Capitol Journal: Here’s an idea for legislators: Figure out how to pay for a spending bill before proposing it
You’d think from reading some promoted legislation that the Capitol was a candy store handing out free goodies.
A lot of appealing items are on display. The cost? Oh, that. We’ll worry about it later.
Here’s my suggestion for a new law — an old but scoffed-at idea: No spending bill can advance through the Legislature that doesn’t pinpoint precisely its source of money.
We have that requirement in home mortgage lending. Also, before a developer can build a housing tract, the source of water must be identified. Too often in the Legislature, however, it’s buy now, find the money later.
This particularly came to mind last week when some Assembly Democrats proposed the most generous college aid program in the nation.
The goal is to eliminate the need to borrow money for nearly 400,000 low- and middle-income students on UC and Cal State campuses. Grants would be provided to help students cover their room, board and books.
At community colleges, student grants also would be increased. And no full-time, first-year student would need to pay course fees, which are $47 per unit.
“It’s visionary, and it’s bold,” says Assemblyman Kevin McCarty (D-Sacramento), chairman of the Budget Subcommittee on Education Finance. McCarty and Assembly Speaker Anthony Rendon (D-Paramount) are pushing what they call the “Degrees, not debt” scholarship act. “And the elements are doable,” McCarty adds.
They’re certainly desirable, but fiscally doable? The annual cost is pegged at $1.6 billion, although the sponsors are offering a five-year phase-in.
“At first blush, what’s not to like?” says H.D. Palmer, spokesman for Gov. Jerry Brown’s Finance Department. “A debt-free college education is a laudable goal. But it comes with a significant price tag and lots of questions.”
Yes, the kind of nagging questions that too often don’t get answered forthrightly in the Legislature. They boil down to this: Where do you get the money? From raising taxes? From chopping other programs?
Sometimes a proposal is relatively small potatoes, but pile up a bunch and they can bust a budget. Last week, for example, Assemblyman Tony Thurmond (D-Richmond) proposed giving school districts $100 million so they can partner with developers to build affordable housing for teachers. Another laudable concept.
But that $100 million is the same amount that McCarty and Rendon are proposing to spend on community college students.
Recently I wrote about an effort by two state Senate Democrats — Ricardo Lara of Bell Gardens and Toni Atkins of San Diego — to enact a single-payer healthcare system for California.
It’s a great idea, in my view, but there would be heated opposition from conservatives and insurers. Regardless, it seems a nonstarter because of the multibillions in cost.
Lt. Gov. Gavin Newsom has picked up the idea and incorporated it into his 2018 campaign for governor. He wants to model a state plan after a San Francisco universal healthcare system he installed as mayor. But it would require billions from the state and federal governments. Good luck on that.
Our legislators seem to forget that just a few years ago during the recession, state government was hemorrhaging tens of billions of dollars in red ink. And lawmakers were being forced to slash programs unmercifully.
Another recession is on the way. It’s inevitable. So how cruel would it be to enact a universal healthcare program, then have to butcher it? Or tell college kids: “Don’t worry. You’re going to be debt-free.” Then suddenly: “Whoops. We can’t afford that anymore. Better borrow big.”
Before the Legislature enacts any more grandiose, very expensive programs, it should summon the courage to do one essential thing: reform the state tax system to stabilize the revenue stream. Now, it’s extremely volatile and slows to a trickle during a recession.
Democratic politicians — Brown foremost among them — rely too heavily on rich people’s capital gains, which dry up during bad times. What’s sorely needed is to broaden the income tax base. Also, the sales tax should be extended to services while lowering the rate. Then you’d have a much steadier revenue stream. But politicians are paralyzed with fright on that.
And now, on top of all this financial uncertainty, President Trump seems to be in a snit about California. He’s threatening to cut off billions of federal dollars because the state is resisting his efforts to deport immigrants here illegally.
Trump’s proposed federal budget — which U.S. Sen. Dianne Feinstein (D-Calif.) called “the most draconian” she’d ever seen — would stiff California of many billions of dollars. It won’t be enacted as proposed, but California certainly still will lose a ton.
And if the Republican-controlled Congress repeals Obamacare, that will leave a few million Californians without health insurance. The Legislature will feel compelled to find billions of dollars to cover them.
So there are higher priorities in Sacramento than seeing to it that college students graduate debt-free.
“We don’t have the money to do it,” McCarty conceded to me. “I’ll be the first to admit it. But we could phase it in as money becomes available.”
I’d start with the first-year community college students and waive their fees. That’s a $50-million item. A sound investment.
As for the rest, there’s that eloquent line in the 1996 movie “Jerry Maguire” from Cuba Gooding Jr’s character: “Show me the money!”
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