California Special Election: Prop. 1C explained

What Proposition 1C would do: This "lottery modernization" measure represents the propositions' biggest new revenue source for next year's budget.

Quick take: The proposition would authorize state officials to borrow $5 billion that would be repaid by profits from a revamped California State Lottery. The measure proposes to increase lottery profits with better marketing and bigger prizes to attract more customers. The measure guarantees that money provided to schools by the lottery -- typically less than 2% of the education budget -- would come instead from the state general fund.  State officials say that if Proposition 1C fails, they will have to cut billions of dollars more from the current budget.

-- Evan Halper

Full text of the propositions

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Links: May 19 Voter Guide | Find your polling place  | How the props are expected to do | Times endorsements

Discuss: Should the state expand the lottery and borrow $5 billion against projected future profits from it to balance the budget?

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Comments

[Tannim]

What they're not telling you about Prop 1C:

It borrows from future lottery profits, assuming that the profits will make the $5B they want, taking away the money from education funding, money that is currently not part of the Prop 98 baseline. That money would be replaced by General Fund money that would be part of the Prop 98 baseline, increasing it by $5B and creating a future $5B General Fund deficit AND more education funding requirements on top of it all. This is basically a backdoor attempt to increase Prop 98 funding under the guise of "borrowing" from the lottery.

It's a shell game!

No thanks!

[Warren]

Isn't 1B also a tax increase for the schools? I'll vote yes on 1C but, no on 1B.

[DRE DAWG]

NO! The state needs to revamp their budget, cut cut cut, and place an ironclad budget cap across the board. And if our reps refuse to get their hands dirty in doing so....then we'll happily recall your butts out of office. Don't mess with the people of California!!!

[vinny]

Stop with the borrowing. Can we all take cut?

[JAR]

I say NO!! The problem with our budget is in Sacramento- they continue to borrow, borrow, borrow. They need to be realistic. In the private sector people are loosing their jobs or taking pay cuts and cuts to their retirement. The public employees- read teachers, SEIU 1000 members, etc.- need to also take cuts. Robbing Peter to pay Paul won't work anymore. A balanced budget by our legislature is not a reality. The 16 billion $ in cuts are funny money, not real cuts, just deferments to scheduled increases.

[AAAAANDRE]

Hey, lend me $5 Billion, I'll pay you back after I get back from Vegas! ;-)

[Rob]

Our state bonds are rated near-junk. Our schools, especially our universities, are already suffering enough from the budget crisis. We can't afford even more cuts. Voting "yes" on the budget deal is the only responsible thing to do.

[Bill Bob]

So it's come to this, borrowing against POTENTIAL future profits from gambling. This is not a way to run any kind of government. How in the world did we let these politicians put us in this type of jam. Spend! Spend! Spend! And for what?

[Teno]

Ofcourse it all sounds wonderful if the marketing works and the lottery participation increases but chances are that it won't. After all the lottery is a gamble and when people gamble they like to win, winning is what will keep people playing. An increase in players means your chances of winning diminish, so why play? But I digress, the fact of the matter is that borrowed money will not be repaid when the politicians controlling the check book do not know the meaning of the word "save". They will spend every dime of increased revenue on pet projects and perks for themselves and in the end the debt will still be there.

[ay]

No they should not. The budget crisis is an excellent opportunity to cut programs that never should have been funded to begin with. Chances are, the State Legislature will just waste the lottery reveneu the same way they've wasted the tobacco settlement on some useless program. Cut cut cut. Cut deep and cut wide.

[OC CPA Dude]

Californians need to recognize that every time we borrow, that we are sacrificing the future at the expense of today. If we borrow the money today, how will we pay for the future needs of our state? Our state is already indebted to the hilt. We must put our finances back in order, and we must have serious tax reform.

Overturning Prop 13 and cutting income and sales tax in half is necessary, and if everyone votes no on these propositions, we will be closer to arriving at the solution to this problem, which is not just cutting programs, but serious tax reform. Steady revenues are needed to run the state. The next few years will be rough, but eventually selfish Californians will realize there is only one real solution to the problem, and that is tax reform.

[DOI_DAWG]

Heck NO!! Looks more and more that California is turning into Chicago. Start by cutting the salaries of our California legislators, they don't do squat as it is.

[michael d]

Government by proposition is a recipe for disaster. Vote against all ballot propositions and force legislators to do their jobs. The first job is to overhaul the state constitution to create a functioning state government.

[Timray]

sad to say i came here for health and what is going to be healthy for me is to leave....when it costs the state twice as much to keep someone jail compared to what i make....it is either join them in jail or leave....but i will stay long enough to vote everything down

[Ray]

Vote no on this prop as well as 1a,1b,1d, and 1e. Our state legislature is too beholden to big business, big unions, and every kind of interest group you could name for anyone to honestly believe what they say. State government will continue to grow without end unless we cut-off their supply of money.

[vince52]

California has undertaken a wide variety of unsustainable fiscal policies. I'm opposed to all of the initiatives because they ignore, and defer, the only real solutions to the problem --- make a smaller government, lower public pensions, pay as you go, and rely less on fluctuating revenue sources such as income and more on the sales tax.

[jimmy park]

N-O, noooooo! They don't get it, do they? OK, I'm gonna say it in Spanish too: NO!

[Rob]

I'm voting for the propositions because I'm worried about what will happen to the University of California and Cal State if the props fail. In the long run, we're going to keep having budget problems until we get rid of Prop 13 and all of the propositions that mandate spending.

[Rob]

I'm voting for the ballot propositions (except maybe 1B) because I'm worried about what will happen to our state universities if the props fail. In the long run, we are going to keep having budget crises unless we get rid of Prop 13 and all of the propositions that mandate spending.

