Measure Also Eliminates Referendum on Budget-Related Bills

Allan Zaremberg

(July 9, 2010) Yesterday, California Chamber of Commerce President and CEO Allan Zaremberg and the Stop Hidden Taxes committee hosted a reporter roundtable to discuss three major flaws uncovered in Proposition 25 — the so-called Majority Vote Budget initiative that will appear on the November 2 ballot.

The CalChamber Board of Directors voted to oppose Proposition 25 because they believe it will give the majority party too much power and eliminate the option of referendum for fees or fee increases that are part of a budget appropriation. The measure would exempt the budget bill and other bills providing for appropriations related to the budget bill from the existing two-thirds vote requirement, and provide that those take effect immediately.

Although Proposition 25 proponents claim the measure would not allow the Legislature to raise taxes with a majority vote, and that it would penalize politicians for failing to deliver an on-time budget, the reality is far different.

A legal analysis by the law firm of Nielsen Merksamer, LLP revealed that Proposition 25 would:

• Effectively eliminate the right of voters to use the referendum to force a vote and stop taxes disguised as “fees.”
• Allow the state Legislature to enact taxes as part of the budget with a bare majority vote, circumventing the state Constitution’s two-thirds vote requirement for passing new or increased taxes.
• Make it easier for politicians to increase their lavish travel and expense accounts. Currently, they can increase these perks only with a two-thirds vote of the Legislature, but under Proposition 25, they would be able to increase them with a bare majority vote.

“Voters want the gimmicks and the games to end, and instead they want a fiscally responsible budget, less deficit spending and no more tax increases,” said Zaremberg. “But if Proposition 25 is successful, what voters will get is a Legislature that will raise taxes and spend money the state doesn’t have, and they’ll be able to do it with a bare majority vote. Most importantly, Proposition 25 eliminates the ability of the public to have a check and balance on the Legislature.”

(left to right) Teresa Casazza, president of the California Taxpayers' Association; Allan Zaremberg, president and CEO, CalChamber; Steve Merksamer, partner with Nielsen Merksamer LLP