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April 29, 2009 > Why is there a Special Election on May 19?

Why is there a Special Election on May 19?

By Simon Wong

A special election primary to find a successor to Rep. Hilda Solis, following her appointment as Labor Secretary in the Obama administration in February, is set for May 19. The candidate with a majority vote will secure the US House of Representatives seat in California's 32nd Congressional District. If there is no clear winner, each party's candidate with the most primary votes will compete in a special general election on July 14.

The primary coincides with state-wide elections for six state propositions plus local measures. The state measures amend the State Constitution and other state laws and help balance the budget.

STATE MEASURES

Proposition 1A
Changes budget process. Limits state spending. Increases the "Rainy Day" Budget Stabilization Fund (BSF)

* Budgeted spending in a given year will be based on the past decade's revenues rather than prevailing economic conditions. Reduces volatility in spending.

* Extends Feb 2009 budget package tax increases by up to two years to raise an extra $16 billion, specifically, sales & use tax until the end of FY2011-12 and vehicle license fee and personal income tax through FY2012-13.

* Increases the Governor's authority to reduce some spending without additional legislative approval which, currently, must be sought once the annual budget is passed.

* If both Props. 1A and 1B pass, K-12 schools and community colleges will receive $9.3 billion to compensate for recent budget cuts.

* After payment of the educational funds, or if Prop. 1B does not pass, 1.5% of annual state revenues will fund infrastructure projects and repayment of state bond debt (Economic Recovery Bonds).

* Transfers to the BSF may only be suspended under limited circumstances. Currently, the Governor can suspend transfers in any year to help balance the budget. Annual transfers to the BSF cease once the BSF's balance reaches the higher of $8 billion or 5% of the state's revenues. Prop. 1A raises the threshold from 5% to 12.5% and limits withdrawal of these contingency funds. A certain proportion of the annual receipts to the BSF will cushion future economic recessions. The remainder will fund education, infrastructure and repay debt/bonds or be used in a declared emergency (as described above).

Proposition 1B
Education Funding. Payment Plan.

* Changes the State Constitution for Prop. 98 which requires state-provision of annual, minimum funding for K-14 according to one of three funding formulae. The state may override the formula by suspending Prop. 98 in any given year and pay less than required, but must make up the shortfall, or "maintenance factor," in subsequent years with extra payments.

* Requires supplementary payments of $9.3 billion to school districts and community colleges to address recent funding reductions and replace maintenance factor obligations for FY2007-08 and FY2008-09. The FY2008-09 figure is unknown.

* Annual payments from the BSF start in FY2011-12 until the entire sum is paid regardless of the state's annual fiscal position. The Governor cannot suspend these payments.

* Proportionate payments to local school districts will be based on average daily attendance. Funds received may be used for classroom instruction, textbooks and other local educational programs.

* Linked to Prop. 1A. If Prop. 1A does not pass, supplementary payments of $9.3 billion will not be made.

* Short-term savings of several billion dollars are expected from postponement of maintenance factor payments in FY2009-10 and FY2010-11.

* In the long-run, payment of the $9.3 billion would occur over five to six years. In most scenarios, K-14 education costs are likely to increase, potentially by billions of dollars each year.

* There is uncertainty and debate over the benefits and costs of Prop. 1B and interpretation of the State Constitution.

Proposition 1C
Lottery Modernization Act

* State to maintain ownership of the lottery.

* Allows the state to borrow $5 billion from lottery investors to help balance the FY2009-10 budget. Borrowing permitted in future years with no limit on the amount. Investors will be repaid with interest from future lottery profits. Currently, state borrowing is prohibited.

* California State Lottery Commission will have flexibility to set prizes above the current 50% level of lottery sales to maximize profits. Higher prize payouts can attract more spending for lottery tickets and increase profits.

* Lottery funding for educational institutions will cease from FY2009-10. Lottery profits will repay loans to the state, first, then be applied to state debts and budgetary obligations.

* Requires greater General Fund payments to school and community college districts and universities to replace the loss of lottery funds, as per an increased Prop. 98 guarantee. General Fund financing for education is likely grow more quickly than existing lottery payments.

* Increases annual funding for the Office of Problem Gambling from $250,000 to $1M for awareness and counseling programs.

* Lottery profits expected to increase by hundreds of millions dollars each year.

Proposition 1D
Protects children's services funding. Helps Balance state budget.

* Amends California Children & Families (First 5) Act (Prop. 10, 1998). Allows temporary, annual redirection of $268M of Prop. 10's future tobacco tax revenues between FY2009-10 and FY 2013-2014 for continuity of other state programs for children up to age five.

* Permits appropriation of up to $340M of the California Children & Families (First 5) Commission's reserves, as of July1, 2009.

* Counties may borrow First 5 funds for local priorities but must repay the loan with interest.

* Appropriation of these revenues and reserves provides a one-time $608M General Fund saving and an annual $268M offset, thereafter, for four years and helps balance the state budget.

* This results in equivalent funding reductions for First 5 early childhood development programs.

Proposition 1E
Mental health services funding. Temporary reallocation. Helps balance state budget.

* Amends Mental Health Services Act (Proposition 63, 2004) to temporarily transfer $226.7M in FY2009-10 and $226.7M-$234M in FY2020-11 from Prop. 63 mental health programs to Early and Periodic Screening Diagnosis and Treatment Program (EPSDT) mental health services for Medi-Cal beneficiaries under age 21.

* Prop. 63 funds community services, mental health workforce education and training, capital facilities and technology, prevention and early prevention and innovation programs.

* The EPSDT is a federal program. The California Department of Mental Health contracts with counties to provide children and young adults with a range of medical services including mental health services. EPSDT mental health services cost more than $1 billion annually. The federal government provides half the funding; the state, most of the remainder and counties, a small share.

* Prop. 63 revenues would offset the state's costs by $230M per annum for two years and help balance the budget. Prop. 63 funding would fall by the same amount.

Proposition 1F
Elected officials' salaries. Prevents pay increases during budget deficit years.

* Amends the state Constitution to prevent salary increases of elected state officials in fiscal years ending with a budget deficit.

* Directs the California Citizens Compensation Commission (created by Prop. 112, 1990) to consider the state's economic condition, with existing criteria, when it annualy reviews state officials' salaries and benefits. Prop. 6, 1972, prevents salary reductions during an elected official's term of office.

* Requires the state Director of Finance to inform the commission, on or before June 1, if the state will end the fiscal year in deficit on June 30.

* Minor savings expected. The commission does not raise salaries every year and the approved increases, less than the rate of inflation, have not always been the same. A 3% increase for all elected state officials amounts to $480,000.

LOCAL MEASURES

City of Hayward
Measure A - General utility user tax.

* 5.5% general utility user tax for 10 years on gas, electricity, video services (including cable television) and telecommunications (landline and cell phone). Measure expires on June 30, 2019, unless re-approved by voters.

* Annual tax revenues of $13.2M expected.

* Revenue is required to offset the decline in property and sales tax revenues and maintain essential public services including police, fire, paramedic services, disaster preparedness, economic development, youth/anti-gang programs, library, and public works.

* Exemptions for low-income and Lifeline consumers.

* 100% of Measure A funds will go Hayward (zero appropriations by state or county)

* Requires a majority vote.


Polls open from 7am to 8pm on Election Day, Tuesday, May 19, 2009. For details of where and how to vote, visit the Alameda County Registrar of Voters website at www.acgov.org/rov or the Santa Clara County Registrar of Voters website at www.sccvote.org/portal/site/rov/

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