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Office of the Chancellor / Public Affairs
Tuesday, August 12, 2003
 

Orange County Register 8-12-03

Editorial - A ready-made budget for would-be governors

 

Attention, candidates - whether frontrunners, longshots or fantasy play- ers. There's a detailed state budget proposal available that combines reform, restructuring and selected cuts in duplicative programs to promise a $1.5 billion surplus in 2005 - with no tax increases, no cuts in services deemed vital by most Californians, but with improvements in the business climate sufficient to permit the creation of an estimated 600,000 new jobs over two years.

In a recall election whose inescapable backdrop is a state spending crisis that the Legislature and governor punted into next year, the Citizens' Budget offers a benchmark by which candidate seriousness can be judged.

It was prepared jointly by the Performance Institute of San Diego, a think tank dedicated to advocating performance-based management practices for government agencies, and the free-market Reason Public Policy Institute in Los Angeles. We wrote about the proposal when it was released April 30, but it has become even more relevant in this season of recall. (The proposal is online at www.rppi.org/cacitizensbudget.html.)

If the recall excitement among voters reflects deep-seated concern over California's fiscal/political crisis (and not simply generalized disgust and fascination with celebrity), the next governor could emerge with a mandate to undertake thoroughgoing reform of how California's government does business. Whether one agrees with every recommendation in the Citizens' Budget or not - it offers a menu of options - it's a good starting point for discussion of a way out.

The Citizens' Budget, as Carl DeMaio, president of the Performance Institute, told us, involves "no smoke and mirrors, but proven ways of reducing spending while improving services."

It starts with a two-year budget cycle to improve planning and increase flexibility, and includes a department-by-department analysis of ways to improve performance through techniques that have been successful in other states. Competitive sourcing, for example - taking bids from outside providers and converting contracts to fixed-price/performance-based rather than fee-for-service - typically saves government agencies 30 percent while improving the quality of services.

The Citizens' Budget, after identifying wasteful management practices and bureaucratic overlap, would offer bonuses to state employees who suggest cost-saving reforms, and cut away some of the regulatory thicket that increases the cost of doing business and discourages job creation. It includes suggestions for workers' compensation reform, and would not reduce the share of revenues that are directed to education under Proposition 98.

Perhaps most important for the long haul would be the Taxpayers Bill of Rights, consisting of three constitutional reforms. A constitutional revenue limit would hold increases in state revenue growth to the sum of annual percentage increases in population and inflation. A modified but slightly more flexible Gann Limit would limit spending. And a balanced budget trigger would make automatic cuts in certain discretionary programs should actual revenues not match revenue forecasts. These three reforms would prevent the kind of overspending in flush times that got the state into the current crisis.

All this is tough medicine, but the result would be a more efficient government and a more business-friendly state. Perhaps it would require a special commission to create a specific and comprehensive reform plan that the Legislature would have to vote up or down. After that the structural reforms should reduce the likelihood of future crises.

Without violating confidences, Mr. DeMaio said some campaigns already have contacted the Performance Institute to get briefings and all major candidates will be or have been sent material on the Citizens' Budget.

The recall campaign will undoubtedly have its circus aspects. If it makes room for serious candidates to introduce and the next governor to implement significant portions of the structural reforms proposed in the Citizens' Budget, it just might lay the foundation for finding a sensible and lasting way out of the current crisis.