pass by the July 1 fiscal year deadline, Proposition 3 in 1970 required the Governor to submit the budget to the Legislature within the first ten days of the legislative session instead of the first thirty days. In addition, the legislative deadline to pass the budget was changed from July 1 to June 15. Cal. Prop. 3 (1970) (accessed November 5, 2003). The supporters of the amendment believed the additional time would allow legislators more time to consider the budget. In addition, the supporters claimed the early mandatory deadline would force the legislature to enact the budget before the fiscal year began. Id. As recent missed deadlines have demonstrated, problems with the budget have continued despite these changes.

2. How the Budget is Passed in California

The budget assigns the legal authority for the state to spend money each fiscal year. The funding provides for services to California including transportation, housing, health care, childcare, education and consumer protection. The magnitude of California's economic size is evidenced by the state's ranking as the eight largest economy in the world, as well as a 2002-2003 fiscal year budget totaling more than $73 billion. California Budget Project <> (accessed November 1, 2003); Legislative Analyst's Office, California's Fiscal Outlook <> (accessed November 10, 2003).

The California state constitution establishes the requirements for the budget process. Cal. Const., art. IV, § 12. The first phase requires the Governor to submit a budget to the Legislature by January 10 for the ensuing fiscal year. Id., at §12(a). The budget proposal must contain the Governor's proposed spending plan and include itemized statements for recommended state expenditures, as well as state revenues. Id. In seeking a balanced budget, the Constitution provides that if the proposed expenditures for the budget year exceed estimated revenue, the Governor is required to recommend the sources of the necessary additional funding. Id.

Following receipt of the Governor's proposed budget, the Legislature must introduce a budget bill which itemizes the Legislature's recommended expenditures. Cal. Const., art. IV, § 12(c). The bill shall be introduced immediately in each house by the person chairing that house's budget appropriation committee. Id. The Senate Budget and Fiscal Review Committee along with the Assembly Budget Committee, are the two committees assigned to hold hearings on the Budget Bill. Department of Finance, California's Budget Process <> (accessed October 25, 2003). These two committees then assign the items in the budget bill to several subcommittees by major subject areas, such as Education or Health and Human Services, which then conduct budget hearings. Id. The subcommittees provide an open forum for public testimony and in-depth discussions of the impacts of the budget changes. Id. When the subcommittees complete their hearings, they report their recommendations to the full budget committees. Id. Once the budget is adopted by the full committees, a recommendation is made to the members of each house on the Assembly and Senate Floor. Id. After a two-thirds vote by each house, the budget bill is sent to the other house. Id. A Budget Conference Committee, which consists of three members from each house, is then appointed to work out differences between the Senate and Assembly versions of the bill. Id. Once the Conference Committee works out the differences between the two versions, the bill is sent to back to the two houses for approval by a two-thirds vote in each house. California Budget Project <> (accessed November 1, 2003). The state Constitution allows the Legislature until midnight on June 15 of each year to pass the budget bill. Cal. Const., art. IV, § 12 (c). The Legislature may not send to the Governor any additional bills for consideration containing appropriations or expenditures until the enactment of the budget bill. Id. The major exception to this provision is made in the case of emergency bills. Id.

Once the Governor receives the budget, he or she is allowed to reduce or eliminate any items of appropriation using the line-item veto power. Id., at § 10(e). As a result, if the budget bill is an urgency measure, it goes into effect on July 1, or immediately if signed after July 1. California Budget Project <> (accessed November 1, 2003)

3. States Requiring a Supermajority (Or Modified Supermajority) to Pass the Budge and Taxes

Although each state's voting requirements on fiscal matters are different, currently nine states require some form of a supermajority vote to pass fiscally related measures. Along with California, currently Arkansas and Rhode Island require supermajority votes in order to pass their budget bills. The six additional states, Connecticut, Hawaii, Illinois, Maine, Mississippi and Nebraska require supermajority votes under certain conditions. National Conference of State Legislators, Supermajority Vote Requirements to Pass a Budget, (accessed November 18, 2003).


