Propositions 1A – 1F – An Analysis

The Propositions

Statewide Special Election - May 19

By going to the web site of the California Secretary of State, which you can do by clicking here, you will find both the text of the propositions and the arguments for and against it in separate pdf files.

Howard Jarvis Taxpayers Association
Howard Jarvis Taxpayers Association

THE NEW CALIFORNIA TAX REVOLT!
Vote No on Prop. 1A


March 7, 2009

“We are a government of the People and for the People instead of by and for the Politicians.”
– Howard Jarvis, 1977

Proposition 1A is a blatant attempt to raise all Californians’ taxes to support the continual overspending by Sacramento politicians.

Sacramento Politicians Wage War Against California Taxpayers!


Sacramento politicians just raised taxes on all Californians while 1 in 10 is unemployed, foreclosures are at record levels, and people and jobs are leaving the state.

These new taxes will cost the average California family over $1,100 per year.

That’s right, higher sales taxes, higher income taxes and a higher car tax. If you have children, you have lost much of your tax credit for dependents.

Now is the time to fight back! It is time to show Sacramento that “WE THE PEOPLE” are the government. The people we elect are not the bosses, we are!

The Governor and two-thirds of the Legislature have voted to make California taxpayers the highest taxed people in the country for the next two years.

To make matters worse, these same political elitists have placed Proposition 1A on the May 19 special election ballot, which would DOUBLE the damage to taxpayers if passed.

Here is what is important about Proposition 1A: Masked behind a phony spending limit is an extension of the massive tax increase just approved. Proposition 1A means an additional two years, for a total of 4 years of record high taxes. That’s another $16 billion of your money!

THE FACTS:

Prop. 1A will raise taxes on all Californians and extend them for an additional two years, taking another $16 billion from you! The already approved tax increase will cost a typical California family $1,100 annually.

HIGHER SALES TAX! Prop. 1A will extend the sales tax hike for another two years. California taxpayers already pay the highest sales tax in the nation – this is a direct attack on all working families, especially low-income residents.

HIGHER CAR TAX! Prop. 1A will extend the DOUBLING of the car tax. This affects every California car owner.

HIGHER STATE INCOME TAX! Prop. 1A will extend an income tax increase for two extra years. Californians already pay the highest income tax rates in the nation. And now they will collect more from you.

REDUCTION OF TAX CREDIT FOR DEPENDENTS! Californians with children will see a reduction in the tax credits for dependents, costing families $200 per child. Prop. 1A will extend this attack on families for an extra two years.

The Howard Jarvis Taxpayers Association is urging a vote of “NO” on Proposition 1A, which DOUBLES the tax increase!

DECEPTION, FAKE, FRAUD AND A $16 BILLION TAX INCREASE.


DON’T BE DECEIVED by statements that this is a “SPENDING LIMIT” initiative.

Those Sacramento politicians, who made a backroom “deal” to resolve the budget process with a tax increase that will cost the typical California family over $1,100, are offering another deal they hope will fool voters.

What they are offering is a package of measures on the May 19 Special Election ballot that will confirm their tax increase budget. However, the lynchpin of their plans is Proposition 1A.

1A is being promoted as a spending limit that will compel those under the Capitol dome to behave responsibly. This spending limit is a limit in name only because it will automatically go up as taxes are increased by the Legislature.

THE LEGISLATIVE ANALYSTS OFFICE TELLS THE TRUTH ABOUT PROPOSITION 1A


On March 13th the LAO released a budget report containing a graph that clearly illustrates how Proposition 1A would extend California taxes.

CLICK THE GRAPH below to open a larger version.

Prop 1A Chart

Legislative Analyst’s Office says: “Proposition 1A Results in Tax Increases.”


Click here for complete analysis by the California Legislative Analyst.

