Here is an interesting article from the Yucca Valley Hi-Desert Star written by Riverside County Assemblyman Paul Cook about our messed up state budget process:

Legislators have long relied on easy fixes to solve budget deficits
Yucca Valley Hi-Desert Star
7/29/08

Once again, California's Legislature is saddled with the arduous task of creating a state budget for the next fiscal year, and more often than not, budgeting becomes a nasty partisan battle to decide how tax revenue is spent. This year is no different, as the state faces one of the worst budget deficits in its history. As usual, Republicans and Democrats are unable to find common ground to solve a $15 billion deficit. As the summer drags on and government officials propose the same "tried and failed" solutions, one must wonder how we can avoid budget pitfalls in the future. The answer lies in substantive budget reform.

Legislators have long relied on easy fixes to solve budget deficits. These unrealistic solutions have included the use of general obligation bonds and robbing special use funds to make ends meet. For example, this spring Governor Schwarzenegger unveiled a plan to borrow against future state lottery profits, hoping that another get-rich-quick scheme might satiate the Legislature's voracious spending appetite for one more year. Despite his optimism, Schwarzenegger's plan doesn't address the structural deficiencies of the current budget system.

In concert with their reliance on easy solutions, California's lawmakers have allowed the state budget to grow at a disproportionate rate when compared to population and inflation. Since 2004, the budget has grown by $27 billion, and that number would increase considerably under this year's Democratic budget proposals.

To make matters worse, complicated formulas that dictate funding increases have helped to balloon the budget to immense proportions. This is problematic because overall growth cannot continue to increase at a rate that outpaces revenue generation. Some of my colleagues across the aisle argue that Republican budget proposals will slash funding to vital programs in the budget. What they aren't admitting, though, is that many of these reductions will leave these supposedly neglected programs with a greater amount of money than the year before. This is an unusual example of "Orwellian mathematics" at work. If lawmakers expect to get the state out of this mess once and for all, the legislature must adopt a constitutional spending limit that is linked directly to population growth and inflation.

In addition to the spending cap, the legislature should create a rainy day fund that will give the state flexibility during revenue shortfalls. California's tax system is structured in a way that creates volatility. When the economy is sluggish, we experience a reduction in state revenues. However, in periods of strong economic growth when the state enjoys a budget surplus, no mechanism exists to save money for bad years. This was the case in the 1998 when Governor Gray Davis squandered a massive budget surplus, which compounded deficits in later years.

The fiscal irresponsibility of the Legislature isn't the fault of taxpayers; yet under Democratic budget proposals, California's taxpayers will foot the bill. The worst thing that lawmakers can do is balance the budget on the backs of hardworking Californians. Constituents in my district pay some of the highest prices in the nation for gasoline. This financially devastating situation is compounded by the mortgage crisis, which has affected the Inland Empire more so than anywhere else in California. I intend to inject a dose of reality into budget deliberations in Sacramento this summer. It is time for real budget reform in order to end the "band-aid and baling wire" solutions of the past. We must implement the common-sense practices of money management and check balancing that every sensible Californian practices on a daily basis.


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