Props. 1D, 1E flawed on both sides

Having to choose the “lesser of two evils” has always been a surefire sign that the winner of an election is lukewarm, never the ideal choice for success.

Yet supporters and opponents on both sides of two upcoming special election ballot measures are agreeing on just that — that no matter the outcome of propositions 1D and 1E this month, all involved will stand to suffer financially in some way.

The special election on May 19 will ask voters to approve six measures that legislators in Sacramento hope will help balance a state budget marred by lingering deficits, a shaky economy and the highest unemployment rate in years.

Should propositions 1D and 1E pass, state funding promised for special-needs groups aiding children and the mentally ill will instead be funneled back toward the state, temporarily, where some expenses too high for California’s general fund can be offset, paid for and saved.

Proponents of 1D claim that if the measure fails with voters, state coffers stand to encounter more and more fiscal shortfalls. 1D opponents say the proposition harms children and families directly by depriving them of valuable health services.

1D proposes a five-year diversion of at least $1.68 billion away from First 5 programs statewide that support early development programs for low-income children up to 5 years old. First 5 monies are funded with tobacco taxes through Proposition 10, the California Children and Families Act established in 1998.

Legislative analysts estimate that Prop. 10 revenues will generate up to $500 million in cigarette taxes in the next year alone. Through Prop. 1D, that money, they say, is a potential savings of more than $600 million through next year by taking $340 million that First 5 had in reserves plus $268 million from Prop. 10 funds. They estimate $268 million annually from Prop. 10 funds alone will be redirected through 2014. After the five-year period proposed by 1D ends, the normal Prop. 10 funding cycle would resume.

According to the Community Commission of Ventura County, overall Prop. 1D funding also stands to reduce the state’s budget deficit by one-half percent to 1 percent over the next five years.

The proposition poses so many negative economic impacts to First 5 that severe cutbacks to services offered by its county branch would be unavoidable, said Robin Godfrey, First 5 Ventura County’s director of special projects.

“If you’re looking at cuts of this magnitude, everything can’t continue,” she said.

Godfrey said First 5 works with 11 different low-income neighborhoods in Ventura County, where the group receives about $10 million a year from Prop. 10 tobacco taxes. Combined with other matching funds from federal sources and the state First 5, the county’s First 5 ends up investing about $14 million annually towards its health and learning programs.

But if Prop. 1D passes in two weeks’ time, Godfrey estimates the group stands to sustain up to $23 million in losses over 1D’s complete five-year period. It’d be a major blow to the group, she said, because tobacco taxes have already been a declining revenue source to begin with.

According to Godfrey, First 5 builds out its operating budget with the knowledge that smoking is falling out of fashion, and fewer cigarette sales means less Prop. 10 income for groups like First 5.

She was unsure which First 5 programs specifically face the chopping block, but said some “capacity building” programs — things like funding for pediatric dentistry — are poised for downsizing or outright elimination if funding disappears.

To compensate, Godfrey says, First 5 may need to look into revenue streams spared from cuts.

Prop. 1E works in a similar vein because it seeks to divert funding set aside from another voter-approved ballot measure. When Proposition 63 (the Mental Health Services Act) was passed in 2004, it mandated a 1 percent income tax surcharge on people earning more than $1 million annually, which has since gone to fund local mental health programs.

The intent of 1E is to tap into Prop. 63 funds over the next two years and shift them into the state’s general fund, where, like Prop. 1D, legislators aim for a hearty savings. The state elections division estimates up to $230 million in savings for each fiscal year 2009-10 and 2010-11 with voters’ approval of 1E.

Most opponents have argued that Prop. 1E degrades mental health services and, according to the county community commission, that passage of the proposition may result in decreased federal funding for mental health services afforded to Medi-Cal recipients.

Dr. Steve Elson, CEO of Casa Pacifica in Camarillo, said Prop. 1E undermines and eviscerates “the intent of the voters” when the Mental Health Services Act was passed. It could set in motion a tendency by lawmakers to dip into funds set aside and meant for special services like mental health.

 “This sets a precedent and could be a target for legislators in future years,” Elson said.

In addition to the perceived state budget savings promised by Props. 1D and 1E, supporters also favor both measures because a portion of diverted funding is proposed for spending within the child development and mental health arenas.

1E, according to state elections, calls for about $230 million in Prop. 63 funds diverted to support the federally mandated Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. 1D calls for more funding of state-paid health and human services for children 5 and younger.

Locally, the Ventura County Economic Development Association (VCEDA) supports all six measures. The Ventura Chamber of Commerce endorses propositions 1A, 1D, 1E and 1F.

Some supporters have realized that financial ramifications will be unavoidable, no matter whether the propositions pass or fail. VCEDA President Bill Buratto said all six of the measures are flawed in some way; but VCEDA board members, he noted, recognized their endorsement was for the greater good of the national economy.

“We weren’t going to take positions. We saw potential problems with all of them,” Buratto said. “Our decision was to look at them, in their entirety, as a collective body.”

He continued, “The primary reason was the potential budgetary and economic chaos that may ensue if all of these may not pass. To take out any one of those pieces means that the (state) budget that was put together falls apart.”

“The most pivotal piece of support is that each of these measures is temporary,” said Grant Sigman, vice chair of the Ventura Chamber of Commerce’s Governmental Affairs Committee. “We took it on face value as the propositions were written.”

However supportive Sigman’s committee is, criticism of government leaders, and of the financial crisis that prompted the special election, remains.

“Everyone nowadays is cynical about Sacramento’s ability to balance a budget,” Sigman said. “When propositions like these come up, it’s the government’s inability to solve a problem.”

Experts have weighed in, saying that propositions 1A and 1B are written in a manner confounding to voters. Godfrey, of First 5 Ventura, believes the same about 1D and 1E.

“The ballot language is very confusing for readers,” she said. “There’s a lot of very gray language.”

However opposed she is to the pair of propositions, she still urges people to do their research so they can make informed decisions at the ballot box.

“Folks need to go read the arguments,” Godfrey said, “and the whole text of the propositions so they can make a good decision.”   

paul@vcreporter.com