Challenges abound, but history can guide lawmakers

California faces many challenges in the new year–challenges that require our immediate attention.

As history has shown, should we fail to act, we may not be happy with the solutions forced upon us. Among the priorities of Senate Republicans are reforming California’s health-care and prison systems, investing in water storage and delivery and solving the state’s chronic budget crisis.

These are particularly important because the longer we wait, the worse and more costly the problems become to fix.

Health-care costs continue to rise and taxpayers are being asked to pay a higher and higher share of these costs. Private health-care premiums have more than doubled since 2000, bringing the average annual premium for family coverage to almost $11,000 in 2005. Last year alone nearly one-half of all births in California were paid for by Medi-Cal or other governmental programs.

Republicans always have insisted on more choice for consumers and less regulation. In health care, this means reducing government-mandated coverage. Senate Republicans want to reduce the regulatory burden and allow consumers more freedom to choose their options for care. California has almost 50 mandates, including requirements that all policies cover services, such as alcohol and drug treatment, in-vitro fertilization and acupuncture. These mandates have increased costs by as much as 30 percent.

We also need to encourage individuals to obtain catastrophic health-care coverage by offering expanded tax incentives for those who purchase such plans by conforming state tax law for Health Savings Accounts to federal law. By doing this, we eliminate the tax preference for employer-sponsored coverage and make health insurance more portable and accessible to the consumer. Unfortunately these reasonable reforms have to compete with the inevitable return of the single-payer, socialistic, inflexible, universal-coverage schemes similar to what the governor wisely vetoed last fall.

One of the most glaring pieces of unfinished business left at the end of the last legislative session is California’s dangerously overcrowded prisons. If allowed to deteriorate further, the courts may well take the issue entirely out of the Legislature’s hands, as they have done already with the prison health-care system.

The unavoidable solution is that we must build new prison facilities. According to the Department of Corrections and Rehabilitation (CDCR), we are on pace to exhaust all prison space, including classrooms and gymnasiums, by the summer of 2007. The governor’s decision to transfer some inmates to facilities in other states is a suitable stopgap response, but we cannot allow the situation to grow worse.

How bad is this situation? Every month 18,000 inmates are securing early releases from county jails throughout California because of overcrowding. Some in Sacramento call the early release of inmates “sentencing reform,” and are looking to accelerate early paroles and implement widespread sentence reduction to cope with the prison crisis. This approach makes no sense. We should not reward criminals and jeopardize the law-abiding because we’ve failed to keep prison construction in step with the increase in inmate population.

One of California’s most precious resources is water. But the infrastructure that stores and delivers this vital substance to California’s farmland, manufacturing centers and drinking reserves increasingly has been strained despite abundant rainfall over the past few years.

Estimates of future water needs vary widely, but, according to one study by the PPIC, California’s water needs will jump 40 percent in the next 25 years. While those figures represent a high-end scenario and likely overestimate future water use, there is no question that, at this point, the water balance likely will get worse rather than better.

While groundwater supplies have grown in recent years, construction of surface storage is slowing significantly. Since the drought of 1987-92, only two major surface-storage projects have been built. Together they total an amount that represents less than 3 percent of California’s existing developed water supply.
Another pending problem is the constant threat from environmental litigation and competing interests. Water supplies are too important to be placed in jeopardy.
Finally, this Legislature must act responsibly and get a handle on California’s enduring structural deficit. Some will demand an increase in taxes; Senate Republicans will not ask taxpayers to foot the bill for the state’s fiscal mismanagement.

One thing is clear: California has a spending problem, not a revenue problem. Last year spending rose by $8.5 billion over the previous year, which explains the more than $5 billion operating deficit we must close in the 2007-08 budget. With the once white-hot housing market cooling, there’s little chance for a last-minute miracle influx of cash this year to bail us out. The budget that Senate Republicans intend to support will contain no new spending, nor any new fees.

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