a. Supermajority States

California, Arkansas and Rhode Island are unique among the states due to their strict adherence to a supermajority vote for passage of state budgets. In California, a constitutional provision dating back to 1962 requires a two-thirds vote for general fund appropriations allocated for purposes other than those concerning public schools. Cal. Const., art. IV, § 12. Since the Legislature typically passes only one budget bill, the requirement effectively applies to the budget in its entirety. In Arkansas, a 1934 constitutional amendment requires the Legislature to obtain a three-fourths majority on appropriations dealing with all subjects, except for education, highways, and the reduction of the state debt. Ark. Const., art. V, § 39. Appropriations for these aforementioned purposes require only a simple majority vote of the Legislature. Id. Lastly, Rhode Island requires a two-thirds majority for appropriations for either local or private purposes. R.I. Const., art. VI, § 11. Like California, since Rhode Island typically drafts all main appropriations bills for operations into a single budget bill, a two-thirds vote is required for all appropriations. National Conference of State Legislators, Supermajority Vote Requirements to Pass a Budget, (accessed November 18, 2003).

b. Modified Supermajority States

The remainder of the states employing forms of supermajority votes are dictated by each state constitution. For instance, Connecticut and Hawaii each require a simple majority unless the general fund expenditure is exceeded. If the situation occurs where the general fund expenditure is exceeded, then the Connecticut Legislature must obtain a three-fifths vote and the Hawaii Legislature must obtain a two-thirds majority vote to pass their respective budgets. Conn. Gen. Stat. Ann. §§ 2-33a; HI. Const., art VII, § 9. Additionally, Mississippi requires a simple majority vote unless a bill is considered a donation. Donations require a two-thirds vote. Cal. Sen. H.R. 1; Jt. R. 66 (Dec. 2, 2002).

The three remaining modified supermajority states are Illinois, Maine and Nebraska. In Illinois, a 1994 constitutional amendment required a majority vote to pass all legislation, including the budget, if it is passed by June 1 of each calendar year. After this date, a three-fifths vote must be obtained by the Legislature. IL. Const., art. IV, § 10. The intent of this amendment is to serve as incentive for the Legislature to complete its work in a timely fashion before the supermajority becomes a required measure. In 1995, 1996 and 1997 the Illinois state budget was passed on time. However, it is unclear if the supermajority vote was a factor. In fact, the previous Illinois requirement of a three-fifths majority vote after June 30 failed to prevent late budgets on a number of occasions in the 1980s and early 1990s. National Conference of State Legislators, Supermajority Vote Requirements to Pass a Budget, (accessed November 18, 2003). In Maine and Nebraska a simple majority vote allows a bill to become effective ninety days after the bill is enacted. If the budget is not passed ninety days before the fiscal deadline, a two-thirds vote is required. Id.

4. Proposition 13 and the Two-Thirds Vote Requirement

Proposition 13 set the current constitutional requirements of a two-thirds vote for legislative approval of tax increase measures. Article XIII A, § 3 of the California Constitution states, ".any changes in state taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature." Cal. Const., art. XIII A, § 3. On June 6, 1978, California voters passed Proposition 13 with over sixty-five percent of the vote. California Budget Project, Proposition 13: Its Impact of California and Implications for State and Local Finances, (accessed November 1, 2003). Proposition 13's electoral success can be attributed to the fact that people were losing their homes because they could not afford property taxes. Howard Jarvis Taxpayers Association, Background on Proposition 13 (accessed November 1, 2003). The provisions of Proposition 13 reduced property taxes paid on homes, businesses, and farms by about fifty-seven percent. Joel Fox, Proposition 13: A Look Back (accessed November 1, 2003). Further, Proposition 13 includes a provision barring property tax rates from exceeding one percent of the property's market value and mandates that valuations cannot grow by more than two percent per annum unless the property is sold. Id. However, if a property is sold, the value is reassessed at one percent of the new market value, with a two percent yearly cap placed on the new assessment. Id. This requirement was intended to assure that new buyers would be aware of the maximum increase in the amount of taxes placed on the property each year for the duration of their ownership of that piece of property. Id. In addition to capping property tax, Proposition 13 requires all state tax increases be approved by a two-thirds vote of the Legislature and that local tax rates have to be approved by a vote of the people. Id. Some suggest the overwhelming support of Proposition 13 is evidence of voters gaining control over economic decisions affecting their lives. Howard Jarvis Taxpayers Association, Background on Proposition 13 (accessed November 1, 2003). Proposition 56 will give the electorate another opportunity to determine how economic decisions in California are made.

