Contributor

Ray Haynes

Mr. Haynes is an Assembly member representing Riverside and Temecula. He serves on the Appropriations and Budget Committees. [go to Assembly Member Haynes website at California Assembly][go to Haynes index]

“Blow Up” Baseline Budgeting
The tax-and-spenders hate common sense budgeting...
[Ray Haynes] 5/25/04

When the governor came out with his May Revise budget this year, you could hear a very loud “Darn it” from the Democrat majority in the Legislature. They spent the whole first half of the legislative year trying to convince anyone who would listen that the Governor would raise taxes. He didn’t, and, boy were they mad.

Now they have taken to saying he will raise taxes next year. He hasn’t solved the “structural deficit” (which they created in the five years that Gray Davis was Governor), so obviously, they say, he is going to raise taxes next year. It just wasn’t politically tenable this year. Just wait—they say—he’ll do it. He has to. There is no other way.

Of course, the Governor’s May revise doesn’t solve the “structural” deficit. The structural deficit, simply stated, is the deficit created because all of our government programs are on autopilot, that is, they continue to grow year after year without restraint. Democrats don’t want to stop the growth of government, so the Governor is forced to use his power to simply slow it down. So—he balances the budget this year, balances it next year, and then just waits for the economy to grow to catch up to the Government growth.

In the meantime, the Democrats and their lackeys in the press beat up on the Governor for “not solving the budget mess” as he promised. They created the mess, and now they complain that he is not fixing it? How disingenuous is that? This problem was not created in one year; it will not be fixed in one year. The Democrats know, however, that they have no chance to keep their majority this year unless they put a few chinks in the Governor’s armor. So—they attack him for not cleaning up their bedroom mess.

But wait, the Governor has begun a process that could completely revamp how state government does business, the California Performance Review (CPR) process. If the Governor is actually successful in”blowing up the boxes” of state government, it will be through CPR. Right now, bureaucrats, experts, citizens, and thinkers are getting together to look at how the state conducts its business, and trying to figure out how to do it better. Under discussion is the consolidation and even the elimination of entire agencies and commissions.

Another possibility under consideration is a new way of doing the state budget. Right now, the state uses the “baseline” budget method to draw up its yearly budget. Simply stated, a baseline budget takes last year’s budget, adds inflation and “caseload” growth, and sets that number as the baseline. The baseline budget is always bigger than last year’s budget. Any action that reduces the baseline is called a cut, even if the final number adopted in a program is bigger than the budget the year before.

Schwarzenegger, and his Finance Director, Donna Arduin, know this for the deception it is, and are trying to change it, with what is call a “zero-base budget.” A zero-base budget assumes that each government program starts at zero, and makes the people who run the program justify how they spent all of their money. This one change could undo years of waste and abuse, and it is now on the table.

The bureaucrats don’t like changing the way they do business. They don’t like to have to justify their work product. The Governor, however, has the right idea. Make them work; make them justify their expenditures. Waste and abuse will disappear with this one simple change.

Meanwhile, the Democrats just keep praying for tax increases, and defending the status quo. It ain’t goin’ to happen.

I have introduced this common-sense budgeting reform as legislation almost every session I’ve served in the legislature. Now, with the Governor’s support, we finally have a chance to get it passed and start looking at every program with a more critical eye. It is time to put the bureaucrats and program administrators on the defensive instead of the taxpayer. CRO

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