Monday, October 22, 2012
How to end California's boom-and-bust budget cycles and perpetual deficits has perplexed governors, lawmakers and fiscal experts for years.
Now a think tank is proposing a solution and is putting it before voters in November.
Proposition 31's supporters say it will help put an end to California's chronic budget problems by forcing lawmakers to plan ahead, promoting transparency and granting flexibility to local governments.
Opponents cover a broad political spectrum and include labor organizations, conservatives and good-government groups.
They say Proposition 31 is ill-conceived and could lead to lawsuits, make it harder to fund education and threaten public health and safety by allowing local governments to override state laws.
The initiative is being pushed by California Forward, a nonpartisan government-reform group, with major funding for the signature-gathering process coming from billionaire investor Nicolas Berggruen. Supporters say it is the result of a multiyear effort to examine the best practices of other states while consulting residents and experts throughout California.
"It was crafted to do what we think is the next right step to fixing California," said Jim Mayer, executive director of California Forward. "To the extent we have a structural budget deficit, that nobody trusts where the money is going, that nobody knows where all the money is, these are the simple procedures that are being used in other states in the nation."
Proposition 31 seeks to change the annual state budget process to a two-year cycle, which proponents say would force the governor and lawmakers to plan ahead.
It would prohibit the Legislature from creating new expenditures of more than $25 million unless lawmakers can show where the money would come from, either through taxes or spending cuts.
Likewise, they can't cut revenue without showing what programs would be reduced.
Proposition 31 goes on to make a host of other changes, such as requiring the Legislature to make budget bills available to the public at least three days before lawmakers vote on them, allowing the governor to reduce spending during fiscal emergencies and giving local governments more flexibility in administering state-funded programs.
Opponents argue that California's budget is volatile because so much of the state's revenue depends on capital gains and income taxes from the wealthy. They also cite what they believe is a major flaw Proposition 31: It applies only to the Legislature but does not include the initiative process.
Through initiatives, voters have sometimes created new programs without saying how they will be funded and dictated state spending priorities, restricting lawmakers' ability to write the annual budget.
"We think California Forward has put a valiant effort to try and fix some of the problems that might face Sacramento, but it's an ill-conceived measure," said Angie Wei, a lobbyist for the California Labor Federation, which represents more than 2 million members.
Proposition 31 at a glance
What it would do: Proposition 31 changes California's annual budgeting process to a two-year cycle. It will require the Legislature to show what programs would be cut or how revenue would be raised if it decides to spend or cut more than $25 million.
Proposition 31 requires the Legislature to make budget bills available to the public at least three days before lawmakers vote on them, allows the governor to reduce spending in fiscal emergencies and gives local governments more flexibility in administering state-funded programs.
SUPPORT: California Forward, a bipartisan government-reform group, is pushing the initiative with major funding from billionaire investor Nicolas Berggruen. The co-chairmen of California Forward are former state lawmaker Bob Hertzberg, a Democrat, and Thomas McKernan, chairman of the board of the Automobile Club of Southern California. The California Chamber of Commerce also endorses it.
OPPOSE: Labor organizations such as the California Labor Federation, the American Federation of State, County and Municipal Employees California, and the California Federation of Teachers. The nonpartisan League of Women Voters of California, the progressive California Tax Reform Association and Health Access, which advocates for health care for the poor.
CAMPAIGN DONATIONS: Groups supporting the initiative have raised about $3 million, mainly from California Forward. Labor groups opposing it had contributed about $140,000 as of mid-September.