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Proposition 2

By J.T. Francis

What is Proposition 2?

Proposition 2 is State Budget. Budget Stabilization


Account. Legislative Constitutional Amendment. It is
designed to change how the state pays down debt
and saves money in reserves. It amends the State
Constitution to end the existing rules for a state
budget reserve, and replace them with new rules. If it
passes, a new state law would go into effect that sets
the maximum budget reserves school districts can
keep at the local level in some future years. It also
places in the Constitution an existing requirement for
the Governors budget staff to estimate future state
General Fund revenues and spending.

How will this affect us? Details


Below
Proposition 2 will:
- Require annul transfer of 1.5% of general fund revenues to
state budget stabilization account
- Require additional transfer of personal capital gains tax
revenues exceeding 8% of general fund revenues to budget
stabilization account and, under certain conditions, a
dedicated K-14 school reserve fund
- Require that half the budget stabilization account revenues
be used to repay state debts and unfunded liabilities
- Allow limited use of funds in case of emergency or if there is
a state budget deficit
- Caps budget stabilization account at 10% of general fund
revenues, directs remainder to infrastructure

Fiscal Impact
Some

existing state debts would be paid


down faster, resulting in long-term
savings for the state.
Changes in the level of state budget
reserves, which would depend on the
economy and future decisions by the
Governor and the Legislature.
Reserves kept by some school districts
would be smaller.

Arguments in Favor of
Proposition 2
Supporters Say:
Prop. 2 establishes a strong
constitutional reserve fund, which will
force state government to save money
and pay down debts.
Prop. 2 will shield taxpayers from
unnecessary tax increases and protect
schools from devastating cuts.

Arguments in Favor of
Proposition 2 (cont.)
Supporters

of Prop. 2 believe that it will


force legislators to "live within their
means" and will protect citizens from
unnecessary tax increases. They say
that the budget deficit of several years
ago required the Legislature to make
education cuts and that must be
avoided in the future.

Arguments in Favor of
Proposition 2 (cont.)
http://votersedge.org/california/ballot

-measures/2014/november/prop-2

(Above

is well-written, compelling
argument in favor of proposition 2)

Who Supports This?


1 UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA
(UBC)
2 CALIFORNIA ASSOCIATION OF HOSPITALS AND HEALTH SYSTEMS
(CAHHS)
3 NETFLIX
4 AMERICAN COUNCIL OF ENGINEERING COMPANIES
5 HEALTH NET
6 STATE BUILDING & CONSTRUCTION TRADES COUNCIL OF CALIFORNIA
(SBCTC)
7 INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES (IUPAT)
8 INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL
AND REINFORCING IRON WORKERS
9 SPO PARTNERS & CO
10 ABRAXIS BIOSCIENCE

Bibliography
California

General Election
https://cavotes.org/vote/election/2014/
november/4/ballot-measure/proposition-2
http://votersedge.org/california/ballot
-measures/2014/november/prop-2
http://www.californiachoices.org/proposit
ion-2
http://www.lwvbae.org/league-news/leagu
e-election-publications-on-line/