Consumer Federation of California

If voters rely solely on ballot arguments when deciding in May whether to
pass a constitutional limit on state spending, they will miss the fact that the
measure also would extend higher sales, vehicle and income taxes by up to two
more years.

Legislative leaders so far have successfully omitted the fact that
Proposition 1A will essentially trigger up to $14 billion in additional taxes
from July 2011 to June 2013.

Although Republican legislators submitted ballot arguments against the
proposal emphasizing billions of dollars in tax increases, Senate President Pro
Tem Darrell Steinberg, D-Sacramento, chose a Democratic legislator to pen the
opposing ballot statement, which ignores the tax hikes.

Campaign strategists said this month that the additional taxes are the
measure’s greatest vulnerability.

Under election law, Steinberg and Assembly Speaker Karen Bass, D-Los Angeles,
are allowed to pick which legislators write opposing arguments. Steinberg chose
Sen. Loni Hancock, D-Berkeley, while Bass did not designate anyone, according to
Nicole Winger, a spokeswoman for the secretary of state’s office.

Hancock ceded her right to three groups, the Congress of California Seniors,
the California Faculty Association and the Consumer Federation of California.
Their argument, backed by Hancock, emphasizes that the bill was "hastily drafted
behind closed doors" and that a spending limit would hurt state services, but it
does not mention any of the tax extensions.

"I think everyone will make the arguments that resonate with them," Hancock
said.

Assemblyman Chuck DeVore, R-Irvine, and Sen. Bob Dutton, R-Rancho Cucamonga,
submitted a ballot argument explaining that the proposal allows tax increases to
continue for up to two more years. Because of how the budget was written,
Proposition 1A enables a 1-cent sales tax hike to continue through 2012 and
higher income and vehicle taxes to last through 2013.

"We have concerns about this whole thing being a setup, quite frankly," said
Jon Coupal, president of the Howard Jarvis Taxpayers Association, who signed the
argument with Dutton and DeVore that was not selected.

Through a budget bill, lawmakers classified Proposition 1A only as a "Budget
Stabilization Fund" meant to limit future deficits, keeping the tax implications
in a separate bill. That makes it unclear whether the legislative analyst’s
ballot review will mention the taxes.

"Our concern is that all of the ballot material will say nothing about the
taxes," Coupal said.