Assembly Speaker Karen Bass proposes majority budget bill ACA 4.

The Speaker of the California State Assembly Karen Bass announced her proposal, ACA 4, which would require only a majority vote to pass a budget bill.  The bill doesn’t change the 2/3 majority requirement to raise taxes, which begs the question- What is the point of being able to pass spending increases without the ability to pass tax increases?

Read the text of ACA 4 here.

The following press release was issued today regarding ACA 4:

California’s Assembly Speaker Karen Bass (D-Los Angeles), Senate President pro Tem Darrell Steinberg (D-Sacramento) and Assemblymember Jerry Hill (D-South San Francisco) today introduced ACA 4, to let voters decide if they want to change California’s two-thirds budget vote requirement to that of a simple majority, promoting on-time budgets and reflecting the budgeting method of 47 other states. If the legislature cannot then pass a budget with a majority vote by the June 15th constitutional deadline, ACA 4 would still require the two-thirds vote to pass the budget after that date.

Speaker Bass today reiterated why the two-thirds budget vote requirement needs to be lowered if California is going to responsibly address its fiscal challenges:

“After seeing the damage the two-thirds requirement caused small business owners, students and other Californians during the budget delay last summer and seeing the increased costs the two-thirds requirement is causing the state now by blocking responsible solutions to the current budget crisis, I have introduced legislation to address the two-thirds vote requirement to help bring California in line with 47 other states who follow majority vote budgeting.”

Senate pro Tem Darrell Steinberg also sees lowering the vote requirement as important to California’s fiscal health:

“Californians of all ideologies can see that the state’s budget process is antiquated and in desperate need of reform. The State Senate will make necessary changes to the way we craft a budget this year, but changing the two-thirds budget vote requirement to majority vote is crucial to getting California’s fiscal house in order for the long run.”

ACA 4 does not change the two-thirds vote requirement to pass any new revenue bills.

Listen to the Speaker talk about the proposal’s effect on taxes.

Analysis: How will the Legislature pass a balanced budget?

The Legislative Democrats have been traditionally sharply opposed to budgetary cuts.  ACA 4, if approved, does not allow them to overcome the Republican vote against tax increases.  They will have the ability to increase spending but not to increase taxes.  How will they balance the budget?

By borrowing the money.

If the Legislature passes an unbalanced budget, money has to be borrowed to make up the disparity between tax revenue and spending.  Bonds will have to be issued for the State to maintain it’s current spending levels.  The state could slowly borrow it’s way to insolvency.

Why didn’t the Speaker go the whole way with ACA 4?

It makes sense to either give the majority the ability to dictate all parts of the budget, or to leave the system as it is, but to allow the legislature to increase spending without the ability to increase taxes is nonsense.  It needs to be one way or the other.  This recommendation is irresponsible.