Prop. 1E Pushes Voters To Reconsider Spending Priorities

by George Lauer

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Five years ago, California voters thought it was a good idea to tax the wealthiest residents of the state to provide mental health services for the not-so-wealthy.

Now the governor and state legislators are asking voters to think again.

Proposition 1E on the May 19 ballot would divert $226.7 million in Proposition 63 funds in the fiscal year starting July 1 and up to $234 million the year after.  The money would be used to pay for already-existing federally mandated mental health services for Medi-Cal beneficiaries under age 21.

Opponents say undermining mental health programs will increase demands on already overburdened jails and prisons and will ultimately cost the state more money in the long run.

Proponents say the money, even though it's a relatively small portion of the anticipated deficit, is needed now to help the state avert financial crisis.

Former Brothers-In-Arms Now Opposed … Sort Of

The political battle first over creating a tax for California millionaires and now over how to spend that money spawned a mini-drama within the larger picture. The two co-authors of Proposition 63 in 2004 are now on opposite sides of the ballot in 2009.

Before becoming Senate President Pro Tempore, Darrell Steinberg (D-Sacramento) helped write Proposition 63 and was one of the initiative's loudest, most visible champions.

Now, in his new leadership position, he has become a leading -- although not particularly willing -- proponent of Proposition 1E. 

"If these were ordinary times, I don't think I could support this," Steinberg said.  "For goodness sakes, I've spent years of my life fighting to increase funding for mental health and co-authored Proposition 63.  But, these are not ordinary times.  California desperately needs these dollars to get through these difficult economic times."

The main voice on the other side is Rusty Selix, executive director and legislative representative of the California Council of Community Mental Health Agencies, who co-authored Proposition 63 with Steinberg. Although they're on opposite sides this time, there's still mutual respect and even understanding.

"Darrell's in a different situation now, and he has to respond to different pressures," Selix said. "He's being a good soldier."

1E Passage "Less Devastating" Than 1D

Selix credits Steinberg with reducing the impacts of the first legislative suggestions for raiding Proposition 63's coffers.

"Darrell actually minimized the threat," Selix said. "We're in much better position if this passes than the Prop. 10 people." Selix said, referring to children's health advocates who face cutbacks in funding for Proposition 10 programs if Proposition 1D passes on the May 19 ballot.

Proposition 1D would shift as much as $608 million this year and up to $268 million in each of the next four fiscal years from the First 5 program, which was established in 1998 when voters approved Proposition 10 and its increased taxes on tobacco.

"If 1E passes, it'll hurt us, certainly, but it won't destroy us," Selix said. "But if 1D passes, it could be devastating for kids' programs."

Selix said neither 1D nor 1E should be considered budget reforms, as some of the other propositions are portrayed.

"Far from being budget reforms, 1D and 1E are the worst type of Sacramento budgeting. For the short-term gain of a little extra money in the general fund, both of these measures guarantee higher costs for state and local governments in the future," Selix said.

1E Trails in Field Poll

In a Field Poll released last week, 51% of likely voters polled said they planned to vote no on Proposition 1E, compared to 40% voting yes and 9% undecided.

Many voters appear to be confused about the impact of Proposition 1E, according to the Field Poll.

Only 25% of those questioned understood that passage of Prop. 1E would result in a net decrease in state spending for mental health programs over the next two years, the poll showed. A third of the voters had it 180 degrees wrong: 33% thought a "Yes" vote would increase spending on mental health programs.

Selix said the confusion would be even greater if the state had used its original ballot language.

Selix and mental health advocate Richard Van Horn filed a lawsuit in March claiming Proposition 1E's ballot title is "false and misleading" because it did "not clearly state that Proposition 1E would redirect the money the voters earmarked in 2004." The suit was dropped when the Secretary of State's office agreed to change the language.

What Happens If 1E Fails

If 1E loses, health programs face deeper cuts, Steinberg said.

"Simply put, if Proposition 1E does not pass, critical health and human service programs will be even more at risk for deeper and deeper cuts to close an even greater budget deficit," Steinberg said.

The money from 1E would allow state legislators to avoid cutting elsewhere, Steinberg said.

"The $230 million a year Proposition 1E will generate is nearly equivalent to the cost of keeping 98,000 children on cash assistance for an entire year.  Proposition 1E will in effect save current services like those by delaying the planned mental health programs to be provided under Proposition 63," Steinberg said.

"When it's between current and planned services, I choose current," Steinberg added.

Selix said he believes state officials will rethink cuts to health and human services programs if voters reject any of the six propositions on the May 19 ballot, but especially if they reject 1D and/or 1E.

"If D and E fail, I don't think they'll be opening up the budget again," Selix said. "Things are already so different now than when these initiatives were drawn up. The credit situation is much different and I think the state would be in a better position to borrow money now than it was then," Selix said.

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