THE FIRST STEP IN THE NEW CALIFORNIA TAX REVOLT

SPREAD THE WORD with our printable fact sheet. This one-page summary explains in clear English exactly why Proposition 1A means HIGHER TAXES. Print out as many copies as you like and give them to your friends, family and neighbors. Keep one for yourself so you’ll know what to say when people ask you how they should vote on May 19th. You’ll have all the answers right in your hand! Click here to download our Prop. 1A Fact Sheet.

WHAT ELSE IS ON THE BALLOT?


The following are also part of the Sacramento politicians’ budget and tax package:

Prop. 1B: Provides extra funds for schools and community colleges starting in 2011 to compensate for cuts in the current budget.

Prop. 1C: Allows the state to borrow $5 billion against future state lottery sales; allows the state to change the lottery system to generate more revenue and use funds for programs other than education.

Prop. 1D: Allows the state to divert $608 million from Proposition 10 (tobacco tax for children’s health care) to general-fund costs of children’s health care in the fiscal year beginning July 1. The amount drops to $268 million a year from July 1, 2010, to June 30, 2014.

Prop. 1E: Allows the state to divert $230 million a year from Proposition 63 (taxes the wealthy to fund mental health programs) to offset general fund costs of other mental health programs for two years beginning July 1.

WE, THE PEOPLE, ARE THE TAX REVOLT! TOGETHER WE CAN SHOW SACRAMENTO WHO’S BOSS! VOTE “NO” ON PROP. 1A.

Knowledge is power! Get informed, be informed and stay informed.

Related Information
Official “NO on Prop. 1A” Window Sign
“NO on Proposition 1A” Facebook Group
Prop. 1A Fact Sheet.


To see this article on the HJTA web site go here.

A Letter from Steve Poizner to the CRP
Steve Poizner


Steve Poizner today sent the following letter to California Republican Party Chairman Ron Nehring. Steve called on the CRP to formally oppose Proposition 1A on the May 19 ballot.

Steve is vigorously campaigning against Proposition 1A because its passage would result in $16 billion in higher car, income, and sales taxes for an additional two years. A copy of the letter follows:

For the text of the letter, click here.

Sonoma County Analysis

The Republican Party of Sonoma County did a thorough review of the Propositions. They came up with the following information, which I have read and find that I agree with.

The Measures
The measures are set up as a “family”- all measure 1, but with alphabetical sub-designations to divide distinct items as Propositions 1-A through 1-F. This listing tends to produce confusion among the voters on the various parts of the “family” of propositions, making it more difficult for voters to remember which to favor and which to oppose on a divided ballot. It is a way of getting voters to vote on the “package” without looking carefully at the contents. Unfortunately, some will fall for this calculated ruse. The Sonoma County Republican Party thinks the voters are due more than disrespectful ruses from their government. We have looked carefully at each proposition and have come to a common conclusion: it is not just the ballot numbering that is a ruse.

In this election, California voters are facing a barrage of unparalleled falsehoods and misrepresentations. Proponents of these bogus measures called for a May vote hoping for a low voter turnout. Do not be bamboozled. We hope you will vote as we suggest, but at all hazards: VOTE in this election!

Proposition 1-A: THE “RAINY DAY” BUDGET STABILIZATION FUND

VOTE NO on this fraud. If politicians could be prosecuted for deceptive advertising this little item would land a bunch of Sacramento hacks in jail. According to the Secretary of State’s Ballot Label for this proposition, the measure would “limit future deficits by increasing the State’s ‘rainy day’ fund,” but it would also exact “higher state tax revenues of roughly $16 billion.” Yes, Proposition 1-A is nothing less than the authorization of a massive tax increase to deposit in a state “reserve;” but these additional reserve funds are intended to be spent when state revenues drop below the amount “needed” to fund the government. Those who decide how many dollars are “needed” to fund the government also decide when to spend the reserve. In the end, the State “Rainy Day” reserve is nothing more than another pot of money to feed the big government monster.
Proposition 1-B: EDUCATION FUNDING. PAYMENT PLAN
VOTE NO on this “save now – pay later” scheme. The Secretary of State says, “Potential state savings of up to several billion dollars in 2009-10 and 2010-11. Potential state costs of billions of dollars annually thereafter.” Temporary cuts to education made now will be added back to the education budget later and taxpayers will receive the bill for the “repayment.”

