Vindicated & The New Tax Revolt

First a quick video.  A bit of crowing perhaps:

Now the real meat of the story:

California lawmakers are struggling to spin the results of the May 19 special election, fearful of the possibility that the voters may have just fired the first shot of the next great tax revolt.

I was on NPR with Senate President pro Tem Darrell Steinberg (D-Sacramento) the day after the election as he labored to claim that the Tuesday vote was all about frustrated voters, worried about their jobs who simply want the legislature to do its job and not pass the buck to them. He rejected my contention that the vote was an anti-tax vote.

But election-eve polls tell a different story, with California voters seeing themselves as over-taxed and very desirous of cuts in state spending. Polls are nice, but actual votes are better. While Prop. 1A lost by almost 32 points, it lost in fiscally conservative Orange County by almost 53 points while, in the early returns, it was passing in only one of California’s 58 counties: San Francisco. In the end, the most liberal California county, San Francisco, was the kindest to Prop. 1A, turning it down by barely more than six points. A 50-point spread in votes between Orange County and San Francisco County cannot be explained away by Sen. Steinberg’s attempt at damage control.

Gov. Schwarzenegger and the four legislative leaders, the “Big Five,” put this special election together with only Sacramento interests in mind, thinking the public sector unions that might be afraid of even a modest budget restraint tool would be bought off by the prospects of higher taxes. It mostly worked, with some unions enthusiastically supporting Prop. 1A and only a few opposed. But the Big Five forgot the most important special interest: the voters.

In spite of spending $26 million to bully and warn Californians into approving the five propositions, with opponents only marshalling $4 million, every budget-related proposition lost with the strongest showing a pitiful 37.4 percent “yes” vote for proposition 1B, a measure heavily backed by the powerful California Teachers Association union.

California now faces a $21.3 billion deficit over 15 months, with general fund revenues projected to be about $86 billion in 2009-10, down from $102.6 billion in 2007. Democrats face an interesting dilemma. They can do one of three things:

• Do they reform government, trimming unpopular expenses, such as the state’s bloated welfare rolls with California spending three times the national average on welfare due to our overly loose rules regarding work requirements and aid to illegal immigrant families?
• Do they slash and burn popular programs such as education and law enforcement?
• Do they try another end-run on the state constitution, enacting billions in new taxes with a simple majority vote by simply declaring them to be “fees”?

Based on my discussions with Democrat lawmakers, I do not expect any attempt at meaningful spending reform. Rather, dramatic reductions in popular programs such as K-12 education and law enforcement seem more likely, with the Democrats in the mood to tell the voters: “These painful cuts are the result of you voters voting against higher taxes.” If the public sector employee unions mobilize against this move, then the final outcome may well be another massive tax hike masquerading under the legal fig leaf of “fees.”

Either outcome would likely see California voters, recently mobilized under the banner of more than 50 tea parties in April (I had the honor addressing the tea parties in Pasadena and Modesto), organizing to make 2010 a repeat of the historic 1978 election by qualifying new tax and spending limitations for the ballot. Were that to occur, it would shake the foundation of the political establishment from the Pacific to the Atlantic.

Observers of California politics know that I opposed the budget deal that led to this special election. I stood up to my own party leadership, and I resigned as Assembly Minority Whip rather than support a deeply flawed deal — the only Assembly Republican to pay a political price for doing so. Though vindicated by events, I take no pleasure in the knowledge. Our beloved state is on the precipice, and whether it pulls back or plunges over is now in the hands of the men and women who brought it there.