(photo credit: jerry1778a)
One more holiday tradition has come and gone: The pundits have declared the important stories of 2013 and prognosticated on what to watch in 2014. But don’t be dulled by tradition.
Many of these lists contained five issues that are all about money – and something even more important, the future of California.
The state’s $2 billion estimated surplus this year is not all that big in the scheme of things, just 2 percent of state spending. But what policymakers do with the extra cash – and what they do with the constitutional amendment for managing surpluses on the November ballot – will determine whether vital public services continue to ride the boom and bust roller coaster.
CA Fwd has long advocated for managing “one-time” revenue, largely capital gains from a booming stock market, as if that money were a Christmas bonus and not a permanent pay raise. Save for hard times, pay down debt, pave roads or build schools are all appropriate choices for spending revenue unlikely to be there next year.
History shows that we are better off if some common sense fiscal rules are in the constitution, and this is one of them. A proposed amendment was agreed to by Gov. Schwarzenegger and lawmakers in 2010 and is set to be on the November ballot. The measure can be improved, but reform is essential to stable funding for critical programs.
Beyond the budget: Jobs, infrastructure and jobs.
The second money decision for 2014 will deal with long-term investments in the kind of infrastructure that will enable California to prosper and not just grow. Whether it is highways, high speed rail or the delta tunnels, policy-makers are gearing up to invest big in making California a viable place to live and work for the next generation.
These investments must deliver more value for dollar spent. They must reduce our environmental footprint and at the same time prepare California for climate change. And they will need to pay for themselves.
Infrastructure investments will be the next big test of voter confidence in government. CA Fwd and its partners in the Economic Summit have articulated smart principles that should guide these choices, including performance approaches and public-private partnerships.
The third big money issue is the economic recovery itself. As highlighted at the Summit, California’s steward leaders are committed to restoring upward mobility and not just profits. California’s leadership must assertively work to broaden the creation of jobs and increase the resiliency in the state’s regional economies.
Nothing else matters if California cannot figure out a way to restore manufacturing and other well-paying production jobs. California will lose its ability to draw talent, to the public and private sectors. State and local governments – dependent on the income, sales and property taxes paid by economically successful Californians – won’t have the revenue to invest in quality services, including infrastructure and workforce development.
January 2014 is the 55th month of this economic recovery. The average time between the last five recessions was 68 months. Tick tock.
Your dollars – and theirs – at work.
The fourth money issue is how more than 1,000 school districts and 58 counties will use the discretion granted by the state to make better use of $9 billion a year dedicated to education and public safety. Counties are entering their third year of building community corrections to replace the state’s failed prison system and school districts are just beginning to reallocate dollars to improve student success.
California needs to seize this critical moment in time to build governance models that replace muddling along with accelerated improvement. That’s why CA Fwd has been working with counties to develop integrated plans and performance-based decision tools. Our immediate safety and our long-term vitality are at stake.
The fifth money issue is campaign contributions. The big story in the 2012 elections was that more than $651 million were spent on state candidates and issues that year – and it was an off year for statewide offices. More than the amount of money spent, the inability to follow the money spent by large, faceless donors poisons the health of democracy.
It is probably unrealistic to expect elected officials to change the rules that fund their own campaigns. But they have an opportunity to empower – and even insist – that regulators use modern information technology to implement current disclosure rules to their full potential. While it is hard to get money out of politics, technology-enabled transparency rules should be as smart as our phones.
These five money issues will determine the state’s fiscal health, the vitality of California’s regional economies, the self-sufficiency of families, the quality of public services and the public’s trust in their own government.
Rather than just watching, that’s a list worth working on.