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Sacred pots tie up taxes

GEORGE SKELTON / CAPITOL JOURNAL

May 29, 2008|GEORGE SKELTON

SACRAMENTO — Money, money everywhere and not a buck to spend -- at least from the barrels of billions locked up by ballot-box budgeting.

That money can only be spent on specific programs previously approved by voters. It can't be used to help balance the books in Sacramento or pay down the state's rising debt or avoid slashing programs for the elderly poor and disabled.


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Ballot-box budgeting usually involves a noble cause with an ignoble means: snatching a tax source or raiding the treasury at the expense of other public needs.

The frequent knock on the Legislature is that it won't get off the dime and do something, so the people are forced to act through the initiative process.

But often there's a reason the Legislature balks. It is because the proposed action would not be smart, particularly if it creates another spending program. There might be a better use for the money.

Ten years ago, voters narrowly approved filmmaker Rob Reiner's Proposition 10 to raise the cigarette tax by 50 cents a pack to pay for early childhood development. That program has more than $2.4 billion sitting idle.

In 2002, actor Arnold Schwarzenegger positioned himself to run for governor by successfully sponsoring Proposition 49 to create after-school programs. It has $300 million lying unused.

At least Reiner's initiative generated its own money source: the tobacco tax. But as a harbinger of Schwarzenegger's governorship, Prop. 49 spent money without raising any. It merely became another drain on the state's debt-ridden general fund.

In 2004, state Sen. Darrell Steinberg (D-Sacramento) pushed through Proposition 63 to sock million-dollar incomes with an extra 1% tax for community mental healthcare. That program has $658 million stashed and unallocated.

There's more tax money scattered around in sacred pots, most of it protected from politicians -- the people's representatives, who are thus restricted in setting spending priorities. It's one reason the state is staring at a $15-billion deficit.

Schwarzenegger, to his credit, is proposing that voters in November be allowed to free up some of the after-school money.

He wants to spend $100 million of the surplus on classroom repairs and another $178 million for various school programs and child care. He'd also reduce the $550-million after-school budget by $59 million next year. And he'd change the spending formula so, in bad times, after-school programs automatically would get the same hits as the rest of education.

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