B. Existing Law

The current vote requirement in the State Constitution requires each house of the Legislature to approve the budget by a two-thirds vote. The vote requirement has been an ongoing debate in the Legislature. For example, in the last twenty years, over ten well thought out constitutional amendments have been introduced in the Assembly and Senate regarding the need to reform the passage of the budget. California State Senate <> (accessed October 1, 2003). The suggestions vary from going back to a biennial budget, to requiring an increase in the budget vote to three-fifths. For example, ACA 1 (December 2, 2002); ACA 4 (Dec. 7, 1998); SCA 16 (July 17, 1997); SCA 2 (December 5, 1994); and ACA 7 (April 29, 1991) all addressed the issue of the budget vote.

The California Constitution requires the Legislature to pass the budget bill by midnight on June 15 of each year. Cal. Const., art. IV, § 12 (c). Even though the Governor and the Legislature have almost six months to adopt the budget and commence the summer recess, the constitutional deadline of June 15 has only been met four times in the last twenty-five years. Budget Bills 1968-2002 2002budgetchart.htm> (accessed November 12, 2003). Most recently in 2002, the budget was a record seventy-six days late. Id.


Date Passed by the Legislature


July 5


July 12


July 16


June 15


June 25


July 19


June 15


June 13


June 12


July 1


June 30


June 29


July 28


June 20


August 29


June 22


July 4


August 2


July 8


August 11


August 11


June 16


June 22


July 21


September 1


July 29

* Passed by the Constitutional deadline.

Despite the constitutional deadline, no consequences exist for the Governor and legislators for failure to pass a timely budget. Members have continued to collect their salaries, work on other bills, or take personal vacations. For example, members have gone on vacation even though they are required by the internal legislative rules to stay in session for a set period of time. Along with the constitutional deadline to pass the budget, Assembly and Senate Joint Rules require that the summer recess of the legislature "shall not commence until the budget bill is enacted." Cal. Sen. S.C.R. 1; Jt. Rule 51 (Dec. 2, 2002). This rule has often been disregarded. For example, in 2002, the Senate went on summer vacation after they passed the final version of the budget while the Assembly was still debating the same version. The situation left no opportunity for the Assembly to make any changes because the Senate would have had to approve the new language.

If members threaten each other during the legislative budget process, the current Senate Committee on Legislative Ethics and the Assembly Legislative Ethics Committee, respectively, may receive complaints. Cal. Sen. S.C.R. 1; Jt. R. 45 (Dec. 2, 2002). The members and the committees shall have the power to investigate and make findings and recommendations concerning the violations by members of their respective houses. Id. Each house has adopted rules governing the establishment and procedures of the ethics committee. Id.

There is currently no requirement enforced for the state to maintain a specific budget reserve to provide a cushion against future unforeseen expenses or revenue shortfalls. In 1988, the

California voters passed Proposition 98, which established a minimum level of state funding for schools. Cal. Prop. 98 (1988) <> (accessed November 13, 2003). In addition to the school funding levels, the measure amended the California Constitution to establish that the Legislature shall create a "prudent state reserve funding of such amount as it shall deem reasonable and necessary." Cal. Const., art. XIII B, § 5.5. While the people of California voted for a prudent reserve, an amount or percentage was never discussed or approved. In addition to the public's request for a reserve, the California State Assembly established a rule stating the Budget Bill may not be voted upon unless it, among other things, provides for a General Fund reserve of not less than three percent of the total of all General Fund appropriations made in the Budget Bill for the fiscal year, or provides for a reserve of not less than one percent and a specific plan to phase in a reserve of at least three percent within three years. Cal. Asm. H.R. 1; Asm. R. 66.7 (Dec. 2, 2002).

While there is nothing in the current process that requires an official summary of the legislators' budget voting history, the public can access the legislative web sites to research how their representative voted on any measure. The current voting history, although available, can be confusing and difficult to summarize.