Proposition 1-C: LOTTERY MODERNIZATION ACT
VOTE NO on this shell-game gamble. If “modernizing” means increasing the public debt by writing IOU’s in the name of California taxpayers to the California State Lottery, then this could rightfully be considered as a contribution to progress. The State is having problems selling its unsustainable debt instruments to investors, so why not just strongarm some more credit from one of its own public-private partnerships?

Proposition 1-D: CHILDREN’S SERVICES FUNDING
VOTE NO on this bait and switch sham. The California Legislature imposed a tax on cigarettes a few years back on the pretence that the new tax would yield money for early childhood programs. Now, here is that same Legislature in your face telling you that it wants to move that money around in whatever way it sees fit. Make a promise. Find an excuse. Break the promise. See a pattern here?

Proposition 1-E: MENTAL HEALTH FUNDING.
TEMPORARY REALLOCATION
VOTE NO on this hand-is-quicker-than-the-eye scam. Californians voted in 2004 to provide funds for specific mental health services. It was called Proposition 63. Now comes the Legislature to undo the work of the supporters of Proposition 63 by getting what they hope is a forgetful public to take money from that purpose and give it over to another purpose. So much for public earmarks! You may get your wish today, but ultimately all forms of revenue will go to the general fund where politicians can use it to meet their own agendas. Don’t fall for this undermining of the California initiative process.
Proposition 1-F: ELECTED OFFICIALS’ SALARIES. PREVENTS PAY INCREASES DURING BUDGET DEFICIT YEARS
VOTE NO on this sly bit of chicanery. The measure only empowers the Director of Finance to prevent the Citizens Compensation Commission from recommending an increase when a deficit year is declared. Of course, the politicians can still pass their own increases; but even if they don’t, it would be a small loss compared to the big money showered on their campaigns by the unions and other special interests. Why punish our own people for having the courage to represent us?

May Propositions: Fix is in

Dan Baren, Chairman of the Lincoln Club of Orange County and Richard K. Wagner, President of the Lincoln Club of Orange County wrote an article in the Orange County Register. You can read the article here.

Excerpt:

The governor claims these “reforms” will solve California’s current budget crisis and prevent future calamities. He will ominously warn that all hell will break loose if voters fail to pass these initiatives. The governor’s propaganda machine will go largely unanswered – as potential opponents of the initiatives, both from the left (labor unions) and the right (business and taxpayers groups), have tacitly signed on to the deal or are simply sitting this one out.

That’s unfortunate because the initiative package championed by the governor is a sham and does nothing to address the real problems in Sacramento – runaway spending, an ever-increasing tax burden and a budgetary process that is controlled by special interests, namely state employee unions.

Start with their blatantly dishonest packaging. Proposition 1A, the cornerstone measure of the package, asks voters to rubber-stamp one of the largest tax increases in state history. You would never know it by reading the official title of the measure – “Spending Cap Amendment.”

Even worse, the official ballot statement opposing 1A makes no mention of any tax increases. Rather than use the persuasive anti-tax message submitted by the Howard Jarvis Taxpayers Association and Irvine Assemblyman Chuck DeVore, the secretary of state selected an argument authored by labor groups and lamenting that the spending cap will make it too hard for the state to keep spending.

The fix is clearly in.



Other Information on 1A -1F

There are many other articles, but you get the gist.

After reading all of the above material, you have probably come to the conclusion that Propositions 1A -1F should be defeated on May 19th. Do not be fooled by the so-called “spending cap” in Proposition 1A. As you have read above, it is not a true spending cap, and, of course, Proposition 1A extends the higher taxes for an additional two years.

If you still have some questions, or doubts about whether to oppose the Propositions, please feel free to contact me.

Before closing, I would like to address one other issue. I have heard it said that the Republican Party is just the Party of No. That all the Republicans do is oppose other people’s ideas, but don’t have any good ideas of their own.

