State Budget Process Is Overdue for an Overhaul

As this year’s budget battles so graphically demonstrated, California’s antiquated state budget process is broken and needs fixing. The Assembly finally approved the budget 42 days after the July 1 constitutional deadline, only one day less than last year’s 43-day delay.

The state spending plan affects all Californians; the governor and the Legislature have no more important task than to adopt the budget without the lengthy delays that now seem to be a regular feature of the Sacramento scene.

For the past four years, the California Citizens Budget Commission has conducted a study of the state budgeting process. The commission’s final report, which was released last month, recommends comprehensive reforms to improve the process and put California in the forefront of the best budgeting practices. Foremost among its recommendations is to end the requirement of a two-thirds vote of both houses of the Legislature to pass the budget.

California is one of only two states that require such a supermajority. This requirement, which was put into the state Constitution during the Depression to keep state spending in check, in practice places the power to block the budget into the hands of small minorities in either house of the Legislature, thus promoting gridlock and enhancing the influence of special interest groups. The recent budget negotiations in Sacramento have been a sorry example of the pork-barrel spending that has become a regular feature of achieving the necessary two-thirds votes. For example, tens of millions of dollars were added to the 1998-99 budget to secure favorable votes, including a new roof for affluent Marin County’s government center.

Eliminating the two-thirds budget vote requirement is politically difficult. The problem is that there are only two ways to put a constitutional amendment on the ballot. The first requires the votes of the same legislators who currently benefit from having things the way they are. The other method--putting a measure on the ballot by initiative--would require the efforts of a good government advocacy group to gather the signatures to qualify for the ballot and mount a successful initiative campaign. Nevertheless, this task needs to be taken on.

Requiring that the state budget be the only order of business for the Legislature from June 1 until the budget is passed also would speed up the budget process. In addition, the recommendation that only budgeted funds could be spent by the state would clearly prohibit the temporary financing methods that currently enable the Legislature to ignore the deadline. Unfortunately, as was demonstrated last month when a Los Angeles judge temporarily restrained the state controller from issuing state warrants, it’s state employees, aid recipients and other innocent groups who suffer the consequences of delayed payments, rather than the elected officials who are responsible for the budget delay.

In times of surplus like the present, budget makers need to exercise restraint to ensure that tax cuts and spending increases don’t leave the state unable to maintain important programs in leaner budget periods without massive borrowing of the kind that took place in the early 1990s.

Finally, another major element in the commission’s budget reform program is the recommendation for a constitutional amendment requiring the state budget to be balanced as passed by the Legislature and signed by the governor, a requirement not now in the state Constitution. A balanced budget is a sound fiscal goal. Fairness dictates that taxpayers pay for the programs carried out for their benefit and not pass along the costs of those programs to future generations of taxpayers by borrowing to finance a gap between current revenues and expenditures.

The budget commission members feel strongly that the adoption of these budget reforms and the other related recommendations in their final report will help California’s state budget process make necessary fiscal decisions in a more responsible and timely manner.