Maybe the Legislature will have better luck
State Senate Democrats have introduced legislation ordering every state agency to:
(a) Review all regulations adopted by or applying to
the agency,
(b) Identify any regulations that are duplicative,
overlapping, inconsistent, or out of date, and
(c) Amend or repeal regulations to eliminate
duplication or inconsistencies.
About time, right?
Given the depth of California’s economic slump and
urgency to improve our competitiveness, we can hope that this effort might lead
to a serious overhaul of existing regulations. But based on past experience, it
will take much more than passing a bill to accomplish this objective.
I told you so
On several occasions I’ve made the case that the Legislature
might propose a ballot measure to increase taxes without needing a two-thirds
vote to place the matter on the ballot. The tool is a little-known and rarely-used constitutional provision
allowing the Legislature to amend an existing initiative statute by a
subsequent statute placed on the ballot for voter approval. These statutes can
reach the ballot after approval by a simple majority vote of the Legislature
and the Governor’s signature.
While some experts have dismissed this notion, it is
apparently gaining some initial credibility where it counts, in the
Legislature. A freshman Democrat from Alameda County, Assemblyman Bob
Wieckowski, has introduced legislation to resurrect the California
inheritance or estate tax, which was abolished by voter initiative in 1982. His proposal would use
the majority vote maneuver to place the new estate tax on the next statewide
ballot for voter approval. Legislative Counsel has validated this approach.
Dipping his toe in the waters of reform
Nine-tenths of the way through his eighth state-of-the-state address, Gov. Brown lightly touched on two issues that may have as much to do with settling this year’s budget debate as the election he dwelled on for the first 1,600 words. In what seemed to be a grudgingly obligatory nod to structural government reform, Brown said,
We must also face the long term challenge of ensuring that our public pensions are fair to both taxpayers and workers alike. Finally, at a time when more than two million Californians are out of work, we must search out and strip away any accumulated burdens or unreasonable regulations that stand in the way of investment and job creation.
Media reports and commentary have appropriately focused on Brown’s insistence on a statewide special election on his tax proposals and the generally negative Republican response. But was this deeply-buried shout-out to issues that embody government failure and inefficiency the start of a productive message to Republicans, and ultimately to voters?
Taking the politics out of regulatory reform
President Obama and Senate leader Darryl Steinberg have each floated reform of
the government regulatory process as key elements of economic recovery. They’re
right. But for California now comes the hard part: putting meat on the bones of
an important but flexible political talking point.
The good news for policy makers is that the state’s
Little Hoover Commission, a bipartisan citizen panel appointed by the Governor
and legislative leaders (and to which I was recently given the honor of a
reappointment), is in the midst of a comprehensive study on how the
state can improve its regulation approval process. Spurred by a bipartisan
request from Assemblyman Felipe Fuentes and Senator Bob Dutton, the Commission
is examining, in its words, an:
How to seek voter approval of taxes is not an obvious path
Should
the Governor today propose tax increases to be voted on by the people in June, as strongly rumored, then I will look forward
to answers to several questions:
1.
How will he place the
question on the ballot? There are only three ways to put a tax measure on the
ballot: (a) citizen initiative, (b) legislative amendment of an approved voter initiative
(by a majority legislative vote), or (c) legislative constitutional amendment
(2/3rds legislative vote).
2.
If by citizen
initiative, is there enough time and resources to make a June deadline?
3.
If by amending an
approved voter initiative, which initiatives would be amended?
4.
If by constitutional
amendment, would the amendment put the actual tax increases in the
Constitution, or would the tax increases be approved by the Legislature
contingent on passage of a constitutional amendment on a different subject
(say, budget reform)?
Californians keep moving out of state
Californians continue to flee the state.
That’s the message to be drawn from data on the
state’s population growth, newly released by the state Department of Finance.
The state
overall saw a net increase of about 350,000 residents over 2009, reaching an
estimated population of 38.8 million residents this year. But in a continuation
of a recent trend, more Californians left the Golden State for elsewhere in the
country than moved here from other states. Since 1991, the net loss of
Californians has totaled nearly 1.3 million.
Tax reform: Not now, but maybe later
In his recent and provocative post, Joel Fox suggested that the
time may be approaching for a "big deal to solve California’s budget problems."
The big deal would include both tax and budget reform, although Fox cautioned
that voters may not look kindly on a complicated measure rushed to the ballot.
I would add another caution. Like Spring, the coming
of a new Administration breeds hope and optimism – which is a good thing. But
tax reform can be nasty business, and should only be attempted during
propitious circumstances. Governor Schwarzenegger’s experience with his Tax Commission
showed that even the best minds producing a creative and worthy proposal were
doomed to failure. Why? The environment lacked two key preconditions for
success.
First, the state was broke. Tax reform should never
be attempted when the budget is seriously out of balance, otherwise every
proposal will be viewed as a way to get well, rather than promoting equity,
efficiency or growth. The temptation to use a legitimate reform effort as a
smokescreen for more net revenues becomes too great, and opponents of reform
can too easily make that accusation, even if not true.
Brown denounces budget gimmicks
For those who thought Gov.-elect Brown’s budget forum in Sacramento last week was the same old – same old, think again. Here is a dense but fascinating slide prepared by the Department of Finance. It catalogs more than $66 billion in budget “solutions” that have helped create, extend and even worsen the deficit. Far from having cut the budget to the bone over the past three years, as many legislative leaders assert, taxpayers have been victims of a massive shell game.
The implication of this chart is that budget gimmicks have had a more corrosive impact on the state’s budget health than even the recession. They have permitted the Legislature to spend money – money they did not have – for years without coming to terms with the structural deficit. But the meta-message is just as compelling. By condemning this approach to patching the budget, the Gov.-elect has essentially foresworn their use – or at least made it politically much more difficult to take advantage of them in the future.
That is progress.
Will Jerry Brown challenge the status quo to fix California?
This article originally appeared in the Washington Times.
On Election Day, the once and future governor of California convinced voters that “I have the preparation, the know-how and the independence to challenge the status quo.” Now it will be up to Jerry Brown to deliver on that claim.
California’s struggles are well-known, as are its causes. We have the nation’s third-highest unemployment rate. Last year for the first time in living memory of most Californians, our economy actually shrank. No longer does the Golden State embody the American dream. People are leaving California at a faster rate than newcomers arrive from other states.
We suffer from some of the highest taxes in the nation. We have seen our education system crumble along with our roads. And the California legislature has piled up budget deficits that will haunt the state for years to come even after raising taxes by $18 billion. These days state government seems to excel only in producing regulations and fostering litigation.
Will Republicans matter in the Legislature?
Has the Republican minority in the Legislature been
driven into irrelevance by the passage of Proposition 25? It has – if you
believe the pundits and politicians, who have marked the advent of a
new age of majoritarianism.
After all, starting now, the Legislature may pass a budget bill and any
spending bill identified in the budget with a simple majority vote. It may pass
with a majority vote any substantive bill that implements the state budget and
that takes effect immediately (which incidentally immunizes that bill from a
citizen referendum). And any regular statute may be passed, as before, by a
simple majority vote.
So where can legislative Republicans find their
influence, now that these levers of governance are operated exclusively by
Democrats? I can think of four opportunities.