BILL ANALYSIS
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THIRD READING
Bill No: SCA 5
Author: Hancock (D)
Amended: As introduced
Vote: 27
SENATE ELEC., REAP. & CONST. AMEND. COMM. : 3-2, 8/25/09
AYES: Hancock, DeSaulnier, Liu
NOES: Walters, Strickland
SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/27/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Denham, Runner, Walters, Wyland
SUBJECT : State budget: vote threshold
SOURCE : Author
DIGEST : This constitutional amendment exempts General
Fund appropriations in the budget bill from the two-thirds
vote requirement. Also provides that statutes enacting the
budget bill and statutes enacting bills identified in the
budget bill as necessary to implement it take effect
immediately.
ANALYSIS : Existing law, pursuant to the California
Constitution, provides that the following types of bills
require a two-thirds vote of each house of the Legislature
for passage: (1) bills that raise taxes, (2) bills
containing an urgency clause, and (3) bills, including the
CONTINUED
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budget bill, that make appropriations from the General
Fund.
Existing law, pursuant to the California Constitution,
provides that a statute takes immediate effect upon
enactment if it calls for an election, provides for a tax
levy or makes an appropriation for the usual and current
expenses of the state, or is an urgency statute.
Background
I. Other states . According to the National Conference of
State Legislatures, some states require an extraordinary
vote to pass general appropriations bills for state
operations. Although they are not spending limits in
the traditional sense, requirements for a supermajority
- two-thirds, three-fourths or three-fifths of the
Legislature - can limit spending decisions if an
agreement cannot be reached.
II. Vote requirements vary . Nine states have some type of
requirement. Three - Arkansas, California and Rhode
Island - need a supermajority vote each budget cycle to
pass appropriations bills. Of the 47 states that
require a simple majority vote, six - Connecticut,
Hawaii, Illinois, Maine, Mississippi and Nebraska -
require a supermajority under certain conditions.
A. Arkansas . A constitutional amendment that became
effective in 1934 requires the Arkansas Legislature
to obtain a three-fourths majority on appropriations
for all purposes except education, highways, and
paying down the state debt. Appropriations for these
purposes require a simple majority of members
elected.
B. California . A constitutional provision dating
back to 1933 requires a two-thirds vote for general
fund appropriations for purposes other than public
schools. Because the Legislature typically passes
one main budget bill, the requirement has effectively
applied to the whole budget bill.
C. Connecticut . Appropriations require a simple
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majority of members elected, unless the general fund
expenditure ceiling is exceeded. In that case, the
Legislature must obtain a three-fifths majority.
D. Hawaii . Appropriations require a simple majority
of members elected, unless the general fund
expenditure ceiling is exceeded. In that case, the
Legislature must obtain a two-thirds majority.
E. Illinois . Since 1994, an amendment to the
Constitution has required a majority vote until June
1 to pass all legislation, including the budget.
After that date, the Legislature must obtain a
three-fifths vote. The intent is to provide an
incentive for the Legislature to complete its work in
a timely fashion before the supermajority is
required. Budgets were passed on time in 1995, 1996
and 1997, but it is not certain that the
supermajority vote is responsible. The previous
requirement, that a three-fifths majority was needed
after June 30, failed to prevent late budgets on a
number of occasions in the 1980s and early 1990s.
F. Maine . A simple majority is required to pass all
bills, and they become effective 90 days after the
Legislature adjourns. If the budget is not passed
before April 1, however, it will not take effect by
July 1, the beginning of the fiscal year. For the
budget to be operative in time, the Legislature must
pass it as an emergency, requiring a two-thirds vote.
Bills passed as emergencies take effect immediately.
G. Nebraska . Similar to Maine, a Nebraska provision
dictates bill effective dates to be 90 legislative
days after they are enacted in odd years. If the
budget is passed after the end of March in an
extended session, an emergency clause requiring a
two-thirds vote is attached to make it operative at
the beginning of the fiscal year.
H. Rhode Island . For appropriations for local or
private purposes, a two-thirds majority vote is
required. Because the state typically drafts all
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main appropriations bills for operations into a
single budget bill, a two-thirds vote has been
effectively necessary for all appropriations.
III. California Constitution Revision Commission . In its
1996 Final Report and Recommendations to the Governor
and the Legislature, the California Constitution
Revision Commission stated the following regarding the
existing two-thirds vote requirement to approve a state
budget:
Currently, all General Fund appropriations, except those
for public schools, must be approved by a two-thirds
vote of both houses of the Legislature. This
requirement dates back to a 1933 amendment that required
a two-thirds vote on the budget bill if General Fund
appropriations grew by more than five percent. Since
budget growth after 1933 almost always exceeded five
percent, the practical effect was to routinely require a
two-thirds vote for passage of budget bills. A 1962
amendment removed the five percent formula, and simply
required a two-thirds vote on the budget.
