Getting out of the abyss

This weekend I’ve been in Sacramento at an annual legislative action conference sponsored by the  California School Boards Association. I’m told that usually many different legislative topics are discussed but not this year. The budget crisis is The Topic and the news is not good. Yesterday I blogged about the problem, and how the propositions on Tuesday’s ballot won’t really solve it (that’s why I’m opposing all of them except 1B).

If the Legislature and the Governor continue to oppose tax increases and other revenue measures, the way out of this abyss in the short-term is going to be extremely painful for everyone who depends on publicly-funded services. In one of today’s presentations we were told that if , as expected, the ballot measures don’t pass, California public schools will sustain a cumulative cut of at least $9 billion over the two years beginning in July 2008 and ending in July 2010. That is approximately $1,440 per student in cuts over two years! And even if by some unexpected reason the propositions do pass, the cuts will be devastating, so don’t think that voting yes saves us as a state much, if any, pain over the next two years.

But some of the most interesting discussion this weekend has been about possible long-term solutions to our recurring budget problems. First we heard a presentation by Jim Wunderman of the Bay Area Council, who is traveling up and down the state trying to build support for a new Constitutional Convention.  Mr. Wunderman’s premise is that the state’s government is hopelessly broken, and that incremental reforms cannot fix the problem, even if the Legislature  were functional enough to enact them.  Since only a 2/3 vote of the Legislature can call a Convention, the Bay Area Council proposes putting initiatives on the ballot which would allow the voters to call such a Convention.

This idea is intriguing, but risky. It’s terrifying to think of putting the state’s entire constitution up for grabs (think of what happened with Prop. 8 in November!), so most people think the scope of such an effort should be limited to governance and budget issues. Mr. Wunderman says his organization’s effort has found rough consensus around opening up the following issues:

  • Governance, including the structure of the Legislature and the executive branch;
  • Elections, including the referendum and initiative processes, campaign finance and term limits;
  • Budget process, including the 2/3 vote to pass a budget, the term of a budget, and spending mandates;
  • Revenue distribution, including the revenue relationship between a local government and the state.

But getting something as ambitious as this done could take years. The last time the state undertook extensive revisions to the Constitution was when it created the “California Constitution Revision Commission” in 1962, which reduced the document to 40,000 words from 75,000 words in the 14 years it was in existence.  In the end, incremental reforms might make more sense and get the job done more quickly, assuming the Legislature can find the will to enact them.

As another alternative, a group called California Forward is proposing a group of reforms aimed at fixing the budget process.  These proposals include two so-called “guard rails,” which would keep the Legislature from making bad budgeting decisions:

  • A “pay-go” provision that would require policy changes that increase costs to also contain provisions identifying where the money would come from, whether from new revenue or spending reductions somewhere else;
  • A “budget stability” provision that would identify one-time revenue and hold it in reserve for those times when tax revenues dip below expectations.

The group’s proposals also include three ideas which they say would encourage state government to make better decisions:

  • Instituting a multi-year budgeting mechanism to help local governments better predict future revenues;
  • Creating a results-based budget process that would allow legislators more latitude to decide whether to continue, increase or alter programs and policies based on their results;
  • Creating a system of evaluating programs based on progress, which gives legislators adequate time to review whether programs are achieving their goals and determine what changes should be made for programs to improve.

I’m not sure whether either of these proposals are “the answer,” or even if there is an answer. But I appreciate that there is serious, non-partisan thinking being done around the state on the topic of how to get us out of this mess. What do you think we should do?

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