C. Changes Proposed by Proposition 56

1. Fifty-Five Percent Vote Requirement for the Budget & Taxation

The Budget Accountability Act sets forth a set of objectives with a goal of enabling the budget and related tax reforms to pass more easily. This Act would reduce the number of votes necessary to pass the budget and related taxes, from a two-thirds to a fifty-five percent vote. The budget would take effect immediately upon signature by the Governor or upon a date specified in the pertinent legislation. If passed, the language of the Budget Accountability Act would be contained in an amended version of Article IV, Section 12(f) of the California Constitution. The language would be amended to read:

The budget bill and tax and other bills related to the budget bill may be passed in each house by a roll call vote entered into the journal, fifty-five percent of the membership concurring, to take effect immediately upon being signed by the Governor or upon a date specified in the legislation. Nothing in this subdivision shall affect the vote requirement for appropriations for the public schools. (accessed September 20, 2003)

As a result of the budget containing many types of revenue, including taxes, certain taxes would also only need a fifty-five percent vote. Taxes included are limited to those related to the budget, and in the budget bill. In addition, no new ad valorem taxes on real property, or sales or transaction taxes, on the sale of real property may be imposed. Id. at §§12(f)(2),(3).

2. Hold Legislators Accountable For Not Passing Timely Budget

The changes proposed would prohibit legislators and the Governor from collecting their salaries and expenses for each day they miss the constitutional budget deadline and would force the Legislature to stay in session and consider the budget until it is passed. Cal. Prop. 56 (2004) § 3 (1)(a). Thus, if June 15 passes without a budget in place, the Legislature must stay in session without its members being entitled to any salary, per diem or other expense allowances until a budget bill is passed and sent to the Governor. Retroactive payment for any forfeited expenses will not be allowed. Cal. Prop. 56 (2004) § 4. The measure would save the state about $50,000 per day in salaries and expenses until approval of the budget. Analysis of the Budget Accountability Act. In addition, if the Governor vetoes the budget bill, this provision remains in effect until a budget is passed and signed into law by the Governor. Id.

3. Ethical Considerations

Proposition 56 prevents legislators from being punished for voting their conscience on the budget. This provision's intent is to prevent members from being pressured into voting based on party lines. Any legislator who is threatened by other legislators on a budget vote would be able to file a complaint with the Ethics Committee of either the Senate or Assembly. The Ethics Committee would then be required to fully investigate the complaint and make the report and recommendation for action available to the respective house. Cal. Prop. 56 (2004) § 3(1)(d). As amended the language would read:

No officer, committee or member of either house of the Legislature, shall punish or threaten to punish any other member for his or her vote on the budget bill or tax and other bills related to the budget. Any member may file a complaint regarding violations of this section with the appropriate ethics committee of the house in which the alleged violation occurred. The ethics committee shall investigate the complaint and make recommendations to the full house regarding appropriate action, including censure, to be taken on the complaint. The ethics committee's findings shall be made public. Id.

4. Accountability to Voters - Summary of Voting Records of Legislators on Budget, Taxation and Other Related Measures Included in Each State Ballot Pamphlet Proposition 56, in requiring a summary to be submitted to the voters on the legislators' budget voting history, attempts to inform voters as to how state funds are spent. This proposal would amend the current Election Code to allow for a short summary in the ballot pamphlet, illustrating how each member of the Legislature previously voted on budget and tax related issues. The State Controller would be required to prepare a budget summary to be included in the ballot pamphlet provided to voters at every statewide election. This summary would include directions to an Internet website that includes voting records of legislators on budget-related bills. The Legislative Analyst Office has determined that the summary requirement would result in minor costs to the state. Analysis of the Budget Accountability Act.

5. Changes to Reserve Fund Provisions

Proposition 56 would change the current reserve funds from a "prudent reserve" required by Proposition 98, to a percentage set aside during surplus budget years. This requirement would take effect in years the General Fund revenues exceed the amount needed to fund current General Fund service levels. Cal. Prop. 56 (2004) § 4(h). The Proposition defines current General Fund service levels as "levels of service as of June 30 of the prior fiscal year necessary to meet the constitutional, statutory, and contractual obligations of the state adjusted for population and cost of living as of the effective date of this measure." Cal. Prop. 56 (2004) § 4. The Legislature would be required to deposit at least twenty-five percent of surplus revenues each fiscal year into a "Prudent State Reserve Fund." Id. However, if the reserve fund is greater than or equal to five percent of the general fund expenditures for the previous fiscal year, the allocation to the reserve fund will not be made. The goal of the reserve fund is to prevent the need to increase taxes and decrease state programs in weak economic times. The only other instance where the reserve could also be utilized is in the case of a state of emergency declared by the Governor. Thus, this reserve fund cannot in any instance be employed to increase spending. Cal. Prop. 56 (2004) § 4.