There was an alternative to the vote of the Legislature to approve the present budget last February. Most Republicans in the legislature knew that. Republicans have presented viable alternatives to the huge budget that the California legislature adopted in February, including myself. It is not true that the only possibility was to adopt the budget presented because there was no way to cut further spending and because the State would have become insolvent. You can read my proposal here.

We are Republicans. We stand for liberty, limited government and low taxes. The Propositions 1A through 1F raise taxes and increase spending, the opposite of what we stand for. Higher taxes decrease Liberty. We need to take a principled stand for what we believe in.

Vote NO on Proposition 1A and on the other Propositions.

Sincerely,


Gary Aminoff
President
San Fernando Valley Republican Club
(310)387-6900
aminoff@sfvrc.org

UPDATE:

Former Los Angeles Mayor, Richard Riordan says May Ballot Propositions are a scam.

Go here to read the article in the Los Angeles Times

Here is an excerpt:

If you think Bernard Madoff is the swindler of the year, stop and consider Gov. Arnold Schwarzenegger and the Legislature, the gang responsible for the ballot measures we’ll be voting on in May.

Let’s start with the misleading titles of their initiatives.

Take Proposition 1B. It’s called “Education Funding. Payment Plan,” but all it really does is allow the Legislature to continue stealing money from education with the promise that the state will kick in $9.3 billion to K-12 education and community colleges starting in 2011.

Or how about Proposition 1C, the “Lottery Modernization Act”? What this measure does is allow the state to borrow against future lottery money to fund this year’s budget. It also promises to improve marketing of the lottery to sell more tickets. But by its nature, the lottery places a disproportionate burden on the poor, who are more likely to buy tickets. It’s hard to see how that’s “modernization.”

Then there’s Proposition 1D, with its clunky and dishonest title: “Protects Children’s Services Funding. Helps Balance State Budget.” How does it “protect” children’s services funding? By taking $1.6 billion currently committed to children’s health services and preschool and throwing it into the budget maw.

Proposition 1E, “Mental Health Services Funding. Temporary Reallocation,” is another travesty. It simply grabs $450 million that voters specifically directed to mental health services.

Additional Update – April 27, 2009

Michael Hiltzik, a Los Angeles Times reporter and analyst, wrote an article today titled,California budget fixes on May 19 ballot are mostly shams and frauds

Excerpt:

One can always tell that a California election is drawing near because commercials lying about ballot propositions start crowding commercials lying about detergents and pharmaceuticals off the TV.

So it is with the May 19 election. Every time I turn on my set, I can already detect the acrid stench of political mendacity billowing into the room. And nearly a month yet to go.

The May ballot features six propositions, dubbed 1A through 1F, that the Legislature concocted to end this year’s embarrassing budget stalemate in Sacramento. The claim is that these measures will finally put state budget procedures on a sane path to “fiscal responsibility.”

How? By undoing some of the excesses of the past and shuffling budgetary powers around a bit, mostly so the governor will get some powers he didn’t have in the past and lose some authority he has today. Are we jazzed yet?

Read the whole article.

It remains obvious to everyone, except the uninformed public, many of whom will be swayed by and believe the deceitful advertisements that unashamedly lie about the Propositions, that these Propositions do nothing to fix the State Budget problems. Time to send the Legislature back to the drawing board to cut the fat. Don’t believe them when they tell you there is no room to cut. Spending by the State Government has increased 50% in the past five years, while the population of California increased 10% during the same period. Why? The State has added 50,000 employees to the State payroll over the past 5 years. Why?

There is room to cut. The problem is the legislators don’t want to offend the special interests that fund the Democratic Party.

Obama Makes U.S. Vulnerable

Frank Gaffney, Jr., President of the Center for Security Policy, and a columnist for the Washington Times has an article today about how the steps that Obama is taking with respect to our national security will not only diminish our power, but will also encourage our enemies to perceive us as less powerful – a very dangerous and vulnerable position for America.

