Reforms Necessary to Fix California's Broken Budget System

By Assemblyman Bill Emmerson

As we enter another week without a state budget, it seems that partisan bickering and massive deficits are becoming an annual tradition at the State Capitol. While Republicans want to hold the line on tax increases, Democrats recently announced their plan to balance the budget by raising taxes by almost $9 billion. It is irresponsible to increase spending and raise taxes without first reforming our broken budget system.

Unfortunately, our state government does not manage its finances the way most of the Inland Empire's hard-working families do. For instance, during years when we have surpluses, the Legislature spends all the extra money without saving for an economic downturn. It is foolish to have a budget system that encourages lawmakers to expand government during good times and keep overspending during bad times, making it clear that strong reforms are needed to end the budget instability that plagues our state.

That is why I have joined with my Republican colleagues in proposing a strict spending limit and a reserve (rainy day) fund that will get California back on track. If a spending limit was in place a few years ago, our budget problems would be much less severe today as it would have stopped the Legislature from overspending.

Our spending limit is simple - it would allow the government to grow annually, but only to keep up with the combined growth in population and inflation in our state, which has averaged about five percent in recent years. This ensures that as California grows, the Legislature will be forced to prioritize its spending choices to stay within the spending limit. Any dollars that are above the spending limit will be deposited into a rainy day fund that can only be used for emergencies or to pay off debt.

Forcing the government to live within its means simply makes sense, which is why it's no surprise that a strong majority of Californians support a spending limit. Unfortunately, some at the State Capitol would rather raise taxes than reform California's budget system. I think raising taxes is the wrong approach to dealing with our fiscal crisis because it will hurt families who are already stretching their household budgets to afford higher gas and food prices.

Additionally, the Democrats new tax proposal will make it even more expensive to operate a business in California, threatening our economic recovery and killing jobs that we can not afford to lose. In fact, the California State Automobile Association, better known as AAA, recently announced plans of closing all three of their call centers located in California, which employ around 900 people. They are moving their operation to Arizona and Oklahoma because of California's inhospitable business climate. They are the second major company in less than a week that is planning to shift jobs out of state.

Earlier, there was speculation that Toyota Motor Corporation was planning to build the Prius hybrid at their plant in the Bay Area. They instead opted to build an entirely new manufacturing facility in Mississippi rather than expand their plant here. That's bad news for our economy, especially considering that California has by far the largest market for hybrid cars. Actually, since 2001 we have lost about 440,000 manufacturing jobs due to our states inability to compete nationally and globally.

Losing jobs is hurting our economy and it's painfully clear that many companies are choosing to flee California for business friendlier states. The economy is an important issue for Republicans and we are committed to rejecting these tax increases that are driving businesses away. Obviously, when companies leave they take their jobs with them, hurting working Californians.

This budget crisis presents the perfect opportunity to fix our budget system and get our economy back on track. We simply cannot afford to wait to make the necessary reforms that will ensure a more stable spending stream, not only for this year, but for future years as well.

The Legislature must make some tough choices now as we negotiate the state budget. I am confident, however, that if Republicans and Democrats work together to do the right thing, we will craft a budget the people of California deserve. I look forward to working with Governor Schwarzenegger and my colleagues in the Legislature to pass a balanced budget that reforms the system and protects our community's priorities.

Assemblyman Bill Emmerson, R-Redlands, represents the 63rd Assembly District in the California Legislature.

** Editor's Note:  I applaud Assemblyman Emmerson and any other state legislators who have joined in on this idea.  I think it's about time we find a solution so we don't have to deal with this budget crisis every year like clock-work.