III. Drafting Issues

A. Severability

Proposition 56 contains a severability clause which allows provisions later found invalid to be severed from the valid portions. This clause is a procedural safeguard which is a common provision in many initiatives to prevent entire propositions from being invalidated due to the finding that a clause is unconstitutional. The severability clause of Proposition 56 states:

If any of the provisions of this measure or the applicability of any provision of this measure to any person or circumstances shall be found to be unconstitutional or otherwise invalid, such finding shall not affect the remaining provision or applications of this measure to other persons or circumstances, and to that extent the provisions of this measure are deemed to be severable. Cal Prop. 56 (2004) § 7.

Although Proposition 56 includes a severability clause, it is not conclusive without further analysis. A court will examine three criteria to determine if an initiative provision is invalid and should be severed. Gerken v. Fair Political Practices Commission, 6 Cal. 4th 707, 715 (1993). To determine if a provision of an initiative is severable, the provision must be grammatically, functionally, and volitionally separable. Id.

The provisions of Proposition 56 appear to be clearly drafted and meet the criteria to render no part unconstitutional. However, if this proposition should face a future challenge of constitutionality, a court would look to provisions found to be valid. Determination of the valid portions is dependent upon whether the intent of the electorate was sufficiently focused on the remaining language and if these clauses would have been separately considered and adopted without the supposed invalid provisions. Id., at 716.

B. Future Changes

The California Constitution states, "When specific circumstances are met, the Legislature may amend or repeal referendum statutes. It may amend or repeal an initiative statute by passing another statute that becomes effective only when approved by the electors unless the initiative statute permits amendment or repeal without their approval." Cal. Const., art. II, § 10(c). Proposition 56 allows for future changes to the code sections proposed to be amended without the approval of the electorate. Cal. Prop. 56 (2004) § 8. Elections Code § 9082.9, relating to the budget summary requirement, and Government Code § 9518, relating to definition of current General Fund service levels, could be amended following passage of the Proposition 56 by a roll call vote entered in the journal of each house, fifty-five percent of the membership concurring. Id. Allowing these changes to be made with a fifty-five percent vote, insures a higher threshold than the simple majority vote provision required for all non-tax-related bills. Permitting the Legislature the ability to amend code sections approved by voters, encourages continued workability of the law.

C. "Related to" Language

Tax-related measures would be allowed to be voted on by fifty-five percent if they are connected to the budget bill. The limitation provided in Proposition 56 relating to tax measures requires the taxes to be identified as related to the budget and included in the budget bill. In addition, the limitation provides that no new ad valorem taxes on real property, or sale or transaction taxes on the sales of real property may be imposed. Cal. Prop. 56 (2004) § 4.

While the language of the Proposition attempts to distinguish tax measures that are included in the budget from those that are separate, there may be ambiguity in the language. The taxes included in the proposition may inadvertently allow additional "related" tax measures to be included in the budget. If this were to happen, these unrelated taxes would be passed by fifty-five percent, instead of two-thirds, which the voters intended when passing Proposition 13.

IV. Constitutional Issues

A. Federal Constitution

The Budget Accountability Act does not raise any Federal Constitutional issues.

B. California State Constitution

1. Single Subject Rule

Article II, Section 8(d) of the California Constitution states "an initiative measure embracing more than one subject may not be submitted to the electors or have any effect." Cal. Const., art. II, § 8(d). The rationale for enacting this section was to promote disclosure and avoid confusion of both voters and petition signatories, and to avoid the frustration of the electorate's will. Senate v. Jones, 21 Cal. 4th 1142, 1156-57 (1999). In the 1982 California case Brosnahan v. Brown, 32 Cal. 3d 236, 241 (1982), the California Supreme Court set forth a standard that all parts of an initiative must be reasonably germane to each other and to the general purpose of the initiative. However, the Court later broadened the single subject rule in Legislature v. Eu, 54 Cal. 3d. 492 (1991). In Eu, the Court expanded the reasonably germane standard of the single subject requirement by finding that as long as the provisions of an initiative are reasonably related to a common theme or purpose, the measure is not in violation of the single subject rule. Id.

