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The two-year budget: Cranking down the gimmicks and hype?

For the second year in a row, a state budget has been approved and signed on time – sort of.

The final piece will be left to voters who, weighing in as budget writers, will decide in November whether California’s spending plan will be fueled by revenues from new taxes sought by Gov. Brown.

But another budget-linked measure on the ballot also confronts voters: Whether California should move to a two-year budget cycle. Supporters of the plan say it adds stability and certainty to the budget process and lessens the interminable, high-profile political squabbles that dominate headlines. 

“Hopefully it will allow the Legislature to focus for a specific time to take care of budget issues,” said Roger Salazar, a spokesman for Taxpayers for Government Accountability and the California Forward Action Fund. California Forward is a reform group that supports the initiative.

The two-year budget proposal “gets rid of the ever present cloud that hangs over the state because the budget cycle is so overwhelming,” he said.

If California goes to a two-year budget, it will be the 20th state to do so. The 19 others include Ohio, Washington, Indiana, Minnesota and Texas.

Thirty-one states currently have annual budgets, including California, Florida, Illinois, Arkansas and Georgia.

Historically, states preferred the two-year budget, although many shifted over the years to annual budgeting. According to the National Conference on State Legislatures, 44 states enacted biennial budgets in 1940; now, 19 do.

The most recent and 12th initiative to gain a spot on the ballot, the two-year budget plan is dubbed Government Performance and Accountability Act.

In addition to establishing a two-year budget system, it also sets up performance reviews of all state programs, forces bills to be in print for 72 hours before being voted on and allows a governor to unilaterally cut spending, subject to a two-thirds veto vote override by lawmakers.

The hope is that this new system would not only decrease the fighting that goes on each year but also free up legislators to work on other pressing concerns.

The other goal of a two-year budget is to allow for more long-term budgeting, increase stability in state finances as well as offer greater transparency in the state’s budget-making practices.

Salazar believes that voters are ready for the change.

“There’s obviously a very long history in California of budgetary imbalance and gimmicks and illusions. This initiative is going to give Californians an opportunity to vote for budget reform,” he said.

But not everyone agrees that this form of budget planning is the best way to go.

Scott Graves, a senior policy analyst for the California Budget Project, questions whether implementing a two-budget cycle makes sense given that so much can change year to year. The CBP, a nonprofit group, analyzes state budgets’ impact on lower-income people and upon working families.

“Long term planning makes sense, but in California the economy changes too quickly and I think the recent past has proved that. It’s hard to budget realistically over two years,” he said.

Instead, Graves recommends focusing more on long-term forecasting rather than committing the state to a budget for two full years. He suggests implementing long-term projections similarly to how the Congressional Budget Office maps out five and ten year projections for each proposed policy change.

A part of the Government Performance and Accountability Act would prohibit the Legislature from creating additional expenditures of more than $25 million without offsetting it with increased revenue or cuts.

That section is where the California Taxpayers Association finds fault with the initiative.

According to Cal-Tax spokesman David Kline, the organization opposes the initiative because it forbids the Legislature from implementing tax cuts of $25 million or more without offsetting that source of funding.

Ed’s Note: Corrects affiliation of spokesman Roger Salazar, 4th graf.


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