Live from The Sacramento Bee, It's Election Night.

CARL COSTAS / ccostas@sacbee.com

WINNING SIDE: State Sen. George Runner, R-Lancaster, left, watches early returns on the voting Tuesday for Proposition 1A with David Wolfe, legislative director of the Howard Jarvis Taxpayers Association, at the Hyatt Regency Sacramento.

Capitol and California - Elections
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Rejection at polls deepens the deficit to $21.3 billion

Published: Wednesday, May. 20, 2009 - 12:00 am | Page 1A

California voters gave an emphatic thumbs-down Tuesday to five ballot measures that elected leaders were banking on to help plug a gaping hole in the state budget.

With about 72 percent of the state's precincts reporting, Propositions 1A through 1E were being crushed by margins as wide as 30 percentage points, and none was winning more than 40 percent approval.

Only Proposition 1F, which will freeze the pay rates of state elected officials in down budget years, won. And reflecting voters' anger with almost all things legislative and gubernatorial, it won big.

"It's a rejection of the status quo," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, which was part of a confederation of groups that opposed the first five ballot measures.

" 'No' is going to be a new word in the lexicon of many of our elected leaders … they are going to have to tell their constituents that the state's spending has to stop."

The defeat of Propositions 1A through 1E means the state budget's $15.4 billion river of red ink will deepen to a projected $21.3 billion.

That's because 1C, 1D and 1E included $5.9 billion officials had hoped to borrow from the state lottery and special funds for children's development and mental health programs, but needed voters' permission to do so.

Gov. Arnold Schwarzenegger, who with legislative leaders was one of the biggest cheerleaders for the measures, was in Washington, D.C., Tuesday.

"The voters have spoken and they are telling us that government should do the best it can with the money it has," the governor said in a prepared statement. "We will immediately and responsibly get to work to balance the budget and head off a cash crisis in July. Delay is not an option."

Schwarzenegger and the leaders of the four legislative caucuses – collectively referred to as the Big Five – were scheduled to begin talks this afternoon about the latest iteration of the budget gap.

Last week the governor proposed that should the measures fail, the lost revenue would be made up by cutting an additional $2.3 billion for elementary and high schools and community colleges; borrowing $2 billion from cities and counties; transferring some state prison inmates to county jails and some illegal immigrant prisoners to federal custody; and slicing deeper into health, social services and other programs.

Legislative leaders in both parties have been reluctant to immediately embrace the governor's proposals, although further tax-increase efforts appear to be dead on arrival.

Schwarzenegger has already said he will not support another round of tax hikes, a sentiment echoed by GOP legislative leaders.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Tuesday night he didn't know if Democrats would pursue tax increases.

"We're going to get up tomorrow morning, dust ourselves off and get right to work," Steinberg said.

Legislators and the governor agreed to $12.8 billion worth of tax increases in February as part of a fragile and excruciatingly convoluted plan to close a $40 billion deficit in the state budgets for the current fiscal year and the one that begins July 1.

The ballot measures on Tuesday's ballot were created as part of the plan.

Proposition 1A was put in the package at the behest of GOP lawmakers and the governor. It would have created a "rainy-day" reserve fund and restricted state spending in bountiful budget years.

That idea didn't sit well with some of the state's most powerful and well-heeled labor unions, which opposed any restrictions that might keep money from being spent that would benefit their members.

To prevent the unions from campaigning to defeat 1A, legislators included $16 billion worth of temporary taxes, which union leaders favored as a way of assuring the state had enough revenue to limit spending cuts that might affect the unions' members.

But the taxes didn't mollify all the unions, and in fact became the focal point of opposition to 1A from anti-tax groups and others.


Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076. Jim Sanders and Dan Walters of The Bee Capitol Bureau contributed to this report.


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