California Budget Dreamin'

Now that the California budget is at long last passed it is a good idea to take stock of the state's dysfunctional system. It took about $12.5 billion in tax increases, $15 billion in spending cuts and $11 billion in borrowing against future lottery revenues to patch things up for now. Some $26 billion in federal stimulus money may take much of the sting out of it this time, but that cannot be counted on as anything but a one-time windfall.

There is plenty of blame to point at. By passing Proposition 13 back in 1978, Californians guaranteed that revenues would fluctuate a lot. When the economy is good, sales and income tax revenues soar. When recession hits, they plummet.

Californians have also tied up large amounts of state spending through passing propositions. Items from school funding to children's programs to highway and prison construction have received set-asides. Such formulas restrict flexibility, especially when times get tough.

Gerrymandering the state Assembly and Senate districts into safe seats to protect the incumbents in both parties has resulted in a state legislature dominated by politicians from the far left and far right. They find it ideologically extremely difficult to compromise, and the voters of such districts also want true believers who will not compromise.

Legislatures and governors have too often spent all the revenues in good years (Democrats) or returned it all in tax refunds (Republicans), leaving no reserve to cover deficits when the economy inevitably slumps.

Term limits have ensured that inexperienced legislators are running the show, leaving lobbyists, aides, bureaucrats and the governor's office staffers in the driver's seat rather than the representatives of the people.

Finally, the absurd 2/3 requirement to pass a budget makes it all but impossible to secure agreement. It only happened this time when a couple of holdout Republicans held the rest of the state up for ransom to their particular pet concerns. See the LA Times on this.

In terms of solutions, the passage last year of Proposition 11 may help to elect more moderates to the legislature. This would put redistricting in the hands of a commission instead of the lawmakers themselves, beginning in 2012. There are safeguards to try to make the commission balanced between partisans and independents. Hopefully it will work out. No one knows for sure.

Part of this year's settlement is Proposition 1A, which would require spending stay in line with inflation and economic growth, and put surplus revenues in good years into a "rainy day fund." I hate to see mandatory formulas, but it could be that something like this is necessary. We'll see if the voters approve it on May 19. You can find this and some other reform ideas in an article by George Skelton here.

And last, there appears to be a serious effort afoot to qualify an initiative to allow the budget to be passed by a majority, or a 55% majority at worst. Arkansas and Rhode Island are the only other two states needing a supermajority to enact a budget. Assembly Speaker Karen Bass of Los Angeles has announced support for a 55% requirement, and Sacramento Democratic activists will likely soon be busy gathering qualifying signatures.

Republicans, in the minority in California, are understandably strongly opposed. But that is what a democracy is. If the Democrats could pass a budget with their votes alone they would own it. Their record would stand or fall on its success. That, combined with the redistricting reform, could give the Republicans an opportunity to gain a majority in a competitive election. As it is, the legislature is frozen into a 60-40 party ratio. The Democrats do not have the votes to pass a budget without being held up by a handful of renegade Republicans, and the Republicans can only stop a budget or leverage a few items in exchange for a couple of votes. The people deserve better.