The Budget’s an Open Book

One of Arnold Schwarzenegger’s new television ads offers a simple remedy for California’s fiscal woes: “Audit everything, open the books and then we end the crazy deficit spending.” Similarly, Peter Ueberroth, before he walked away from the race, called the budget a mystery and said he too would have an audit conducted. Unfortunately, it’s the Enrons and WorldComs that need an honest audit, not the state budget.

Nothing is more public and more exposed to scrutiny than the annual state budget document. Schwarzenegger complained that his experts had looked at the budget and couldn’t make heads or tails of it. But they could learn all they have to know by spending some time with Elizabeth G. Hill, the Legislature’s nonpartisan fiscal analyst. Of course, there is flab and outrage to be found in state spending, starting with the $100,000-plus yearly stipends paid to the governor’s political cronies for “service” on various boards and commissions. But it’s all there in black and white.

The nonpartisan independent Bureau of State Audits conducts annual state financial audits and undertakes other probes on its own and at the request of the Legislature’s audit committee. The state controller’s office conducts audits of departments and agencies to make sure they are spending their funds as the law directs.

The state’s Little Hoover Commission has a similar role and also explores “how programs could and should function.”

As for the budget itself, the governor submits it to the Legislature in January and revises it in May when tax receipts are known. Two budget committees and nine subcommittees plow through the thousands of individual spending items in the 2 1/2-inch-thick document in public hearings, more than 100 in the Assembly alone. Every department and agency is called in to justify its spending request. Representatives of the legislative analyst and the Finance Department sit through every session. It’s true that some major budget issues may be settled in meetings of the governor and the two party leaders in each house. But their actions are made public before final votes are taken.

California’s problem is twofold. First, Gov. Gray Davis and the Legislature were spending more than the state was taking in and, second, the budget process has become hamstrung by ballot initiatives that earmark huge amounts of money for schools and other special uses. Basic reform is mandatory so that massive deficits like those of the last three years don’t occur again.

But that has nothing to do with reading the budget and understanding what’s in it. It doesn’t take an expert or an auditor, just patience. Unfortunately, that doesn’t make a good sound bite.