Monday, August 4, 2008

California Budget Impasse

Under the California Constitution the State Legislature is obliged to approve the annual state budget for the period July 1st to June 30th by a minimum two-thirds vote of its members by June 30th. It is now about five weeks past the deadline and a budget has not yet been passed! In the last twenty years the budget has only been passed on time four times! Critical state services cannot be funded without an approved budget. The state will run out of money by the end of September at the latest, if no budget is passed. Folks, this is serious, ridiculous and unacceptable!

The most recent budget draft calls for general Fund expenditures of roughly $101 billion and total state funds expenditures of roughly $141 billion. As a reminder, the three largest categories of expenditures are K-12 Education, Health and Human Services, and Higher Education. Right now, based on projected state revenues, it looks like we will have a budget shortfall of between $14.5 billion and $15.2 billion!

Somehow the budget shortfall must be eliminated in the next week on a bipartisan, reasonable and pragmatic basis, and the final balanced budget must be approved by a two-thirds majority. Then the governor must sign off.

Governor Schwarzenegger and legislative leaders met in his office yesterday to try to settle the stalemate we now have without success. To deal with the impending crisis and put more public pressure on the legislature, the Governor laid off more than 10,000 state employees and issued another executive order to temporarily cut the wages of other employees to the federal minimum wage of $6.55 an hour. This was probably not entirely fair, but might have been necessary as a needed wake-up call.

The media, the voters and the Governor need to urgently and loudly make it clear to the legislative leaders that, to correct this major problem, we all favor a constitutional amendment requiring a budget to be balanced annually and on time. If this is not accomplished, the amendment will mandate that legislative members will receive no salary at all until the budget is balanced and approved. Reinstatement of salaries will not be retroactive. Lists of those not voting in favor of the final majority will be widely published and voters will be encouraged to make every effort not to reelect any of them. We can work to have the amendment on the ballot in November, if need be. Another step to be considered for the future is changing the requirement for budget approval to a majority vote, rather than the current two-thirds.

Carried out effectively, the above actions ought to get the attention of the party leaders and their colleagues. We are accountable for our actions. We are paying for their high salaries and benefit packages. They are our public servants. Finally, they need to be accountable for their actions and inactions! This is a no brainer!

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