Millions of Micro-Managers Share Blame for State’s Crises

Sacramento

Sacramento is a fiscal basket case and there are plenty of people at fault. Gov. Gray Davis and the Legislature certainly share the blame -- and so do California voters.

Yes, we should all take a long look in the mirror.

We’ve stripped the governor and -- especially -- the Legislature of the power they need to govern, tying their hands.

Rather than the people delegating authority to their elected representatives -- as envisioned by the nation’s founders when they created a republican form of government -- we Californians have become incessant, hands-on nitpickers, the worst kind of boss. (No better than Davis.)

Direct democracy was not meant for an eternally expanding state of 35 million people.

Start with Proposition 13 that choked off a stable tax source rather than reforming it. State and local governments became less reliant for revenue on property and a lot more on retail sales and volatile income.

One result was uncontrolled urban sprawl -- family housing being shucked off to the county suburbs while big-box retailers were recruited by the cities. Another unintended consequence: State government became the cash cow and shot-caller for local governments and school districts. “The schoolyard bully,” says Arnold Schwarzenegger.

The voters -- in another of their tantrums (read recall) -- imposed term limits, which turned legislators into antsy, ambitious amateurs. They’ve become afraid to move without reading a poll or checking their bankrolling special interests.

Then there’s the straitjacket of ballot-box budgeting, mainly Prop. 98, which tied up at least 40% of the state general fund for K-12 schools and community colleges. A very worthy cause, but this is the kind of thing the founders wanted elected officials to decide.

On top of that, the voters have approved ballot measures that corralled tobacco and gasoline taxes for health and transportation causes. And last year, they passed Schwarzenegger’s Prop. 49, which will grab up to $550 million from the already stressed general fund for after-school programs.

The California Budget Project, a liberal think tank, estimates at least two-thirds of the general fund is tied up by voter and federal mandates, denying office-holders much discretion over how to spend the money.

Now, in the latest episode of ballot-box budgeting and Sacramento power-stripping, we have Prop. 53 on the Oct. 7 ballot.

Prop. 53 would dedicate another slice of the general fund to infrastructure, starting at 1% and growing to 3%. This also is a good cause. The nonpartisan legislative analyst estimates that California needs to spend $54 billion on infrastructure in the next five years. This measure would kick in roughly $850 million beginning in 2006 and increase that to several billion dollars.

The money would go for the likes of highways, water facilities, parks, crime labs, courthouses, mental hospitals, universities and prisons. But not K-12 schools or community colleges. They’re covered by $25 billion in bond issues -- half already passed, the rest awaiting voter approval next year.

Here is a good place to mention one more relevant straitjacket: California’s rare requirement of a two-thirds legislative vote for passage of a budget. Prop. 53 exists because Democrats cut a deal with its author, Assemblyman Keith Richman (R-Northridge), to obtain his budget vote. Richman voted for last year’s budget, ending a long stalemate, and his infrastructure proposal went on the ballot.

Richman isn’t a big fan of ballot-box budgeting, but he defends it here.

“Ballot-box budgeting is, in fact, important,” the lawmaker says. “If the Legislature had the discipline to make the needed investments in infrastructure, we wouldn’t need Prop. 53.”

Why doesn’t it have the discipline? “Because of the influence of special interest groups -- pushing for more spending on education, on health care, on prison guard salaries. And, from the other end of the political spectrum, on tax relief.”

But the construction lobby certainly is pushing for Prop. 53.

Richman argues that back in the 1960s and ‘70s, under Govs. Pat Brown and Ronald Reagan, the state was investing 15% to 20% of its general fund in infrastructure. Since 1990, he says, Sacramento has been allotting only an average 0.2%.

Yes, but.

“It’s a myth we’re not spending on infrastructure,” says Lenny Goldberg, a liberal tax lobbyist. He points out that infrastructure projects are financed these days by other sources than the general fund: by dedicated gas taxes, local sales taxes, large water users and bond borrowing. Last year’s budget, for example, included $5.6 billion for capital outlay, including transportation.

Goldberg adds: “Coming out of this last budget disaster, what we really don’t need is to mandate more spending.”

Prop. 53 is one of those feel-good, send-a-message things that is hard to resist. It’s tempting to say Sacramento’s such a mess, we should just reach into the till and grab some money for highways and hospitals before the Legislature can spend it.

They’re good projects, but it’s bad policy.