Complete the Rainy Day Fund Deal

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

I’ve long been a supporter of a strong rainy day fund to help get California off its roller coaster budget ride – surpluses in good times, deficits in bad economies. In recent history, the rainy day fund proposal itself has also had its ups and downs.

In 2009, I was on the Yes side of Proposition 1A, which would have created a rainy day fund while at the same time impose a two-year temporary tax. That was defeated. In 2012, I opposed Governor Brown’s Proposition 30 tax precisely because no spending reforms were tied to the measure.

Gov. Schwarzenegger managed to maneuver a rainy day proposal on the ballot but Democratic lawmakers who wanted to see a, shall we say, more pliable proposal, have managed to push it from one ballot to another. Now Governor Brown is promoting his version of a rainy day fund that he argues will work more effectively than the measure designated for the ballot.

Getting a good rainy day fund measure to the ballot is a test of the legislature to function without the carrot of more revenue. Agreeing that the perfect must not be the enemy of the good, the legislature should come together behind the governor’s proposal as long as its not amended into legislative Swiss cheese.

That could happen. Already, senate president pro tem Darrell Steinberg is pushing back against the governor’s proposal saying, in essence, let’s not do anything rash and, by the way, how can we account for greater spending within a rainy day fund proposal.

The rainy day fund should be narrowly focused on giving the state a reserve to manage in hard times, no more.

Steinberg was also a supporter of Proposition 1A in 2009. He was willing to accept the rainy day reform at that time when it came with a temporary tax increase. Well, he got even greater tax increases when Prop 30 passed. Now’s the time to bring the spending reform along to complete the deal – taxes passed, now add spending reforms.

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