For Our Next Governor, No Pain Means No Gain

Dear Gov.-elect Schwarzenegger:

Congratulations on your victory, a pivotal event in California history. These are challenging times for our state, but with your strong leadership California can be turned around and again be the nation’s best-governed state and the model for the rest of the world. Accomplishing this metamorphosis won’t be easy, but it can be done. It is in this spirit that the following recommendations are respectfully offered.

California has three pressing issues: housing, education and infrastructure. In the last quarter-century the state government has become increasingly dysfunctional and has not successfully addressed these issues. Our growing and diverse population needs to be housed and educated, and our economy needs to be supported and bolstered by an effective infrastructure.

As our state’s population grows and more young families are formed, we simply need more houses. Unfortunately, local land use decisions are now driven by the desire to maximize sales-tax revenue and minimize housing production. This is because cities and counties do not get adequate revenue from property taxes and, over the past 15 or 20 years, have become much more dependent on sales-tax revenue.

The first order of business is to let property tax money flow to cities and counties. If cities and counties benefit from the property taxes generated from housing production (which is not currently the case), city councils and county boards of supervisors will be more receptive to housing development in their communities.

Not incidentally, allowing property tax revenue to go primarily to cities and counties will enable them to provide much of the infrastructure the state desperately needs. Streets, parks, playgrounds and libraries can all be financed by a robust local property tax base. That would also curtail thetawdry use of redevelopment agencies as shills that offer economically inefficient subsidies to businesses that generate sales tax.

Of course this proposal is going to engender tremendous opposition from certain highly vocal partisan interests. First and foremost, enterprise special districts (primarily water, sewer, and electrical districts) that receive property tax are going to complain bitterly. Working in concert with city council members and county supervisors, you can overcome the political objections of the enterprise special districts. California residents can be relied upon to understand that enterprise special districts can and should survive by charging user fees for their services.

The second major issue is providing a superior education for every child in California. California is blessed with a large number of capable teachers, competent school administrators and dedicated local school board members. These people can get the job done -- if they are given the resources and the freedom to operate effectively.

Today in California we are spending well over $7,000 per child annually for K-12 education . This is a lot, but you can be certain that Californians will be willing to spend this much and more if the money gets into the classroom, where the teaching actually takes place. Call it “classroom-first budgeting.”

To accomplish this, the Legislature must be weaned of its dysfunctional habit of pretending to be the school board for the entire state. Eliminate the rat’s nest of mandates and restrictions, and get the money (bolstered by some of the sales tax revenue that now goes to cities and counties) directly to the local school boards, and California’s children will be the immediate beneficiaries. Of course there will be legislative resistance to this change, but with your leadership, California residents can bring a recalcitrant Legislature to heel.

With regard to infrastructure, it’s past time to expand the freeway system. Rigid ideologues have wasted untold billions on quaint 19th-century fixed-rail systems that lack the flexibility and effectiveness of buses. It’s time to take the punchbowl away from these people. More freeways and selective use of tolls on certain roads (as decided by local governments) will reduce congestion and pollution as well as spur economic growth.

The current Legislature may be too ideologically fractured to implement these changes. Too many voters are being disenfranchised by politicians who’ve redrawn voting maps to serve their own narrow interests. Open primaries and an independent redistricting commission empowered to redraw those maps are needed to reengage the citizenry.

Drain the legislative swamp in Sacramento, and California will bloom again.

Yours for a better California.

Steven B. Frates is a fellow at the Rose Institute of State and Local Government at Claremont McKenna College.