[KJ]

The problem with California government is summed up in this sentence from our governor: "And I think that state government has to make the same sacrifices as the ordinary folks make out there."

This US against THEM mentality, where our legislators don't view themselves as "ordinary folks" shows that we're not in this TOGETHER, and THEY are far removed from US.

It's a sad state, for a sad state.

[Jung Gatoona]

Borrow then consume. Borrow then consume. It's a cycle that never ends, and with a deficit in our budget for the past years we are only sinking deeper into a hole we'll never get out of. *This just in: China has bought California*

[Robert NO longer in LA]

I just LOVE IT when the corrupt politicians resort to EXTORTION AND BLACKMAIL; don't forget to REWARD them, and RE-ELECT ALL, come Nov 2010 and 2012!!!

[Mike]

Wages and benefits make up the bulk of most public-agency budgets. Occasionally we voters read brief snippets mentioning that police officers in one city average $200,000 a year, or that a retiring assistant city manager is receiving a pension of $170,000 a year for life, with automatic cost-of-living adjustments. After the propositions are defeated Tuesday, we need the newspaper to provide comprehensive information about public employee salaries, benefits and pensions, and how they compare with private-company compensation. It would also be nice to see some discussion in the paper of the real effects of Proposition 13, some good and some bad. The owner of the house I rent pays $8,200 a year in property taxes, while the owner of a bigger, better house next door pays $1,495 a year. Warren Buffett a few years ago expressed amazement that the taxes on his multimillion-dollar ocean-view home were under $5,000.

[Warren]

Until the Feds and the State address the tax payers money that goes to illegals I'll vote NO on all tax hikes and new taxes. Lets cut of expenses before we increase our taxes. Lets cut all social services to illegals and their babies, kids. No more free education for the kids of illegals. No more citizenship for kids of illegals. This madness must STOP!

[nick]

The CA government is so bloated and corrupted, from overpaid and incompetent public workers to illegal alien receiving welfare and medicaid, that it's only a miracle that the state is not already bankrupt. I am cheering for bankruptcy if that's what it takes to rectify the system. Stop illegal aliens, stop overpaying union workers, stop over paying public workers. Even if the democrats get their way, you can't tax anymore. I am already stopping spending to avoid paying extra sale tax; there is not much more taxing you can do. haha. lol. here comes the big bang.

[B. Inman]

The problem is that during the fat years of tax revenues such as 2006, CA govt. hired a lot of extra people. They do not understand economic cycles or rainy day funds. We are supposed to feel sorry for layoffs of people, many of which should not have been prudently hired in the first place? As to class size increase arguments for laid off teachers vs say 5 years ago? Hello ... CA should sue the federal govt. for funds to teach the illegal (or "pc" undocumented) students. It is the feds responsibility to keep people from other countries out of CA and from feeding at the taxpayer trough. Does Mexico extend the same courtesy to Guatemalans entering from the south? I thought not. Those with means will escape the state before they are bankrupted by government gone wild.

[desertdav@aol.com]

Saturday...avoid at all costs the following location...
Tom's Farms in Corona. There's going to be a massive tax protest and although intelligence shows previous tax parties have been quite peaceful and null of violence, there is the expectation that there will be between 15k and 25k of angry, fed-up, and screaming tax protesters!
You thought the teachers were angry with the possible lay-offs, they TOO might show up in favor of no more taxes!!!

[GTF]

As a homeowner, I will gladly support eliminating Prop. 13 tax protections IF we also create a renters tax. There is no reason homeowners should carry the burden to educate the children of those that rent. It's the least we can do since the anti-Prop. 13 crowd wants to tax our parents and grandparents right out of their homes.

Next, we need to impose a Hefty tax on each and every child born in this country to non-citizens (is that term okay with the PC crowd?). Why do I have to bear the financial burden of those that can't seem to practice any sort of responsibility with respect to having more children than they can afford?

[Maggie]

More borrowing against the future is not what we need in California. Before we lay off any firefighter, community law enforcement person or teacher, we need action to get rid of all the rent seeking middle layers of advisory groups, commissions, consultants and any other governmental special interest entities that are not in the flow of direct services to citizens. Enough!

[Olden Atwoody]

"The measure proposes to increase lottery profits with better marketing and bigger prizes ..."

Marketing? How about letting people win once in a while?

Since when did anyone running the lottery figure out what people want? The dumbass mega-prizes are foolish.

Wouldn't you rather see 200 people win a million bucks (max) than to see some grey-haired granny, or 18 year-old pimply-faced teen, or an illegal alien win $200M?

Geez,is that hard to figure or what?

[Jolat]

This madness has to end.
So if they borrow now from the future projections of the lottery, what do they do when those future projections are here but the money is already spent? Borrow more???
This madness has to end. I am a second generation native Californian. My Great Grandfather crossed the dustbowl in a model T back in the 20's with family in tow when my Grandma was a little girl. Sad, sad state of our beloved California. Now the car registration is doubled? What's that going to do to our economy here? This madness has to end.

[Tim Saye]

Has the Golden State finally lost its luster? Well, when businesses are fleeing to tax and business friendly Nevada or Texas, which has the most corporate headquarters in the nation and the fastest job growth right now, Californians should be concerned. The state's unemployment rate, now at 11%, will only keep going up, reducing tax revenue of every type, as business owners who provide jobs jump ship.

Of course, there is always a chance for this state to save itself.

It is called living within its means. When spending exceeds income, there has to be a change.

Of course the governor is listening to his better half, as most spouses do, in making his budget decisions. Too bad she is not Nancy Reagan!