Scenario for fixing state budget could involve short-term taxes 

California Gov. Jerry Brown and legislative leaders of both parties obviously don’t have a clue as to how this year’s version of the annual state budget wrangle will turn out.

The once-intense negotiations on Brown’s plan to close the budget deficit with a combination of spending cuts and voter-approved tax extensions have become desultory at most.

Meanwhile, the Legislature has turned its attention to hundreds of nonbudget bills while everyone involved in the budget awaits the “May revise” of income and outgo numbers to jump-start new talks.
This is one observer’s scenario of how the budget wrangle could be resolved reasonably — were reason ever to enter the budget equation:

- Extend through legislative action for three months the sales and car taxes that are due to expire June 30. Then place them, along with the personal income surtax that expired at the end of 2010, on a special-election ballot in September — but for a three-year extension to 2014, not the five years Brown wants.

A shorter extension, if approved by voters, would keep the pressure on Brown because he wouldn’t be able to seek a second term, or exit the stage, without continuing to deal with the underlying structural gap between income and outgo. Also, we would have a better idea then about where California’s economy is headed.

- Also place on the ballot some public pension reforms that will really make a dent in pension funds’ long-term shortfalls. Include a rational spending limit to force politicians to prioritize. It would prevent the spending bubbles that have followed revenue windfalls and created the structural deficit.

A spending limit of inflation plus population growth or 5 percent a year, whichever is lower? It should begin with a base of around $90 billion a year, which is where Brown wants spending in his budget. All of the ballot measures should be drafted to require that all must pass or all are void to minimize political gamesmanship.

n Set aside Brown’s “realignment” to shift some functions to local governments. As proposed, it could worsen long-term budget problems.

It’s worth doing, but only after the state’s finances are stabilized, and it should be a broad redefinition of state and local responsibilities, perhaps with some additional revenue power for local governments as Senate President Pro Tem Darrell Steinberg has proposed.

- Adopt Brown’s abolition of redevelopment agencies, which have become vehicles for subsidizing private developers, but give local governments additional authority to pass bonds for local improvements to aid economic development, as he also proposes.

Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

About The Author

Dan Walters

Pin It
Wednesday, Nov 25, 2015


Most Popular Stories

© 2015 The San Francisco Examiner

Website powered by Foundation