Budget Breakdown: This is what recovery looks like

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(photo: adamthelibrarian/Flickr)

More than a spending plan, Governor Brown’s proposed 2014-15 budget seeks to advance and refine critical reforms to how California is governed. The budget would improve fiscal management, bolster the delivery of community services and invest in critical infrastructure.

For better or worse — and CA Fwd thinks better – the Governor’s plan is doubling down on shifts in authority to local governments and prioritizing fiscal stability and long-term investments.  It could prove to be an historic budget at an extraordinary point in time.

In previous budgets, the Governor has been successful in establishing that fiscal responsibility is not about ideology, and that debt threatens all programs, especially those serving vulnerable Californians. Through political will, he is paying off the worst kind of public debt: money borrowed to pay for operating costs. Now he wants to prevent the problem from happening again.

Governor Brown is proposing changes to a constitutional amendment on the November ballot that would limit spending and increase savings. This final fiscal reform needs to do two things:  It must manage the “spikes” in revenue by limiting its use to “one-time” purposes that do not increase costs or decrease revenue in future years. And the reform needs to strengthen the reserve requirements.

The Governor’s proposal addresses both issues. In the coming months, policymakers need to make sure the final measure adequately identifies spikes and appropriately limits how that revenue is spent. Mismanaging these spikes has created some of California’s most serious budget problems.  The better we get at managing them, the smaller the burden placed on the reserve.

One of the biggest challenges in an ever larger and diverse California is to restructure state and local governments to enable more innovation and accountability. The Governor and the Legislature have dramatically shifted authority over public safety and education programs to local governments.  But whether this change results in fewer crimes and more graduations rests entirely on implementation.

Many counties are striving to do a better job with offenders than the state prison system did. From CA Fwd’s perspective, the State needs to provide incentives and help build the capacity for counties to achieve that goal. Three specific proposals in the budget would do just that.

Through an existing grant program, the Governor wants to increase the incentives to counties to more effectively deal with offenders before they end up in prison.  The budget would put more money into mental health and substance abuse treatment, as well as into community crisis centers.  Mental illness and drug addiction are huge cost drivers and developing more effective community services is critical to safe neighborhoods and balanced budgets. And the Governor wants to put money into “re-entry” facilities that can help offenders released from prison get a better start on their next chance.

Similarly, the Governor proposes to accelerate the implementation of the Local Control Funding Formula for K-12 schools. This critical reform will give locally elected school boards more discretion for allocating resources, along with requirements to publicly develop the plan and report the results.

Accelerating reform is usually a good thing, and CA Fwd has advocated for local control in exchange for accountability. Policymakers will need to balance the desire for fast reform with the capacity of local school boards to appropriately target resources at struggling students and to understand the overarching fiscal impacts of employee contracts and other commitments.

One consequence of California’s dysfunction has been the inability to provide for the state’s long-term needs – especially infrastructure that supports livable communities, encourages job growth and reasonably accommodates nearly 40 million people on the world’s most fertile, attractive and fragile landscape.

In several ways, the Governor is revealing an emerging and comprehensive approach to supporting infrastructure that will produce sustainable communities, modern public facilities, and efficient energy, water and transportation systems.

CA Fwd’s partners in the Economic Summit have declared performance-based infrastructure investments as one of the most important steps toward vibrant job creation that increases upward mobility and reduces environmental impacts.  The Governor’s budget is a promising overture that must mature into a serious commitment to smartly invest for the next generation of Californians.

We look forward to working with the Governor and the Legislature to ensure the state’s next budget promotes true recovery. 

Jim Mayer is the President & CEO of California Forward and a member of its Leadership Council


Jim Mayer

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