President Obama’s stewardship of the national security portfolio to date amounts to a wrecking operation, a set of policies he must understand will not only weaken the United States but embolden our foes. After all, the Communist agitator Saul Alinsky, a formative influence in Mr. Obama’s early years as a “community organizer,” made Rule Number One in his 1971 book Rules for Radicals: “Power is not only what you have but what the enemy thinks you have.”

According to this logic, the various steps Barack Obama is taking with respect to the armed forces, the foreign battlefields in which they are engaged, our allies as well as our adversaries will not only diminish our power. They will encourage our enemies to perceive us as less powerful – with ominous implications. Consider some illustrative examples:

* The Obama administration is cutting the defense budget by 10%. The result will be to preclude much, if not virtually all, of the modernization that will be required to prepare the U.S. military to contend with tomorrow’s wars. Most of what the Pentagon spends goes to fixed – and growing – personnel-related costs (pay, bonuses, health care, etc.) and operations. As a result, at Obama funding levels, there will not be much available even to “reset” today’s forces by refurbishing the equipment they have been using up in present conflicts.
* The President is on a path to denuclearizing the United States by refusing to modernize the arsenal or even to fund fully the steps necessary to assure the viability of the weapons we have. He hopes to dress up this act of unilateral disarmament by seeking to resume arms control negotiations with Russia, as though such throw-backs to the old Cold War and its bipolar power structure apply today – let alone that there are grounds for believing the Kremlin will adhere to new treaties any better than the previous ones it systematically violated.
* For good measure, Mr. Obama is mounting a frontal assault on the armed forces themselves. The President plans to repeal the law prohibiting homosexuals from serving in the military. It is absolutely predictable that significant numbers of servicemen and women – including many of the most experienced commissioned and non-commissioned officers – will retire rather than serve in conditions of forced intimacy with individuals who may find them sexually attractive. The effect will be to break the all-volunteer force.
* Then there are the Obama initiatives in Iraq and Afghanistan. The President’s adoption of a deadline for withdrawing most U.S. forces from the former and his signaling that – despite a near-term 17,000 troop “surge” – he is preparing to turn the latter over to the oxymoronic-dubbed “moderate” Taliban are conveying unmistakable messages to friends and foes alike: Under Barack Obama, it is better to be a foe of America than one of its friends.

This message is, of course, being strongly reinforced by the treatment he is doling out to nations in each category.

* Friends like the Poles and Czechs have been left in the lurch as the Obama administration intimates that the United States now thinks Europe does not need after all to be defended against Iranian nuclear-armed missile threats. Not since Jimmy Carter abandoned the NATO deployment of so-called “neutron bombs” has a President conveyed such a devastating message of weakness and irresolution in the face of hostile threats to our European alliance partners.
* Other allies have not fared much better. Israel is on notice that its security interests are going to be sacrificed to the Obama administration’s pursuit of a Palestinian state – even one ruled by a terrorist organization like Hamas (or, for that matter, Fatah) committed to Israel’s destruction. Britain has been told it neither deserves nor has a “special” relationship with the United States.
* Meanwhile virtually every enemy of the United States is the object of assiduous cultivation and overtures for rapprochement by the Obama administration. It will reward IranSyria can expect the Golan Heights and removal from the terrorism list even as it pursues nuclear arms, renews its overtly colonial hold on Lebanon, supports the terrorists of Hezbollah and helps its abiding master, Iran, destabilize Iraq. for “going nuclear” with normalized relations.
* As mentioned above, Russia gets to be treated like a superpower again while it arms Iran, inserts bombers and naval units into our hemisphere, wields its energy leverage against our friends in Europe, Ukraine and Georgia and squeezes our supply lines into Afghanisan. There are no repercussions for China as it makes a mockery of the administration’s beloved Law of the Sea Treaty by threatening an unarmed U.S. naval vessel in its Exclusive Economic Zone.
* Last but hardly least, a “respectful” Obama administration seems keen to embrace those in the Muslim Brotherhood and like-minded Islamist organizations who seek to impose the toxic theo-political-legal program authoritative Islam calls Shariah on distant populations – and insinuate it into our country.