Proposition 56 does not appear to violate the single subject rule. The provisions of this Proposition appear to be reasonably related to the common purpose of alleviating the fiscal stress caused to the state when a budget is not passed on time. The reduction of the vote requirement for passage of the budget coupled with monetary and legislative restrictions placed on lawmakers all serve to facilitate the passage of the budget by the constitutionally mandated deadline of June 15.

On the other hand, an argument may arise that the initiative covers more than one issue. For example, if a court found that the punishment of legislators and the decrease in votes needed to pass the budget are unrelated, a violation of the single subject rule would occur. If this initiative were found to violate the single subject rule, the initiative would fail in its entirety because the single subject rule does not provide for severability. Senate v. Jones, 21 Cal. 4th 1142, 1156-57 (1999). However, since these provisions are reasonably germane to the common theme of timely budget passage, Proposition 56 likely does not violate the single subject rule.

V. Public Policy Issues

A. Proponents' Arguments for The Budget Accountability Act

1. Fifty-Five Percent Vote Requirement of Budget Vote

Proponents view Proposition 56 as a balanced solution to preventing gridlock and insuring the passage of a timely budget. In addition, they maintain that the most fundamental responsibility of state lawmakers is the approval of the annual budget, and a fifty-five percent vote would encourage a timely budget. According to the California Citizens Budget Commission, evidence suggests that the requirement of a supermajority vote makes passing a budget on time more difficult. Supermajority Vote Requirements to Pass the Budget < (accessed October 8, 2003). Instead of slowing growth in state spending, California's two-thirds vote requirement may have the opposite effect, allowing the legislative minority to frustrate the process of reaching compromise by withholding budget votes for spending. For instance, the minority can just as easily hold out for more district specific spending which results in gridlock. California Budget Project, (accessed November 3, 2003).

a) Consequences of a Late Budget

Proponents argue that Proposition 56 will end the fiscal consequences and political gridlock associated with a late budget. Cal. Prop. 56 (2004), § 2(f). The proponents of Proposition 56 designed the measure with the intent of ending the budget delays that have contributed to the fiscal crisis in our state. Id. Supporters contend that when the economy weakens, the state is vulnerable to deficit. Furthermore, supporters assert that deficits force large cuts in current programs to education, health care, and transportation, in addition to raising taxes. Evan Halper and Jaffrey Rabin, Proposed Act Aimed at Unsnarling Budget Process. These deep cuts and large tax increases would not have been necessary if responsible budget solutions had been possible instead of continuous gridlock. Id.

b) Refusal to Compromise

Proponents also assert that party leaders have utilized the two-thirds vote requirement as one of many reasons not to compromise, resulting in a hold-up in the passage of the budget. Cal. Prop. 56 (2004) § 2(d). As such, proponents maintain that the reduction of the vote from two-thirds to fifty-five percent would end partisan gridlock and allow for a budget to pass by the June 15 deadline. The 55% Solution, April 22, 2003 (accessed August 28, 2003). Further, a handful of legislators would not be successful if the attempted to stall adoption of the budget until their particular spending demands were met. Inability to compromise has proven disruptive to schools, local governments, road crews and others because it temporarily halts the flow of revenue to them from the state. Evan Halper and Jaffrey Rabin, Proposed Act Aimed at Unsnarling Budget Process (August 28, 2003).

Proponents argue that another outcome of the repeal of the two-thirds vote requirement would be the elimination of pork-barrel projects and political paybacks for votes. Clovis Republican Assembly Member Mike Briggs allegedly participated in this "pork exchange" during the budget stalemate in 2002. Lesli A. Maxwell, Briggs Denies Making a Deal on the Budget, The Fresno Bee, B1 (September 4, 2002). Briggs was one of only four Republicans who voted in favor of the budget allowing a two month standoff to end. Id. Briggs contended he did not vote in favor of the budget because of so called "goodies" offered to his district. Lesli A. Maxwell, Briggs' Vote Helps Pass Budget, The Fresno Bee A1 (September 1, 2002). However, Assembly Member Briggs did negotiate some local projects for his district. Lesli A. Maxwell, Briggs Denies Making a Deal on the Budget, The Fresno Bee B1 (September 4, 2002). Thus, Proposition 56 aims to prevent legislators from giving into short term budget demands in order to gain the vote of two-thirds of the members, rather than seeking long term solutions to fix the state's budgetary problems.

