It's Payback Time for California

By Peter Schrag, San Francisco Chronicle - January 3, 2010

It's a long list: the budget-process meltdown in Sacramento; the ugly combination of escalating fees and reduced programs and access at the California State University and University of California systems; the K-12 teacher layoffs and, along with them, the increasingly crowded classes; the Friday closings of state offices. Nor should we be surprised at the near-record voter-disapproval numbers for Gov. Arnold Schwarzenegger and the Legislature, or the predictions from the state legislative analyst that, barring major fixes, California faces a $20 billion deficit in the 2010-11 budget year and more of the same for some years beyond.

OK, maybe we couldn't have predicted the depth of the national and international recession that began in 2008 and is piling on here: California's official unemployment rate - 12.3 percent, tied for third-highest in the country with two other states - is close to a postwar record, with hundreds of thousands more underemployed and many more so discouraged that they've quit looking. Housing is improving, but an upward trend can't mask the fact that hundreds of thousands have already lost their homes and that more are anxiously waiting for, as one foreclosure survey put it, "the knock on the door."

But we should have known for at least a decade that California, stuck in political gridlock, was living too close to the edge, spending more than it was taking in, liquidating assets, borrowing, fudging, deferring to make each year's budget "balance." What makes the situation so dire now is that almost all the gimmicks have been exhausted and the state is no closer to fixing its dysfunctions than it was 20 years ago.

For now, we're still locked into requirements that are nearly unique among the states: Both budgets and tax increases have to be passed by two-thirds legislative majorities, which has given the Republican minority in Sacramento an effective veto on most budgetary matters. And our experiment in direct democracy, the initiative system, allows voters to pass costly spending initiatives with no provision to pay for them.

Maybe the one piece of qualified good news about California's predicament is that a lot more people have begun to notice the bad news. We have a great crowd of reform groups at work and a flurry of "fix the state" initiatives pending for the June ballot. Among those cleared for signature-gathering: a measure to reduce the two-thirds margin required to enact a budget to three-fifths; a measure calling for a constitutional convention; a proposal to legalize, regulate and tax marijuana (to increase state revenue); a rollback of corporate tax cuts enacted, despite the state's tight finances, less than a year ago; a proposal for a part-time Legislature; and a measure easing legislative term limits.

But don't get your hopes up: What may be most depressing about the outlook for 2010 is that none of the possible gubernatorial candidates - two declared Republicans, Meg Whitman and Steve Poizner, and one as-yet-undeclared Democrat, Jerry Brown - has offered anything that promises to dig California out of its political-fiscal morass. That may change after the June primary, but don't bet on it.

If you're looking for year-end cheer, there's always the sunshine and the beaches, and the somewhat comforting thought that California isn't the only state in deep budget doo-doo and run by a dysfunctional government. New York's Legislature makes California's look like a model of smooth-running efficiency. The public colleges in Florida, New York and Illinois are as overcrowded and underfunded as ours. Our governor hasn't yet been impeached or gone on mysterious hikes on the Appalachian Trail or resigned in midterm. Happy new year.

Peter Schrag, the former editorial page editor of the Sacramento Bee, is the author of "California: America's High-Stakes Experiment." This commentary first appeared in the Los Angeles Times.

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