First Steps: Solving California's Long- and Short-Term Budget Problems

Abstract

THE CALIFORNIA Journal of Politics & Policy Commentary First Steps: Solving California’s Long- and Short-Term Budget Problems Jean Ross* California Budget Project California, facing severe economic hard times, plummeting tax revenues, an outdated tax system, and a dysfunctional political process that requires a two-thirds vote for both budget and tax increases, is in dire straights. Governor Schwarzenegger has recently proposed a list of budget cuts to stem the state’s staggering $21 billion shortfall. But these “solutions” are unthinkable in their scope and implication. The governor proposes to slash state funding for schools and community colleges by www.bepress.com/cjpp Volume 1, Issue 2, 2009 an astounding $5.3 billion. He proposes to add 940,000 California children to the rolls of the uninsured through elimination of the Healthy Families Program. He’s proposing to do away with the CalGrant Program, which would put college out of reach for tens of thousands of young people—the workforce California needs to ensure its economic competitiveness. While the state’s immediate problems are staggering, California faces an even more troubling long-term problem—an imbalance of revenues and expenditures that persists even in good budget times and constitutional limits on fiscal policymaking that make it difficult to craft a solution to the state’s problems. Over the years, Governor Schwarzenegger has presented voters with three sets of choices at the ballot box to solve the state’s budget crises. The first, Propositions 57 and 58 of 2004, allowed the state to borrow its way * Jean Ross is the executive director of the California Budget Project, a nonpartisan public policy research group. For more information, go to www.cbp.org.