Expediting a New Spending Limit Honors the Voters’ Show of Faith

Loren Kaye
President of the California Foundation for Commerce and Education

I give credit to California Democratic leaders. Flush with victory, they acknowledge their party’s weakness for fiscal profligacy.

In the wake of the first successful voter approval of a statewide tax increase in eight years – after eight straight defeats – Democratic leaders have expressed due caution on returning to old habits:

  • Governor Brown began with Sunday school, insisting “(w)e need the prudence of Joseph going forward over the next seven years, and I intend to make sure that that’s the story that we look to for our guidance.” Then he invoked the specter of Wall Street, promising to “focus on enduring changes to the state’s spending policies” to put the state on more stable financial footing.
  • Senate leader Steinberg was a little more circumspect, insisting that “(w)e all recognize that we have to use this new (supermajority legislative control) power wisely, and we can’t overplay it.” On the other hand, the Senator identified restoration of some budget cuts as a personal priority.

But there’s good news on the not-too-distant horizon – help is on its way. Scheduled for the 2014 ballot is a measure that would enforce fiscal discipline by creating a rainy day reserve and preventing ongoing spending of one-time revenues.

Drafted by Governor Schwarzenegger’s Department of Finance and approved by a bipartisan supermajority of the Legislature in 2010, Assembly Constitutional Amendment 4 represents the best consensus to date on controlling state spending. It isn’t a hard spending cap (like the “Gann Limit”), which these days is a tough lift politically, but it addresses head-on the boom-and-bust spending cycles that have bedeviled state government.

Barring a loss of nerve by Legislative leaders, voters will see this measure on the November, 2014, general election ballot. (It had been scheduled for the last June’s ballot, but in a fit of buyer’s remorse, Democratic leaders postponed that vote.) Indeed, the state’s elected leadership could demonstrate their seriousness to maintain fiscal discipline in the future by scheduling this measure for an earlier vote, say, in June, 2014. This would highlight to voters the importance of setting the state on a responsible course of budget and spending control, after the faith voters showed the Governor and Legislature by approving Proposition 30.

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