Panel Proposes Streamlined State Budget Process : Government: Constitutional reform commission urges passage by a simple majority vote of the Legislature. It also would require that the financial plan be truly balanced.

The California Constitution Revision Commission began the gritty business of trying to make state government work better Thursday by endorsing an overhaul of the budget process--the most glaring example of official gridlock and dysfunction in recent years.

Taking its first action on a broad spectrum of proposed constitutional changes, the commission gave preliminary approval to a 12-point package of budget reforms that included a mandate that California have a balanced budget.

The plan also allows passage of a budget by majority vote of each house of the Legislature rather than a two-thirds majority. The two-thirds rule has been the snag that has led to embarrassing budget impasses lasting as long as two months into the fiscal year.

Other features of the plan are the establishment of a two-year budget cycle and tough new prohibitions on rolling over state borrowing from one fiscal period to the next.

The action closely followed the recommendations of commission Chairman William Hauck, a former aide to Republican Gov. Pete Wilson who was selected by Wilson to lead the three-year reform process, and the commission staff.

The 23-member commission went on to discuss the issue of school finance. On Friday, it is scheduled to take up changes in the structure of the legislative and executive branches, the initiative process and the relationship between state and local governments in California.

Hauck said the preliminary report will be sent to the governor and Legislature and taken to the people in a series of public hearings throughout the state this fall. Hauck hopes to present a final plan for legislative consideration by the end of January.

Any proposals adopted by the Legislature, by a two-thirds vote, would go before voters in the 1996 general election. The Legislature can accept or reject any or all of the proposed amendments.

The commission was created by legislation sponsored in 1993 by state Sen. Lucy Killea (I-San Diego), who also serves as a member. Over the past year it has gotten input at scores of meetings statewide.

Now, Hauck said, it is time to begin adopting a plan to meet the commission’s goals of making government more responsive to change in California and to put it more in touch with the people.

Hauck considered the fact that many legislators and other observers have been skeptical about the commission’s ability to provide a workable constitutional reform that could win legislative and voter approval.

“I don’t think they will take the work that we do seriously until we do that [begin voting],” said Hauck, who was a Democratic legislative aide years before he became an adviser to Wilson.

Symbolically, the budget process was perhaps an appropriate place to start. The contentious budget deadlocks of recent years have caused more measurable frustration among California voters than any other single subject. The public approval of the Legislature and the governor plummeted after the 63-day budget impasse in 1992, when the state ran out of cash and was forced to issue IOUs.

The budget proposals were among the least controversial before the commission. Even so, the commission took more than half a day considering and voting on them.

The exercise demonstrated the fine line between the commission’s aim of removing some of the institutional roadblocks that clog the governmental process and the need for strict accountability to the people.

The commission moved to reduce impediments by making the budget easier to pass in the Legislature, by a simple majority vote. But it tempered that flexibility by requiring that the budget be balanced.

The Constitution now only requires the governor to submit a budget in January that is balanced on the basis of assumptions about spending and revenue for the fiscal year beginning the following July 1. Frequently in recent years, budgets developed deficits that were carried over into subsequent fiscal years.

The commission’s plan would impose strict controls on state borrowing and prohibit the state from carrying any deficit forward into the new fiscal period.

Those provisions won strong support from Assemblyman Phillip Isenberg (D-Sacramento), who has been especially critical of thinly disguised deficit spending during the 1990s.

As it stands now, said Isenberg, a commission member, “we don’t deal with the problems because they are too painful to deal with.”

The state also would be required to maintain a budget reserve of at least 2% annually to buffer the state against unexpected fiscal reversals. There is now a “prudent reserve” provision in the Constitution, but there is no way to enforce it.