by Ameenah Fuller,MPP
California is suffering the worst budget crisis with a $26.3 billion dollar deficit and budget negotiations delayed for weeks. The IOUS are out in an amount of more than $470 million dollars. The government is depending on banks to honor the IOUs and government state bonds are trading for an astounding low. California was once on top of the world with Governor Pat Brown, at the helm. California was a productive thriving state. Now the tides have turned in the wrong direction and the State is facing major budget crisis. Gone are the days of good legislation and sunny days in California. The people want answers and are calling for a new Constitutional Convention to amend the 130 year old Constitution to correct some of the legislative problems.
California’s world wind crisis began with Proposition 13, which led to property tax cuts at rates of 57% and the state now depends on income tax revenue. The system only worked when the State was economically sound, but when an economic crisis hits the budget starts tumbling down. In 1998, California had a $4 billion surplus. However, State leaders agreed to a whopping $1.4 billion tax cut. These are the repeated mistakes and problems of mismanagement and bad governance by the legislators.
Budget deficits have plagued the administrations of past Governors Pete Wilson and Gray Davis with similar problems in California. Governor Schwarzenegger’s solution was raising taxes on a crippling economy and astounding unemployment rate. Governor Davis proposed a similar solution of doubling the registration fees of vehicle owners in California. Raising taxes or doubling the registration.
What is the difference? The issue is fixing the budget now or later. The problem will not be resolved until real solutions are implemented not a band aide on a gun shot wound. The 2/3 majority vote required for lawmakers to pass budgets is another old age problem that needs to be put to bed. The 2/3 rule is antiquated and only two other states in the Union practice this rule. The system jeopardizes direct democracy. The number of referendums and recall pose challenges for California legislative process. In 2008, there were 12 Referendums and initiatives on California’s 2008 election ballot. California is at fault of the Little Red Hen theory of management waiting until the bread is made then wastefully distributing the money.