c) Protections/Checks and Balances

In addition to the vote requirement, Proposition 56 provides additional checks and balances for the budget. For example, the budget bill must still survive the committee process which consists of input from members of both parties. Further, once the legislature passes the budget, the Governor retains the ability to reduce or eliminate expenditures using the line item veto. Cal. Const., art IV, § 12(e). This authority reduces individual spending items that are too costly. Cal. Budget Project California Budget Project (accessed November 3, 2003). However, the most important check and balance available is the voters' decision to reelect representatives based on that legislator's voting record on important issues, including the budget.

d) Proposition 13

Proponents argue that Proposition 56 will not change Proposition 13's property tax limitations. Proposition 56 changes the legislative vote requirement for taxes to fifty-five percent only for the purpose of increasing taxes as part of the process of adopting the budget. Cal. Prop. 56 (2004) § 3(2). The Act specifically indicates that no new taxes on real property, or sales or transaction taxes, on the sale of real property would be subject to the fifty-five percent vote. Id. at §§12(f)(2),(3).

2. Vote Accountability - Hold Legislators Accountable For Not Passing Timely Budget

The proponents cite as one of the benefits of Proposition 56 an improvement in the legislators' accountability to voters. Cal. Prop. 56 (2004) § 3(1)(c). The State Legislature and Governor have almost six months to complete the budget on time. However, the State Legislature has not passed a budget on time since 1986. Cal. Prop. 56 (2004) § 2(a). Voters want answers as to why this occurs. Proposition 56 aims to penalize legislators if they do not pass the budget on time and is estimated to be able to save the State fifty thousand dollars every day the Legislature is deadlocked. Analysis of the Budget Accountability Act. An example of a legislator's indifference to whether or not the budget was passed on time occurred in 2001. Assemblyman Lou Papan left for a vacation in Spain after the budget failed to pass by June 30. While Papan did not miss a single vote on the budget, he prevented the legislature as a whole from negotiating a new budget. Mark Simon, Lawmaker's Vacation is Well Timed; Papan Manages Getaway During Budget Impasse, The San Francisco Chronicle, A11 (July 17, 2001). Thus, the idea behind Proposition 56 is that if legislators must forfeit their salaries and per diem expenses, as well as stay in session working only on the budget, a timely budget will result.

3. Ethics

Proponents assert the Budget Accountability Act will allow legislators to vote according to their conscience rather than being pressured to vote along party lines. This is a result of party leaders previously threatening legislators if they refuse to vote along party lines on the budget. Cal. Prop. 56 (2004) § 2 (h). An example of threats made to other party members occurred in 2003, when Senator Jim Brulte (R-Rancho Cucamonga) stated he would not support a Republican incumbent in the primaries who voted to raise taxes in conjunction with the 2003 California budget. Lynda Gledhill, GOP Caucus Warned Not to Budge; Leader Says He Will Work to Defeat Anyone Who Votes for Tax Hike, The San Francisco Chronicle, A18 (June 5, 2003). Accordingly, the Budget Accountability Act would call for accountability to constituents rather than party leaders. Thus, Proposition 56 would remove the ability of party leaders to censure members of party caucuses, party leaders, or individual legislators who cast a particular vote. Id.

4. Summary in Ballot of Legislators' Budget Voting Record

Proponents of the Budget Accountability Act also argue that voters are entitled to easy access to information on how their money is spent. By providing voters with statistics in a ballot summary detailing how each state representative voted on taxes and the budget, the electorate will be fully informed on how their representative voted on the state's fiscal matters. Supporters of Proposition 56 believe voters currently do not have a simple means of finding out how legislators vote. The summaries would give directions to a website where voters could access current information on the voting history of legislators on related issues to the state budget. Cal. Prop. 56 (2004) § 2(c). As a result, voters would be able to remain constantly educated as to how funds are being spent by legislators at a minimal cost to the state to create these pamphlets. Analysis of the Budget Accountability Act < Analysis of the Budget Accountability Act.

