Initiative Update:
New Initiative Would Effectively Prohibit Future Tax Reductions

The law firm of Remcho, Johansen & Purcell, LLP, whose past clients include the California Teachers Association, the California Nurses Association, and the Service Employees International Union, has filed a "budget reform" initiative that would prohibit any significant tax reduction in the future, other than those accomplished by the public via the initiative process.

The proposal (11-0009) requires all legislation, the governor's budget proposal and any ballot proposition sponsored by the Legislature to identify state program cuts or additional revenue if a proposed tax reduction would result in a revenue loss of $25 million or more. (CalTax: In other words, even if the state had a multibillion-dollar surplus, the governor and Legislature couldn't reduce taxes unless they also cut spending by a like amount! Whether or not a measure crossed the $25 million threshold would be based purely on revenue estimates, which could be subject to manipulation.)

The initiative also includes provisions requiring the budget bill and bills related to the budget to be in print for at least three days before votes could occur, requiring a two-year budget cycle based on long-term budget impacts, and granting the governor power to make mid-year budget cuts by issuing an executive order.

April 8, 2011
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