Can there be any doubt what America’s adversaries make of all this? Great grief will come our way if they conclude, as Alinsky surely would, that our power is waning, and that they can exercise theirs with impunity against our interests – and those of whatever friends we have left.

President Bush, whatever else you can say about him, was very careful to make sure that our enemies never got a perception of the U.S. as being weak or vulnerable. Is that why we were never attacked after 9-11? Will the actions of this President encourage at attack because we will be perceived as weak? Only time will tell.

Sen Gregg: Obama’s Budget will Bankrupt America

Sen Gregg: Obama’s Budget will Bankrupt America

Sen. Judd Gregg made the following statement today:

“Today’s analysis of the President’s FY 2010 budget by the Congressional Budget Office confirms that under the President’s plan, our debt will increase to shocking levels that are simply unsustainable and will devastate future economic opportunities for our children and grandchildren.

Continue reading “Sen Gregg: Obama’s Budget will Bankrupt America”

Roots of the Crisis

FreedomWorks has done an excellent, well-documented analysis of the roots of the current economic crisis. Their analysis begins in 1913 with the passage of the income tax law and the ability to deduct mortgage interest to encourage the assumption of debt by Americans in the purchase of a home, and continues through October of 2008 when the crisis was fully upon us. Anyone interested in how we got here should read this analysis.

Excerpts:

1965 – The Department of Housing and Urban Development (HUD) is created.

HUD and FHA insure loans for borrowers with insufficient credit, thereby driving down interest rates for low-income borrowers and artificially increasing the amount of housing produced and sold.

1977 – The Community Reinvestment Act (CRA) becomes law

and requires banks to loan to the areas where the banks are located, regardless of the eligibility of potential borrowers. To enforce the statute, government agencies take the information they gather on the banks into consideration when deciding to approve applications for new bank branches or for mergers or acquisitions.

1992 The Clinton Presidency Begins

Government weakens bank lending standards. A now-discredited study published by the Boston Federal Reserve enables Government Sponsored Enterprises Fannie Mae and Freddie Mac to accept lower underwriting standards for mortgages they are seeking to purchase, so they may expand their portfolios, enable private banks to make more loans and influence the housing sector.78

At the same time, Congress weakens Fannie and Freddie standards. The Federal Housing Enterprises Financial Safety and Soundness Act (FHEFSSA) is passed into law. This act mandates that the GSEs increase their acquisition of bank loans made to risky and lower income borrowers. GSE Fannie Mae announces a trillion dollar commitment. Banks know they can meet CRA requirements by giving these loans, and that they will be able to pass the risk of such loans on to the implicitly taxpayer-backed Government Sponsored Enterprises, so they make lower quality loans.

Also in 1992, Countrywide, Wachovia, and others pushed by Federal Reserve publications and other regulations begin loaning to clients with no or bad credit. Lenders are able to pass on the added risk of these loans by selling them to the GSEs, who guarantee, repackage, and sell them as securities with the implicit backing of the government in the case of default.

2003 Corruption at Fannie and Freddie

In 2003, the Federal Reserve lowers interest rates to 1% – the lowest since the 1960s. The rate allows borrowers to borrow at an interest rate lower than the rate of inflation, effectively subsidizing borrowers, encouraging banks and individuals to borrow as much as possible.

President Bush calls for reforming Fannie Mae and Freddie Mac by increasing their capital-reserve requirements, the percentage of liquid assets lending institutions must keep on hand incase of financial trouble.17 Third-party groups call for the two Government Sponsored Enterprises to be fully privatized, rather than the current status which privatizes profits but socializes risk. Congress, heavily lobbied by Fannie Mae and Freddie Mac to oppose the reform, opposes reform.

Frank: “I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis… . I do not think at this point there is a problem with a threat to the Treasury.
— Rep. Barney Frank (D-Mass.), at a hearing in 2003

Read the whole article.

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