McClintock is an expert on matters of the State budget and fiscal
discipline. He is a Senator in the California State Legislature
and ran for Governor in the 2003 recall election. His valuable
website is found at www.tommclintock.com [McClintock
Gray Davis Kind of Budget
act as if spending $5 billion more than you take in
a state gets itself into a fiscal pickle the size of California's,
a helpful bit of advice is the First Law of Holes: "When you're
in one, stop digging."
that little wisp of wisdom is entirely wasted on the majority
of California's legislators. Not only are they still digging,
they're digging even faster.
the budget that was voted on with great fanfare on June 15,
the constitutional deadline (last met in 1986) for the Legislature
to send its budget to the governor for approval.
a result of last year's general fund budget, California will
spend $82 billion while taking in just $80 billion - ending
the fiscal year on June 30 about $2 billion in the red, according
to the nonpartisan Legislative Analyst's Office.
next year, if the budget offered by the Democrats is adopted,
California will spend $89 billion while taking in just $84
billion - a $5 billion deficit. We're not even heading in the
understand what's wrong with California's finances - and the
latest addition to its woes if the Democrats' budget is adopted
- three numbers become very important: 5, 6 and 9.
percent is the combined rate that population and inflation
will grow next year.
percent is how fast state revenues will grow. Revenues substantially
exceed inflation and population growth, proving once again
that this has never been a revenue problem.
problem is the 9 percent figure. That's how fast general fund
spending would grow under the budget now pending. During the
spendthrift days of Gray Davis, annual spending growth averaged
are told the budget is balanced because of billions of dollars
of borrowed money either carried over from last year or new
borrowing contemplated for the coming year. But borrowing is
not revenue. Borrowing is what happens when you're spending
more than your revenue.
budgetary nonsense has already racked up $26 billion of general
fund-supported debt to finance the state's chronic deficit
spending. That's $2,860 that the average California family
is obligated to repay through its taxes just as surely as the
balance on their last credit card statement.
Legislature was once fully capable of working through these
problems and delivering relatively balanced and relatively
punctual state budgets. But those were days when the state
Constitution was faithfully followed. The budget was painstakingly
pieced together through extensive discussions and negotiations
and give-and-take agreements throughout the many months of
deliberations. Each house took up its budget independently
and entertained amendments from any member.
new process is to present a conference report to both houses
for a take-it-or-leave-it vote at the last possible moment
with no opportunity for even the slightest modification. This
doesn't leave much room for bipartisan compromise that was
once the hallmark of California's Legislature.
where do we go from here? It should be obvious to everyone
that the same legislators who got us into this mess aren't
going to get us back out. Months of legislative inactivity
have produced a last-minute spending plan measurably worse
than the Davis budgets that have already placed California
on the brink of bankruptcy.
the most important action immediately available is Gov. Schwarzenegger's "Live
Within Our Means Act," scheduled for the statewide election
Nov. 8. The heart of the measure restores the authority that
the governor of California had from 1939 until 1983, to make
midyear spending reductions whenever spending exceeded revenue,
without having to return to the Legislature.
in his last budget, Gray Davis begged the Legislature to restore
this traditional authority to his office. As long as the governor
held this power, legislators were compelled to adopt balanced
budgets based upon honest numbers. Failure to do so gave the
governor his choice of what programs to reduce - and they knew
a result, it was a power that rarely needed to be used and
California rarely ran a deficit.
ultimate solution rests in a maxim that is both a blessing
and a curse for democracies: We get the government we vote
for. We're now living with and paying for the curse. The blessing
is that we can change it. CRO