California Forward Action Fund Reform Initiatives Built On Lessons Learned From Other States

SACRAMENTO – The California Forward Action Fund has submitted a pair of nonpartisan initiatives built for California based on best practices used by other states and successful business to balance budgets, produce better results for citizens and taxpayers and reduce waste:

The Best Practices Budget Accountability Act allows budgets to be approved by majority vote, but also requires the Governor and Legislature to cut waste by improving oversight of programs and finding a way to pay for new programs before they start. It also forces members of the Legislature to forfeit their pay if the state budget is late.

The Community Funding Protection and Accountability Act allows our schools and local governments – who deliver basic services like education, police service and road repair – to keep their funding from being borrowed or diverted by Sacramento. It also encourages local governments to work together to set community priorities, and provides new resources for local officials willing to be accountable to voters and cut waste.

“California has always led the way, in jobs and technology, education and quality of life. We need comprehensive reform to get our state moving again so that California can lead again,” said California Forward Action Fund Co-Chairs Robert M. Hertzberg and Thomas V. McKernan. “Politics as usual won’t solve our problems.”

The California Forward 2010 reform plan was presented earlier this year to state leaders. California Forward Action Fund leaders will continue to work with Governor Arnold Schwarzenegger, Senate President pro tem Darrell Steinberg, Assembly Speaker Karen Bass, Senate Minority Leader Dennis Hollingsworth and Assembly Minority Leader Sam Blakeslee to bring a comprehensive reform plan before voters on the November 2010 ballot.


Frequently Asked Questions About the California Forward Reform Plan

California’s budget seems to be in a constant state of crisis. How would this plan change things?

Our plan replaces the partisan bickering that’s come to dominate Sacramento with non-partisan, common-sense reform, such as requiring every major program to set clear goals, regularly reviewing programs to make them more efficient, using unexpected spikes in revenue to pay off debts and forcing the Governor and legislators to identify a funding source for new programs or tax cuts right from the start. And as an added incentive, the plan calls for lawmakers to forfeit their salaries and expenses if the budget is late.


How does the reform plan change the number of votes required to pass a budget or increase taxes?

The plan – in combination with other fiscal reforms – allows a budget to be approved by a simple majority vote, the threshold used by most other states. The plan would keep the 2/3rds majority requirement for any tax increase.


How does the plan affect the number of votes required to impose new fees?

The plan would not allow new fees to be used to replace existing tax revenue to balance the budget without a two thirds vote, but does not change the majority vote requirement for user fees or environmental mitigation.

How would the reform’s pay-as-you-go plan work? Would it create a spending cap?

The plan doesn’t cap spending, but it requires the Governor and lawmakers to decide how to pay for new programs or tax cuts at the time they’re approved. Restoring past budget cuts, spending to keep up with population or inflation, one-time expenditures and low-cost programs would be exempt from pay-as-you-go requirements.


Does the plan change the vote requirement to approve local tax increases?

The reform plan leaves in place the two-thirds majority vote requirement for tax increases to fund specific services required by Prop. 218. It allows a majority vote for an additional one cent of local sales tax shared by counties, cities and school districts when local governments create a plan to improve services, streamline operations and eliminate waste. Such plans would have to be resubmitted to voters every 10 years.


How does the reform plan effect funding for education?

The plan fully protects Prop. 98, California’s minimum funding guarantee for our schools. In addition, local schools would benefit when local governments collaborate on long-term plans to address community priorities.


How does the budget reform plan effect state employees?

The plan honors the collective bargaining rights of public employees. Negotiated labor agreements to provide cost-of-living, salary or benefit increases would not be affected


What sources of local revenue would be protected under the plan?

The plan protects all locally levied taxes, such as property taxes (including redevelopment funds), utility taxes and hotel taxes. It also protects the local share of the sales tax on gasoline.


Would the plan give the Governor more authority to make mid-year cuts during a shortfall?

The reform plan gives both the Legislature and the Governor new tools to address a fiscal emergency. It allows lawmakers to make changes to the budget by majority vote. If the legislature fails to pass legislation addressing a fiscal emergency, the plan gives the Governor limited authority to “blue pencil” appropriations included in the last budget.


How are these proposals different than the call for a Constitutional Convention?

A convention would bring several hundred volunteers together for a limited time to discuss many possible ways for changing California’s Constitution – there’s no telling what decisions they would make. The California Forward plan instead takes specific policies that are already working in other states and puts them to work in California, helping us balance our budget, improve services and reduce waste.


Who’s behind the California Forward Action Fund, and how were these proposals developed?

The California Forward Action Fund seeks to implement reform proposals created by California Forward, a nonpartisan organization funded by foundations with no political ties or partisan agendas. The group’s proposals were developed through exhaustive research of policies being used by other states and successful businesses, and refined by hundreds of discussions with Californians across the state.

California Forward was launched in 2008 in response to a request from the California Endowment, the Evelyn and Walter Haas Jr. Fund, the William and Flora Hewlett Foundation, the James Irvine Foundation, and the David and Lucile Packard Foundation. You can find out more about California Forward at

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