In theory, a two-thirds vote would encourage a
compromise between the majority and minority parties.
For a number of years, the system worked in this manner.
Recently, however, it has permitted those who have
specific interests, which may or may not be related to
the budget, to delay passage of the budget by leveraging
their issue into the budget debate.
In 1993, the Citizens Budget Commission found that long
budget delays, where a small group of legislators were
able to stall budget adoption, caused higher levels of
spending. The Constitution Revision Commission agreed
with that finding. Although conventional wisdom
indicates otherwise, the two-thirds vote requirement
does not seem to limit higher levels of spending. In
practice, it encourages it.
The Constitution Revision Commission concluded that
requiring a majority vote is the most equitable way to
deal with increasing demand in an era of scarce
resources. The Commission believes that with its
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recommendations related to balancing the budget,
restricting borrowing, and requiring a reserve built
into the budget process to provide more fiscal
discipline, a majority vote for enactment of the budget
is appropriate. The majority vote recommendation
applies to enactment of the budget, budget
implementation bill, and rebalancing bill. The
Commission recommends maintaining the requirement for a
two-thirds vote for any tax increase. Therefore,
program expenditures may be adjusted by a majority vote
and the taxpayers maintain their protection of a
two-thirds vote on the imposition of new taxes.
Related legislation . Numerous measures have been
introduced this session to address the vote threshold for a
state budget although this constitutional amendment is the
first to be heard in a policy committee. Others are:
SCA 1 (Walters) provides that the budget may be approved
with a majority vote if the total amount of General Fund
appropriations for that fiscal does not increase more than
five percent from the immediately preceding fiscal year.
SCA 9 (Ducheny) lowers the vote threshold in each house to
approve the budget bill to 55 percent.
SCA 15 (Calderon) lowers the vote threshold in each house
to approve the budget from two-thirds to a majority.
SCA 22 (Wolk and DeSaulnier) lowers the vote threshold to
approve the budget to a majority vote if the budget does
not exceed the appropriations limit (as adjusted for the
change in the cost of living and population) or does not
exceed 105 percent of the previous year's General Fund
appropriations. It also lowers the vote threshold to raise
revenue as long as the revenue generated does not exceed
the appropriations limit or 105 percent of the previous
fiscal year.
ACA 4 (Bass) lowers the vote threshold in each house to
approve the budget from two-thirds to a majority.
ACA 18 (Evans) lowers the vote threshold in each house to
approve the budget from two-thirds to a majority.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/31/09)
American Federation of State, County and Municipal
Employees
California Communities United Institute
California Nurses Association
California Professional Firefighters
California School Employees Association
California State PTA
Small School Districts Association
State Building Construction and Trades Council, AFL-CIO
OPPOSITION : (Verified 8/31/09)
California Taxpayers' Association
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author's office,
16 of the last 20 budgets have been late. The budget
gridlock is directly linked to a rule in the Constitution
that requires a two-thirds vote by the Legislature to send
the Governor a budget.
California's two-thirds requirement allows a small minority
of legislators to hold up the passage of the budget.
California's two-thirds requirement concentrates power not
with the majority of legislators elected by the People of
California but in the hands of a few who often extract
non-budget related policy concessions. The two-thirds
requirement makes it difficult for the public to understand
why budget decisions are made. A majority vote will
provide transparency and clarify for the public who is
making decisions and should be held accountable.
The two-thirds vote requirement is an unusual rule. The
United States Congress requires a simple majority vote.
Every city, county and local government agency in
California only requires a majority vote to pass a budget.
The vast majority of states require a simple majority vote.
Only three states, including California, always require
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more than a majority vote to approve a budget. The
two-thirds vote requirement is, without exception, the
primary reason why the budget is consistently late. There
is still debate in a majority vote system but not the same
kind of gridlock created by allowing a minority of
legislators to dominate the budget process. Californians
want an on-time and responsible budget. In a democracy,
the majority ought to determine how to raise and spend the
money we use to buy together what we cannot afford to buy
separately - schools, roads, bus and train systems, police
and fire protection.
ARGUMENTS IN OPPOSITION : The Howard Jarvis Taxpayers
Association states: "Traditionally, there has been
longstanding support for the two-thirds vote across
California. Voters made it very clear with Proposition 56
in 2004 that they do not want to see the two-thirds vote
for either the budget or special taxes to be decreased.
Proposition 56 was defeated by a nearly 2:1 margin. Even
though it didn't deal solely with the state budget, we
believe this is enough of a litmus test to demonstrate
where voters stand on this issue. Changing the threshold
now would seem to be unwarranted."
DLW:mw 8/26/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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