On Tuesday, the electorate of California, the most populous state in the Union, voted to reject five out of six budget proposals. Propositions 1A-1E were an attempt by Governor Schwarzenegger to reduce the budget deficit by cutting the funding to certain programs, whilst at the same time raising taxes in the short term. The only proposition that did pass, 1F, puts a cap on the level of politicians’ pay increases during down years. It seems to me that this was clearly meant as a sop to the electorate, a bid to get them to accept the rest of the package by making people feel as if the politicians are also sharing in the economic hardship and are willing to make sacrifices themselves. This is all well and good, but there are dangers inherent in underpaying politicians; either you remove an incentive for the most talented people to enter public service, or you open the door for politicians making money by less honest means.

The budgeting difficulties game about in the first place due to a lack of partisanship agreement in the state legislature; ironically, the No Campaign brought together left and right in opposition to something that both sides regarded as an unacceptable compromise. For the right, the budget proposal did not cut enough from certain programs, and they also opposed the tax increases, especially as they came during an economic downturn. The left was unwilling to accept the cuts in what they regarded as vital programs, and the reshuffling of monies from previous initiatives that had passed.

Overall, however, in rejecting the proposals, all with a majority of above sixty percent, the California electorate seems to be sending a message of discontent on how the legislature goes about formulating and passing a budget. California is one of only three states in the country that demands a two thirds majority to pass a budget for the next year. At the moment, of forty senators, there are twenty five Democrats and fifteen Republicans. In other words, the Democrats are a couple of votes short of being able to push through their agenda. Now, you might think that this would serve to promote cross party agreements, and bring about a balanced budget that’s acceptable to all. In reality, the minority Republicans have been very successful in pursuing their agenda. There have been murmurings from the left that a minority has managed to hijack the budget process, against the will of the majority of the elected representatives, and hence, the majority of the people. In reality, however, the Republicans seem to have just been much better at getting their message across, and in using the leverage that they have to advance their priorities.

Whichever it is, the result is a mess, and Sacramento has until June 30th to find an agreement, before the state risks going into a shutdown. Failure to reach an agreement by then could also result in difficulties in getting loans from banks to service the ever increasing state debts. Being the one of the largest economies in the world, and certainly the largest in the United States, it’s vital that California manages to reach some sort of agreement, both for itself, and help keep the country on a path out of the current recession.