A Whole Lotta Nothing Going On!
On one hand your pocket book should feel a little bit safer knowing that the members of California State Legislature were sent back to their Districts this month when the top leaders in both houses could not agree to adopt the budget as proposed by the Governor. It’s really very difficult to raise your taxes, increase regulations and chase more businesses and jobs out of California when the legislature has been sent home. You can sleep well for a few more nights while the Capitol looks like a ghost town. Now of course, not everything runs smoothly when a budget is left in limbo. Most state bills don’t get paid. Vendors who provide important supplies and services don’t get paid and a lot of employees are going to try and make home and car payments with no paycheck.
Now this part is a little boring, but it helps to understand the process (or lack thereof). Usually the state budget process develops on two tracks. The first being the customary review of the Governor’s proposed budget by numerous budget sub-committees, then the process moves to the Joint Budget Conference Committee. This powerful Senate and Assembly committee has a total of 6 Democrats and 4 Republicans who decide minor to major budget issues on majority votes. Whenever big budget items cannot or will not be resolved by the conference committee (which is every year), the big issues then move on to the closed doors of the “Big 5” (Governor, 2 Democrat majority leaders and 2 Republican minority leaders). Once they have a “deal,” we all have the pleasure of waiting to see the details in one of a dozen or more budget bills (legislation).
This is when the real fun starts. Sketchy-details, back-room negotiations in the wee-hours, midnight votes, votes on budget bills that have not been presented to the public or most legislators, locking-down legislators for one or two days so that they cannot leave the Assembly (or Senate) floor. It’s all ugly, and it will all very likely occur again sometime within the next 30 days (I’m being optimistic).
Even with the largest California tax increase having occurred in February 2009 ($12 billion), the current budget deficit is somewhere around $19 billion, and big deficits are projected for several more years to come. So what is going to happen this year to fix the problem, you ask? Well, don’t hold your breath waiting for that fix. I recently flew back up to the Capitol ghost town to do a little fact finding of my own. After a flurry of one-on-one private meetings – I concluded what I pretty much already knew: If a budget is going to pass this year – it’s going to use a lot of baling wire and duct tape, and it’s going to kick the can (real tough fixes) down the road to our next Governor (whoever she or he may be).
The financial problems for our state are massive. There is no doubt in my mind that if we were a city, county, or a private business we would in fact be bankrupt. And if we were a corporation, the Members of the Board would likely be facing federal fraud charges! I firmly believe that large scale re-structuring of our state government MUST occur, but so far EVERY reform bill I have introduced was killed or (more often) not even given a hearing. The entire process in which our state budget is developed, implemented and then reviewed (or audited) by the State Legislature must be completely re-written.
Furthermore, the key to our revival is not only to re-write the legislative process, but more importantly to unshackle jobs and businesses. On average, it takes roughly 25 private sector jobs to pay enough taxes to support one government employee. We have been regulating, taxing and chasing businesses and good paying jobs out of this state for so many years, that we forgot who really pays the bills. Now before you fire-off a nasty-gram, yes I know that the national and international economic problems have also hurt us. And NO, I’m not advocating that every regulation should disappear overnight and that businesses should be allowed to dump pollutants in our rivers and lakes. I’m talking about good-ol’-fashioned common sense. Can we relax (or postpone) some regulations until our state economy rebounds? Can we reduce fees and burdensome permit processes until many of our unemployed can find jobs? Can we reduce the size of state government until we can afford its price tag? The answer is Yes, Yes, Yes. We really can’t afford not to. But will we?
P.S. Many of you respond to my monthly newsletters or Mushroom Alerts with thoughtful suggestions, information, or even some well reasoned complaints. Each week when I return from Sacramento I will usually have a pretty good stack on my desk to read. Although I try, I don’t have enough time to respond to each and every letter and email. But please know that they do make it to my desk. Keep them coming!