The state budget: a mixture of hope and hard choices

Governor Arnold Schwarzenegger presented his $83 billion 2009-2010 budget last week. This budget is based on hope and hard choices.

The hope is for economic recovery and for nearly $7 billion in help from Washington.  The hard choices are more cuts in government spending.  Almost every part of government will experience additional cuts with the exception of higher education that receives a slight increase.

I agree with the Governor that the Legislature must act with great urgency to bring our current year budget into balance.  Our budget problems are so severe that we cannot afford to wait to make the honest budget choices required to get our state’s finances back on track.  Also, it is imprudent, at best, to believe that California will receive any meaningful support from Washington for legitimate federal expenses born by the state, such as those associated with the incarceration of criminal illegal aliens in our prisons.  It’s critical that we get to work immediately to address $21 billion in deficits this year and next through a mixture of cuts, efficiencies and reforms.  The long-term solution to this crisis is to remove governmental barriers to economic growth and make California job creation the state’s number one goal.

Though there is no joy in such times there is opportunity- opportunity to rein in decades of profligate spending and an unbridled growth of bureaucratic control over our lives.  Progress has been made. In the last year, as a member and vice chair of the appropriations and budget committees, I played a part in trimming some $30 billion from a $100 billion budget.

Hard choices were made and even an agency (Integrated Waste Management Board) was seriously down graded. K-12 Education funding remained a priority though not the blank check some always demand, and some long needed reforms like giving local school districts more flexibility with expensive, categorically funded programs were achieved.  The mass early release of unrehabilitated inmates was averted and the citizens clearly affirmed, by their statewide vote May 19th, 2009, they were not at all interested in new tax increases.  Republicans believe that raising taxes to “fix” California’s budget mess only funds what is broken and encourages future spending.

New taxes are never the answer to California’s budget woes.  In fact, increasing the tax burden on California businesses and families will simply ensure more job losses.  With the statewide unemployment rate exceeding 12%, it is essential that the Legislature make bold, free market reforms a central component of this year’s budget process.

While most of the budget focus has been on taxes and spending, the long term answer to our budget plight is reviving the economy. Stimulating business by creating investment incentives, removing egregious disincentives, like the excessive regulations of the Air Resources Board and the Water Resources Control Board, educating and training our workforce, all are critical to achieving and sustaining economic recovery and adequate revenue to state and local government.

We must also enact meaningful budget process reforms such as a 2 year budget, more transparency in the budget process, a more accurate assessment of long term liabilities and expenditures, and minimizing budget busting litigation opportunities hidden within the reams of complicated budget language.  Bottom line:  realistic budgeting must not rely on “pie in the sky” hope, nor phantom revenues and gimmicks.

Reigning in the excessive spending and regulation by state government will require an entirely new level of discipline by this Legislature and a renewed commitment to reform well into the future.  It will require a deliberative and open budget process that respects institutional traditions and rules.

Republicans are steadfast in our belief that the path to a fiscally conservative, balance budget is to get government out of the way – allowing the creative, entrepreneurial energy of California’s people to ignite a statewide economic recovery.

With the continued confidence of the citizens of the 2nd Assembly District as the wind beneath my wings, I will work with all of my legislative colleagues to fight to restore California’s economy and return fiscal responsibility to our government.