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Voters Like Spending Cap but Not Its Cost

Polls find support for Prop. 76 fades when effects on schools and healthcare are cited.

October 07, 2005|Evan Halper | Times Staff Writer

SACRAMENTO — The November ballot measure that promises to end rivers of red ink and dysfunction in the state budget system is proving to be a tough sell for Gov. Arnold Schwarzenegger.

The Republican governor is pitching Proposition 76, which he calls the "Live Within Our Means Act," as the best way out of California's chronic deficits. But voters appear to lose interest when they learn of the sacrifices that will be needed to allow the state to truly live within its means.

The measure makes clear that it can't be done without limiting spending on the education and healthcare programs that account for more than three-quarters of the state's general fund.

"Voters like the idea of government living within its means," said Mark Baldassare, director of research for the Public Policy Institute of California. But "when you tell them the specific places that take up most of the budget and would need to be cut, they are not areas where people are comfortable with the state scaling back."

A large chunk of voters -- 49%, according to Baldassare's polls -- said they wanted spending controls. But once they heard the title that Democratic state Atty. Gen. Bill Lockyer had given the measure -- "The State Spending and School Funding Limits Initiative" -- the number dropped to 26%.

"The fact that 'school funding limits' is mentioned raises a lot of concerns for people," Baldassare said.

The governor is trying to shift the focus elsewhere. On the stump, he is focusing on how the proposal would outlaw spending binges.

Even if the economy boomed and revenues surged, the measure would restrict spending increases to no more than the average increase in state revenues over the previous three years. That would leave a rainy-day fund that could help the state ride out a recession.

"This is a fight between moving on and fixing a broken system and the status quo," the governor told a group of seniors in Escondido on Friday. Many of them nodded in approval.

Tom Campbell, who is on leave from his post as the state's budget chief to campaign for the measure, said in an interview: "People appreciate the notion that the state should not spend more than it has. They appreciate the common sense of it."

Voters also are hearing from firefighters, nurses and top officials in Los Angeles, San Francisco and other urban areas that the spending cap could lead to cuts in emergency services and payments to community clinics, and more trouble at public hospitals.

And it tampers with the popular school-funding formulas voters put in place by passing Proposition 98. That 1988 law guarantees education a certain share of state revenue each year.

The funding formula cannot coexist with the spending cap, most analysts said; education could eventually gobble up too much of the budget. So Proposition 76 lowers the amount guaranteed for schools.

Educators said that would be devastating.

"This eviscerates Prop. 98," said Jack O'Connell, state superintendent of public instruction. "There would be less money for education. It is undeniable."

School groups have blanketed the airwaves with television and radio ads saying as much. "It cuts billions needed for new teachers, books and supplies," says one anti-76 spot.

Educators have been attacking the governor for months, saying that he had reneged on a promise to repay billions borrowed from schools in 2004 to help balance the budget.

The governor has denied that money for schools -- more than 40% of the state budget -- would be cut under Proposition 76. The governor has begun telling voters that money to schools could actually increase.

"More money goes to the school system if you vote yes," Schwarzenegger said in Escondido.

He was citing a white paper released by the business-backed California Taxpayers Assn. The report assumes that the Legislature will allocate more money than required once the funding formulas are changed, because Proposition 76 would give lawmakers the flexibility to add more without making the increase permanent.

The ballot analysis voters are receiving in the mail reaches the opposite conclusion. That analysis, from the nonpartisan legislative analyst's office, said schools would be guaranteed at least $3.8 billion a year less than under the current system.

Not all the analyst's findings were bad news for the governor. The analysis also said the measure would, as intended, keep the state from spending more than it brings in.

"This initiative would make it difficult to deficit-spend," said Brad Williams, the office's director of fiscal forecasting. "Over time, it would result in lower spending."

That has been the result in other states with caps. Colorado is often cited as an example of a state where a strict spending cap brought a budget under control.

When Colorado's economy went through its last boom, lawmakers were restricted from putting all the new money into ongoing programs. Instead, a reserve was built, and taxpayers received substantial refund checks.

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