No matter what budget Sacramento comes up with, California voters will probably increase the deficit in 10 weeks.
By Mark Paul Op-Ed in the LA Times
August 21, 2008 -- There's little chance that the state budget eventually passed in Sacramento will actually rid California of its stubborn $15.2-billion deficit. But in the improbable event that the Legislature and governor balance the budget without resorting to such gimmicks as raiding other accounts, enjoy the moment. In just 10 weeks, California voters will likely throw it out of whack again.
California has two budgets. One is passed by lawmakers. The other is improvised at the ballot box. The state's Constitution requires that the budget put together in Sacramento at least pretend to be balanced. The spending that voters enact operates under no such discipline. We do what we please.
And what usually pleases us is to add billions in spending obligations without providing any revenue to pay for them. Over the last decade, voters have passed bonds and programs, as well as shifted general tax revenue to transportation, that will cost the general fund -- when all the bonds are sold -- about $9.5 billion in debt service and spending a year, according to estimates by the Legislative Analyst's Office. That's equivalent to 9% of the current general fund,or about the total cost of all of today's state social service programs.
On Nov. 4, we will have numerous opportunities to spend even more. The ballot will include Proposition 1, a measure put on the ballot by the Legislature, which authorizes $9.95 billion in general obligation bonds to build a high-speed rail system between Los Angeles and San Francisco. Money from two other bond measures, qualified for the ballot by their intended beneficiaries, would build/renovate children's hospitals (Proposition 3) and subsidize alternative-fuel cars and electricity generated from renewable sources (Proposition 10). Big water interests are pushing lawmakers, in budget negotiations, to add a huge waterworks bond to the menu.
Voters also will decide three crime measures with fiscal consequences. Proposition 5 calls for more spending for drug treatment in prison. Proposition 6, an anti-gang measure, would increase state spending for a variety of criminal justice programs and lengthen sentences for some crimes. Proposition 9 would prevent the state from saving money by releasing prisoners before their sentences are up to reduce prison overcrowding.
Leave aside whether these measures are worthy as policy. Just look at the dollars involved. If voters pass all six, we will cumulatively add about $2.7 billion a year in bond debt service and direct state spending to the budget -- without including an extra dime to pay for them. That amount would grow to more than $3 billion if the water bond lands on the ballot and is approved. The sum is about what the state annually spends on the University of California, and it would be plopped into a budget already badly out of kilter because of a big spending/revenue imbalance.
California's spending addiction at the ballot box is thoroughly bipartisan. State Sen. George Runner of Lancaster, who chairs the Senate Republican Caucus and beats the drums against "the bloated budget," is the sponsor of Proposition 6, which would cost taxpayers about $600 million a year, according to the Legislative Analyst's Office. Proposition 5, funded by liberal drug-policy reformers George Soros and John Sperling, would annually spend about $1 billion to expand drug treatment programs for criminals and rehabilitation for parolees, in the hope of eventually reducing the inmate population and the need to build more prisons.
In a little-noticed report, Treasurer Bill Lockyer projected last year that, at current tax levels, California will not be able to pay for its existing programs and its debt service at any time in the next two decades if voters keep approving bonds at the same rate as they have over the last 20 years. Every ballot proposal that comes without a funding source adds to the problem. But that hasn't stopped people from putting spending measures on the ballot and voters from passing them. Fiscal discipline -- that's the Legislature's job, isn't it?
Mark Paul, senior scholar at the New America Foundation, was formerly deputy treasurer of California and deputy editorial page editor of the Sacramento Bee.