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The false promise of Prop. 1A
Even in this season of economic crisis, it's hard not to be optimistic about California's future. Ours is a state bursting with energy and promise, a place populated by innovators and inventors, hardworking families and young dreamers, global enterprises and entrepreneurs. You can see and feel the pulse of possibility from the halls of East L.A. College, where the children of immigrants are balancing jobs and studies to get ahead, to the labs of the Silicon Valley, where the next revolution in technology is being hatched.
Yet, increasingly, the dysfunction of a state capital mired in continual fiscal disarray is threatening to hinder California's ability to thrive. At the very time Washington has embarked on a wholesale rethinking of fiscal policy, Sacramento's leaders are proposing to recycle the same broken policies that have brought the state to a fiscal precipice.
Five years ago, Gov. Arnold Schwarzenegger, with legislative leaders in tow, persuaded Californians to approve his deficit borrowing plan and "rainy-day fund" proposal, promising that the state would tear up its credit cards and never again face debilitating deficits. Then, in five of the next six budgets, the governor and the Legislature adopted deficit spending plans while running up $25 billion in budget debt -- and that was during years when the economy was booming. Along the way, as he complained about the autopilot budgeting that clogs the state's fiscal arteries, Schwarzenegger asked voters to put even more budget strictures into the state Constitution. But he never delivered on his promise to balance the budget.
Now, when the need for fundamental fiscal reform and a credible long-term plan to balance the budget has never been more urgent, the state's political leadership is promoting a new budget proposal -- Proposition 1A. As you might guess, the governor is promising that the ballot measure will free California from ever again facing budget deficits.
Here's the problem: Proposition 1A does nothing to solve the state's structural budget deficit, the central issue at hand. Indeed, the nonpartisan Legislative Analyst's Office has said that, even with Proposition 1A, the state will face an annual deficit of more than $12 billion in 2010, growing to a whopping $26 billion by 2013.
But it's worse than that. The measure would actually deepen California's budget woes. It would require that money be stashed away in a rainy-day fund even though the state is already pulling in less money each year than it spends. That's a little like telling a family facing foreclosure that they're not putting enough money away in their 401(k) account. Even in tough budget years, it would force additional cuts of more than $1 billion -- an amount equal to about one-third of the University of California system's budget.
Proposition 1A would squeeze spending on crucial investments in colleges and healthcare, and it would prevent the state from restoring needed programs as the economy rebounds. It also would lock confusing, complicated, autopilot budget language into the state Constitution -- making it harder, not easier, to adopt common-sense budgets. With complex formulas and linear regression models cemented into law, the already daunting task of budgeting would be that much harder.
Perhaps the greatest damage of Proposition 1A is that, by once again making a false promise to the people of California, it further erodes the trust necessary to achieve the two real changes needed to solve California's budget woes: replacing the requirement that budgets be passed by a two-thirds majority with a simple majority vote to end the tyranny of an extreme, ideological minority, and actually adopting a balanced budget that meets California's 21st century needs.
Of all the measures on the ballot, Proposition 1A deserves to be rejected. When that happens, the real work of reforming our state budget and government to meet the aspirations of the people of California can begin.
Phil Angelides served as California state treasurer from 1999-2007 and was the Democratic nominee for governor in 2006. He is not a candidate for office in 2010.