Secretive Budget Practices Underline Need for Reform

California entered the new fiscal year this morning without a 1997-98 state budget, which in itself is cause for neither surprise nor despair. Missing the constitutional deadline has become almost routine since the Legislature discovered about a quarter-century ago that state government would not dissolve in a puff of smoke if there was no budget by midnight June 30.

The best guess now is that lawmakers and Gov. Pete Wilson will work out their differences and adopt a new spending plan by July 18, when the Legislature is scheduled to go on vacation. It has also become common practice since the fiscal crisis of the early 1990s that the biggest and most contentious budget items are worked out in private between the governor and the four party leaders, two each from the Senate and the Assembly. The dictates of the so-called Big Five then are presented as faits accompli to the two houses for approval.

With many issues still to be settled, it’s understandable that the budget is late this year. The debate has involved a number of complex issues, including welfare reform, and many lawmakers are going through the budget process for the first time.

Once this budget is approved, however, state leaders should mandate a return to the legal practice of adopting a budget before July 1. All issues should be resolved in the two-house budget conference committee rather than in secret by the Big Five. There would still be room for negotiations with the governor, but the result then would be subject to the public legislative process.

Sacramento also should seriously consider some of the reforms proposed last year by the California Constitution Revision Commission. One is to cut off the salaries of the governor and legislators whenever they fail to produce a budget by July 1. Unless there is some penalty for their failure to act, there will be little incentive to meet the deadline.

Another needed reform is to allow passage of a budget by majority vote rather than the two-thirds margin required in each house. As it is now, a relative handful of lawmakers can hold the budget hostage for any reason.

In theory, the two-thirds vote provides a check on spending. But the commission cited studies that found it actually can result in higher outlays as individual legislators leverage the system to include their pet projects.

As a safeguard, the state Constitution should be changed to require the final budget to be balanced. The current balanced-budget provision applies only to the budget plan submitted by the governor in January.

Budgeting for the state’s needs is never easy, but at least it can be on time and legal, and maybe even free from pork-barrel extortion. All issues should be resolved in the two-house budget conference committee rather than in secret by the so-called Big Five.