Untangling Government

“If you want to be dragon slayers, pick your dragons carefully.” That was the advice offered by Fred Silva, executive director of the now-defunct California Constitution Revision Commission. Silva, speaking from tough experience, was appearing before the 28 members of the new Speaker’s Commission on State and Local Government Finance last week at its first meeting.

The problem of local government organization and finance was the most difficult the constitutional commission encountered as it labored for two years to produce a modern blueprint for government in California, only to have it ignored by the Legislature. The panel did propose a creative new form of home-rule government that would have allowed cities, counties, school districts and special districts to consolidate some or all of their operations. The group was decidedly vague in spelling out just how this new omnibus government would work. The uncertainty was warranted since it would have given localities flexibility in how to restructure themselves. But the plan suffered for threatening too many special interests intent on holding turf.

There are encouraging signs, however, that the reform movement may live again in Sacramento. Gov. Gray Davis has promised to work for state and local fiscal reform, although his attention is focused now on education. The Senate Budget and Fiscal Review Committee, under its new chairman, Steve Peace (D-San Diego), is exploring the issue in hearings around the state. The 15-member Commission on Local Governance, created by the Legislature in 1997, will make its report at the end of this year. Meanwhile, the California Consensus Project, an independent reform group with strong business input, is in its fourth year of deliberations.

The financial relationship between the state and local governments is exceedingly complicated--that’s the first big problem. Since the passage of Proposition 13 in 1978, the state has become the major collector, allocator and distributor of tax revenues for local agencies, especially the schools and the counties. Counties have virtually no ability to raise revenues on their own. The cities have more independence but still have lost an estimated $2.8 billion to the state since Sacramento took over a big chunk of local property tax revenue in the early 1990s to balance its budget. Some of that has been returned, but often with strings attached.

At a Senate Budget Committee hearing in Placerville last week, the laments of local officials were familiar: They have had to cut services, defer maintenance, take on more debt and raise taxes just to keep even, if that. They want a clear delineation of what level of government should deliver what services--the closer to the people the better--and a stable, predictable source of revenue. Those are not unreasonable requests. These matters are the foundation of efficient, accountable government.

At some point, the governor and legislative leaders should pull together the best ideas of the many studies and draft the necessary legislation and constitutional amendments for voter approval in 2000. The trick then will be to keep a united front to slay the dragons in the way.