5. Reserve Fund

Proponents argue the establishment of a set amount to be allocated to a reserve fund will ease fiscal stress during weak economic times. The California Constitution establishes a "reasonable and prudent" reserve; however, no set amount is specified. Proposition 56 proposes a remedy to California's economic fluctuations, which currently result in the state being left with inadequate reserves for poor economic periods. The change would set aside twenty-five percent of surplus revenues until reaching the amount of five percent of the total General Fund expenditures. The contribution to this fund would cushion the budget against extreme swings, which result in budget cuts and would decrease the likelihood of tax increases in weak economic times. Additionally, expenditures from this fund would only be deducted from this account in circumstances of economic downturn or expenses related to a disaster declared by the governor.

B. Opponents' Arguments Against The Budget Accountability Act

1. Fifty-Five Percent Vote Requirement of Budget Vote

The opponents primarily disagree with the need for the provision regarding the change from a two-thirds vote to a fifty-five percent vote to pass the budget. They claim the two-thirds vote acts as a counterbalance to the well-financed spending lobby which is consistently pressuring government to increase spending. Current requirements provide the party in the minority the only effective means of input into the annual budget process. Opponents further argue that the budget problem is not the result of difficulty in achieving a two-thirds vote for the budget, but rather the failure of legislators and the Governor to consistently produce prioritized, balanced budgets and legislative inattention to California's economy and competitive position. <> (accessed September 31, 2003).

The proponents claim that the two-thirds vote "causes a tyranny of the minority"; however, the concept of the two-thirds vote has always been part of our democratic republic, and it appears numerous times in the United States Constitution. A Difference of Principle: The Minority Report of the California Constitution Revision Commission, <> (accessed October 10, 2003). The purpose of the two-thirds vote is to give certainty to important decisions and there is no power of the government more important that that of levying taxes. Id. The opponents assert the two-thirds vote is a protection against a "tyranny of the majority" regarding important constitutional rights. Id. Additionally, the rights of constituents in minority party districts may be adversely affected.

The continued General Fund operating deficit shows California has been overspending. For example, the current budget has produced a deficit of $8-10 billion even without additional spending programs. Analysis of the Budget Accountability Act <> (last accessed September 29, 2003). The opponents claim the fifty-five percent vote would lead to even greater spending since the two-thirds vote has not curbed spending. Id. Opponents believe changes should encourage more fiscal restraint and should not make it easier to authorize spending. Id.

2. Proposition 13

California voters enacted the two-thirds vote requirement by passing Proposition 13, which provides, ".any changes in state taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature." Cal. Const., art. XIII (a), § 3.

Opponents claim that Proposition 56 is a violation of Proposition 13 because taxpayers have few protections against unjustified tax hikes. Larry McCarthy, Blank Check Initiative is a Cynical Trick, (accessed October 1, 2003). A quarter century ago voters approved Proposition 13 as a taxpayer protection embodied in the state constitution. Id. One of the elements of Proposition 13 is the requirement that all state tax rate increases be approved by a two-thirds vote of the Legislature. Cal. Prop. 13 (1978).

3. Checks and balances

Opponents argue that gridlock over the budget is favorable, not burdensome. A two-thirds vote encourages debate that would otherwise be lacking with a fifty-five percent vote. In addition to debate, the two-thirds vote benefits the public by forcing legislators to work together for a bipartisan resolution rather than have one crafted only by the majority party. Analysis of the Budget Accountability Act <> (last accessed September 29, 2003).


In response to the ongoing budget crisis, Proposition 56 will be placed on the March 2004 Primary Election Ballot. If approved, Proposition 56 will lower the voting threshold for the state budget and encourage the Legislature to pass the budget by the constitutional deadline. Proponents emphasize that improved state fiscal management can be achieved with the passage of Proposition 56. Opponents are concerned that the effect of Proposition 56 will be a removal of bipartisan compromise, in addition to weakening the previous will of the voters articulated by Proposition 13. Regardless of the arguments presented by proponents and opponents of Proposition 56, the voters will make the ultimate decision of whether or not the budget process should be changed.