Gov. Brown’s state budget proposal is another failure of his administration to implement a reasonable, rational and responsible budgeting approach. Instead of encouraging fiscal responsibility, his plan utilizes phantom budget cuts, raises taxes on job creators and relies on gimmicks that will only increase California’s already massive deficit.
Looking at the entire budget proposal is a mixed bag of tax increases and unrealistic cuts. The 35% proposed tax increase on the rich, which requires voters to approve a ballot measure in November, is apparently going to fund education. However, in reality over 50% of the tax increase goes to fund state employee pensions and health care costs.
Part of his “cuts” includes $402 million he hopes to cut from state workers’ compensation. This is not a done deal and Gov. Brown is currently in negotiations with them to take a 5% pay cut. Many close to the negotiations believe that this cut will not occur and there will be a $402 million hole in the budget.
There are many other fundamentally flawed and impractical aspects of Gov. Brown’s budget. And this is all coming from the state that is rapidly becoming a welfare state. It has 12% of the nation’s population but 33% of welfare recipients. This exemplifies why 1.5 million Californians have voted with their feet and left the state during the past decade.
According to a majority of budget experts, including State Budget Solutions, California leads the nation in deficit amount. And due to inaction by the legislature, California’s budget deficit for next year has nearly doubled over the last 4 months.
It is time for Gov. Brown to stop using gimmicks to balance the budget and to fully support legislative efforts to adopt performance based budgeting, also known as Reality-Based Budgeting. This budgeting strategy forces all legislators to take four key steps at the start of every session. Lawmakers should start by asking, “What must the state accomplish?” Then they must identify how the efficacy and efficiency of services will be evaluated. The third step is that they must determine how much money the state actually has. Finally, government officials must establish what is the most effective and efficient way to deliver essential services given the forecasted revenue.
Reality-Based Budgeting eliminates budget gimmicks and accounting games. It provides state legislatures the opportunity to examine how much funding is truly needed for each government service or program.
California needs to determine the core functions of government and implement performance based budgeting. In addition, the state needs to fix its anti-job creation climate by reducing taxes, regulations and energy costs. If it fails to do so, California is heading for bankruptcy just like Stockton, California.
Bob Williams, President of State Budget Solutions, is a former Washington state legislator, gubernatorial candidate and auditor with the Government Accountability Office.