Governor's Budget-Related Reforms
(snip)Summary
The Governor has proposed constitutional reforms involving several areas of the budget—including Proposition 98 K-14 education funding, the budget process, and transportation. The Governor has indicated that the main purpose of the reforms is to deal with "autopilot spending" and instill discipline in future budgets.
We believe, however, that the administration's specific proposals work in exactly the opposite direction. That is, they would put more spending on autopilot and make it more difficult to balance future budgets in a rational way. The changes would also result in a diminution of legislative authority. To the extent that the Legislature considers reforms, it should focus on those which: (1) build on existing provisions in law related to balanced budgets, restrictions on borrowing, and building large budgetary reserves; and (2) modify existing provisions of law that allocate General Fund dollars on a formula-driven basis.
Along with the release of the 2005-06 budget proposal, the Governor proposed several budget reforms that involve changes to Proposition 98, the budget process, transportation funding, and employee pensions. The administration asserts that the budget reforms are necessary to contain future spending growth and prevent future deficits. In this piece, we describe the Governor's budget-related reforms and then discuss several key issues that the Legislature should consider when evaluating them. The Governor's pension reform proposal is discussed in the following write-up in this part.
(Denny Crane: "There are two places to find the truth. First God and then Fox News.")