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Latest News

March 03, 2004

Proposition Results

Yesterday California voters passed the most significant borrowing propositions ever placed on a state ballot. Both Proposition 55 (with less than 60,000 votes) and Proposition 57 passed. Proposition 58 – the so-called balanced budget companion measure to Proposition 57 – also passed. However, Proposition 56 failed. What do these results mean?

Passage of Proposition 55 means there will be sufficient state matching funds to continue the current school construction and modernization projects for school districts which are eligible.

The passage of Propositions 57 and 58, by such overwhelming numbers, strengthened the Governors’ negotiating position with the Legislature. Although there was no well-funded organized opposition to Propositions 57 and 58, the vote of landslide proportions, after both propositions were at risk just four weeks ago, shows the political strength and salesmanship skills of Governor Schwarzenegger.

For schools, passage of Propositions 57 and 58 mean the Governor’s budget and current year funding will be protected. Do not expect cuts nor significant increases for school funding compared to the dollar levels in the Governor’s proposed budget.

The failure of Proposition 56, which would have lowered the legislative voting threshold to pass a budget to 55%, places the Legislature in a less advantageous negotiating position with Governor Schwarzenegger. The effect will be a continued conflict between closing the structural budget deficit with simply borrowing and program cuts compared to including tax increases as a means of achieving balance.

Undoubtedly, there will be more political analysis during the next two weeks with the resolution of the workers compensation issue as the biggest indicator of future legislative and executive power relationship. This will become the next test battleground between the Democrat-controlled Legislature and Governor Schwarzenegger.