Over the years, California has careened back and forth from surplus to deficit, a rollercoaster ride that causes whiplash for public schools and social services.
Part of the problem is that state leaders have never had much success in building up a rainy day fund, a key benchmark for good financial management often taken for granted in other states.
Assembly Speaker John A. Pérez (D-Los Angeles) said Wednesday that he wants to fix that with a new ballot measure. His plan, which could go before voters in November 2014, would require the state to stock up excess capital gains taxes and restrict how the savings could be used.
The goal, he said, is to cushion the state from periodic economic downturns, which can have an outsized effect on California's budget because it is so dependent on income tax revenue.
"You take the [tax revenue] from the good years and help insulate against the bad years," Pérez said.
California technically already has a rainy day fund; it was approved by voters in 2004. But as The Times explored last month, the account is empty and has been easily ignored almost every year.
Although Pérez does not plan to push for any money for the rainy day fund in the next budget, he wants to make it harder to avoid saving up in the future. His measure would also increase the target size of the fund from 5% to 10% of general fund revenues.
The speaker hopes his proposal will replace another measure already scheduled for the November ballot. That measure was approved by the Legislature with bipartisan support three years ago, but Democrats now say it is flawed and would wrongly restrict spending.
Assemblyman Jeff Gorell (R-Camarillo), the ranking Republican on the Assembly Budget Committee, said he's glad Pérez is raising the issue.
“It’s encouraging the speaker is talking about ways to save surplus revenues, versus spending surplus revenues," he said. "I know there’s an enormous amount of pressure to spend all of the dollars that come to Sacramento immediately.”
Gorell said Republicans will review Pérez's proposal to see if it's something they can support.
“It’s got to have some serious teeth to it or it won’t help," he said.