It takes a community

Blessed with abundant natural resources, stunning natural beauty and a rich history as a place where dreams come true, we Californians see success as our birthright.

Sure, we're in the doldrums now, but our experience tells us that California always comes back. However, what if reviving California this time requires more than simply waiting for the next wave of prosperity?

The latest UCLA Anderson Forecast predicted that the nation will have the weakest economic recovery of the postwar era, and California won't lead the way out. Its forecasts see no improvement on the jobs front until 2011.

At California Forward, we've spent the last 18 months looking at what works and what doesn't, here and across the country. We've found that California is falling behind rather than leading the way. But we also found ways to weather the storm and to best position the state for the future.

In the 2008 "Grading the States," an annual report published by the widely respected Pew Center on the States, California earned a C overall -- lower than 41 other states -- and a D-plus for its fiscal systems, tied with Rhode Island for dead last.

States earning higher marks aren't immune to the effects of the recession, but they're learning to make the most of what they have -- and getting results.

In Georgia, for example, task forces that bring together public- and private-sector representatives have improved government management, purchasing and infrastructure, thereby saving money and eliminating outdated and ineffective programs.

In Texas, a panel established to improve efficiency helped scrap a $520-million plan to build three prisons by demonstrating that programs to reduce recidivism would address a projected prison-capacity shortfall for less than half the cost.

And in Michigan, transportation officials put sophisticated asset-management tools in place to forecast road repair needs. The state recently met its 10-year goal of bringing 90% of state highways into good repair.

Based on our research, California Forward is putting the finishing touches on a plan that, if enacted by the Legislature and endorsed by voters, would help California pass responsible budgets on time, bring government closer to the people it serves and empower communities to become more competitive in the global economy. It's not about quick fixes; it's about comprehensive reform.

* Our plan replaces short-term "budget year" thinking with a long-term strategy that gears California's economy to compete. It calls for a two-year "rolling" budget -- so that we're always thinking two years ahead -- and a three-year plan for capital investments. Such multiyear budgets force policymakers to evaluate funding for priority services over a longer period while still allowing for adjustments when revenues fall short. They also reduce the incentive to load a budget with accounting gimmicks that artificially shift expenses from one year to another. Most important, they let the public clearly see the consequences of the budget decisions.

* Budgets would not simply set spending levels for programs but would also define each agency's goals and mission, and clearly measure how well it's performing. Agencies would have incentives for good results, and there would be consequences when things go off-track.

* There would be a pay-as-you-go process that matches the costs of new programs with the dollars to pay for them right from the start. Requiring proponents of new programs to identify funding -- whether tax increases or other sources -- is much-needed transparency and just plain common sense.

* The plan recognizes that most services are best delivered at the local level and gives communities the tools and the freedom to get out from under the Sacramento bureaucracy to solve their own problems and meet their own needs. For example, if a local government was willing to take greater responsibility for parole supervision, our plan would grant that body legal ownership of the revenue to pay for it. The tendency over the last 30 years has been just the opposite, with revenues and decision-making increasingly concentrated at the state level. The result? No one's accountable.

It's time to rethink the relationship between the state and local governments, with a strong preference for government that's closer to people. We need government to foster the kind of collaboration that lets communities capitalize on their strengths.

We also need political reform that restores citizens' confidence in their leaders. Perhaps that means modifying term limits to discourage politicians from constantly jumping from job to job, or reducing the number of votes required to pass a budget to a simple majority. It could also mean requiring officeholders to spend a specific part of each year in the communities they represent.

Success is in our collective DNA, but it's not our birthright. We all have to work at it, setting aside partisan agendas and petty politics. The challenge before us is to renew California and its promise by creating a state that works again.

Robert M. Hertzberg and Thomas McKernan are co-chairmen of California Forward, a nonpartisan reform group supported by contributions from California foundations. www.caforward.org

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