California’s Budget–How We Got Here and Where We Should Go

Appeared on the California Progress Report and in the Santa Cruz Sentinel

March 30, 2008

by John Laird

The most successful national candidates this year have tapped into a desire for public officials to be direct and truthful with the voters, along with leading the nation away from the partisan divides that have seemed to sap our ability to achieve progress.  Five years ago I entered the legislature with this same hope, and while I’ve been successful on many fronts, this sentiment in regard to the state budget continues to be absent. 

Arnold Schwarzenegger ran for governor in the 2003 Recall election as a candidate who would end gridlock and get things done.  In that campaign, he pledged to lower the car tax, balance the budget and not cut education.  At the time I said keeping all three pledges would be impossible—and a year later Schwarzenegger broke his pledge and cut education.

The governor did, however, keep his promise to cut the car tax.  Together with a ballot measure that locked in the spending supported by the car tax—yet without the car tax revenue—those moves will cost the state $6.1 billion next year.  I, and most of my Democratic legislative colleagues, didn’t support the idea of both eliminating the revenue and locking in the expenditure.  The governor and most Republican colleagues did. 

When Governor Schwarzenegger was facing a major shortfall in his first budget, he proposed major cuts and going to the voters in 2004 with a new $15 billion bond to pay off debt.  At the time I supported raising a tax to pay for that bond.  The governor and Republican legislators opposed that idea.  For next year’s budget the cost of that resulting bond payment—unbacked by a new revenue source—will be $3 billion. 

The governor also sponsored Proposition 46, approved by voters in 2002, which sets aside over $400 million annually for after-school childcare, without a way to pay for it.  Added together on an annual basis, the lost car tax revenue, the unbacked bond payment and the mandated after-school childcare will cost $9.5 billion in the next budget year—well more than the $8 billion deficit we’re working to close. 

To summarize, if the governor hadn’t cut the car tax and had provided a new funding source for the debt bonds and afterschool care, we wouldn’t have a budget deficit—and the Proposition 98 guarantee to schools would be working just fine.  And, we would have probably been able to pay off the debt bonds by now.

In a bi-partisan, straight-talk world, the governor would have been clear with the voters—“if you vote for this, we’ll have to make these cuts.”  He did not do that.  Instead, the governor advocated for stand-alone ballot measures and now states “we have a spending problem” and “we don’t have the money” to prevent massive cuts to education, parks, senior services and healthcare—and that people other than himself caused this problem. 

I am not proposing rolling back the items the voters approved.  However, I am suggesting the governor had a measure of responsibility for getting us here—and should accept a measure of responsibility for getting us out, without the massive cuts he proposes.

The Sentinel’s recent editorial calling for a compromise of cuts and new revenues was right on the mark—I have been working toward that in the budget process.  Instead, the governor is calling for reform via another new formula.  On its face it appears good, but it wouldn’t be necessary if we’d faced these past decisions in the right way.  In fact, this new formula would just be another way to avoid the difficult budget decisions we must make.

It’s time for the straight talk we didn’t get as the decisions were made that got us to this point. We still have three months until final budget decisions have to be made.  We should use this time to own up to the truth, agree on the underlying facts and compromise on the steps needed to move ahead.

Assemblymember Laird serves as chair of the Assembly Budget Committee and represents the 27th Assembly District.