Posted on 10/31/2005 10:16:07 AM PST by calcowgirl
SACRAMENTO ---- California's chronic spending imbalance has generated multibillion dollar deficits each of the last four years and is set to create another $6 billion shortfall in the next fiscal year.
A state government spending beyond its means was one of the main reasons for the recall effort against former Gov. Gray Davis, the 2003 special election that catapulted Gov. Arnold Schwarzenegger into the governor's seat.
Schwarzenegger's solution for taming the perpetual budget deficits is a 6,000-word ballot measure that would completely overhaul how the state spends money and would give the governor authority to make midyear cuts if spending outpaces revenue.
Like spending caps that have been imposed in Colorado and are being considered in more than a dozen other states, Schwarzenegger's Proposition 76 is based on the notion that taxpayers already provide more than enough money to pay for needed services. What is needed is voter-imposed discipline to control the Legislature's propensity for overspending, the governor's supporter say.
The state spends $1.10 for every dollar it takes it ---- a condition that cannot be sustained, said Tom Campbell, who stepped aside as Schwarzenegger's director of finance and is now the chief spokesman for the committee supporting Proposition 76.
"Proposition 76 is focused on allowing us to spend only what we have," he said.
Critics who otherwise agree with the need for fiscal reform question whether Proposition 76 will do what Schwarzenegger wants it to.
"This is not the right solution to the problem," said Craig Brown, a former director of finance under former Gov. Pete Wilson, a Republican who has been a political mentor to Schwarzenegger.
Brown filmed a television commercial for the opponents of Proposition 76, drawing criticism from his old boss.
"There's no arguing that we have a problem with the state budget," he said.
"The issue is whether this is the solution. It's not."
Proposition 76 would impose three major changes on the budget process, according to the nonpartisan legislative analyst office. It would set a new spending limit, give new power to the governor to unilaterally cut spending and revise a landmark school funding guarantee, Proposition 98.
California voters have seen similar proposals in previous elections.
In 1979, voters approved a limit that tied increases in spending to population growth and inflation. In 2004, voters approved Proposition 58, which called for a balanced budget, restricted borrowing and required the state to create a reserve fund.
Loopholes in both laws, however, have greatly reduced their effect.
Schwarzenegger's Proposition 76 would create a new spending limit that would tie increases to no more than the average growth of tax revenues the state takes in over the previous three years.
The initiative also would give the governor the authority to declare a "fiscal emergency" when expected revenue falls below expected spending.
When that happens, the Legislature would have 45 days to negotiate proposed cuts with the governor.
If that process fails, the governor would have authority to reduce spending to virtually any program. Schwarzenegger said such a provision is needed if the state hopes to avoid more deficits, like the $24 billion shortfall his administration estimated when he took office.
Opponents say the governor already can make cuts by using the line-item veto, but administration officials say its practical effects are minimal given the enormous expenditures in a $117.5 billion budget. The governor has used the line-item veto 133 times in the past two years, cutting $435,322 in spending.
The cuts the governor would be authorized to make under Proposition 76 could affect any program, including public education. That prospect prompted the state's largest teachers union to oppose the initiative.
Proposition 76 would revise a minimum funding guarantee to schools and community colleges that voters approved in 1988. That measure ensures that public schools can expect a minimum share of the state budget during good times and bad.
Current law requires that any additional money spent on public education permanently raises the minimum funding requirement in future years, making lawmakers and governors reluctant to boost the budget for schools.
Schwarzenegger has argued that the requirement has hurt schools and does not provide enough spending control for lawmakers. Proposition 76 does away with the mandate, which he believes will result in more money going to public education.
This year's budget spends $61 billion on public schools, a record amount that accounts for 52 percent of the state's budget.
Proposition 76 also gives the governor and Legislature more freedom to decide how much money to give to schools. It also would eliminate a mandate that money taken from schools during lean times be restored when the economy improves.
The legislative analyst's office said Proposition 76's fiscal effect on schools is unclear, beyond concluding that less money would be guaranteed and that education would be subject to funding cuts.
Schwarzenegger says Proposition 76 would stabilize education funding by removing the boom-and-bust nature of state budgeting.
"I've seen it the last few years, it goes up and down, up and down. Is that we want to do with our children, take them on a roller coaster ride?" Schwarzenegger said, speaking during a campaign event at a school-supply store north of Sacramento.
"Or should we create a rainy day fund so that we have extra money available so that we can fill that hole. We should live within our means."
Bob Wells, executive director of the Association of California School Administrators, said Schwarzenegger's argument makes no sense. Even with the current funding protections, California ranks near the bottom nationally on classroom spending.
"It's like your employer telling you that instead of a raise, he'll just hand you 20 bucks every now and then. And because it isn't part of your regular pay, he'll be freer to do that more often," Wells said. "It's an amazing argument."
So, because the governor has chosen to use his power to veto less than 0.2% of spending, the law is ineffective?
Excessive spending is a hallmark of the political class in California over the past 10 years. Both Democrats and Republicans contribute to the problem. Wilson mismanaged a series of surpluses, Davis compounded the problem and Schwarzenegger continues the tradition, introducing new mechanisms to circumvent traditional, fiscal safeguards. If fiscal responsibility is to be returned to California the solution comes in November 2006 inside the voting booth. Turn out Schwarzenegger and legislative, big spenders.
From the devious promotion of borrowing to buy governmental groceries, to the bazaar suggestion of diaper taxes to fund Utopian programs, the political elite has financially terrorized the state.
The California Democrat Party, an eclectic gathering of single issue interests has always been a thorn in the side of the state's battle to budget responsibly and their contribution to the current mess is no surprise. Selfish children will be selfish.
What is disappointing has been the California Republican Party's recent, dramatic shift toward bigger government and more spending through any gimmick they can muster. A party which has compromised their principles and violated almost every tenant of fiscal, common sense to maintain the status quo and/or expand their political power.
A pox on both their houses, ill will toward their pretenders, and a NO vote on the legislation they offer to increase their domain.
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