The Path Forward

150 150 California Forward

The state budget is still bleeding red ink. Local governments in California are facing several years of tight budgets – with consequences for classrooms and libraries, and for services to neglected children, the elderly, and the mentally ill.

These public hardships are matched with private ones – and aggravated by a growing concern that the middle-income jobs that disappeared with the recession may not come back with the recovery.

Moreover, Californians don’t believe the November elections were the remedy for what ails us. Most voters don’t believe they were given the choices that would make a difference. They know that the polarizing system and archaic rules must be changed for elected leaders to get the job done.

Still, Californians want a path forward – one right step after another. We need to stop the bleeding and start the healing, make government work again, and support economic recovery so families can pay their bills and keep their homes. A stronger economy will provide revenue to reinvest in better schools, smarter criminal justice systems, and more effective safety nets.

California needs a workout plan: In three years, honest accounting can restore trust. In five years, a culture of performance can generate better results. In seven years Californians will see strong returns –better jobs, better communities, better futures. In short, this plan must serve as a commitment by elected officials to make public programs work best where they are needed most.

Step One: Stop the bleeding and start the healing

The Governor and lawmakers must agree on an honestly balanced, well spent budget. As with any struggling business or family, the state’s deficit will need to be eliminated over time. Rather than fudging another budget based on unrealistic windfalls, policymakers should craft a three-year plan – through June 30, 2014 – that achieves balance with real cuts or new revenue. Simultaneously, lawmakers must enact fiscal reforms that keep the state from digging deep financial holes, while creating a performance-focused culture that reduces waste and improves outcomes.

Budget reforms are critical to improving results and restoring public trust and confidence. The state’s poor financial management has exacerbated the impact of the Great Recession. Lawmakers should be required to use unexpected revenue in good times to pay off debt and save for the inevitable bad times (as ACA 4 on the 2012 ballot would do). California needs a Pay-Go rule, so lawmakers don’t make promises they can’t keep. The state budget should include performance metrics – so everyone knows if we’re getting our money’s worth – along with multi-year forecasts, so we can see the long-term impacts of budget deals. Finally, lawmakers need to spend as much time reviewing programs as they do passing new laws. Together, these reforms would focus lawmakers on setting priorities and using available resources to improve results. They also are a critical foundation to the restructuring needed for high-performing state and local governments.

Step Two: Make government work again

Government provides essential services, and elected officials have a fundamental obligation to make sure programs work well. To improve results in education, social services, criminal justice, and other programs, California needs to restructure government – moving public decisions closer to the people. The local leaders responsible for delivering services need the authority to get the job done, so Californians – as citizens and voters – can hold them accountable for results. Specifically:

  1. The State should define statewide objectives and partner with local governments to reach them. Rather than micromanaging programs, the state must help local agencies learn from each other and coordinate intervention when local efforts fail.
  2. Local governments must be empowered to do a better job educating children; reducing crime, violence, drug abuse, and poverty, while supporting families and neighborhoods; and partnering with community groups and employers. This will require restructuring how California finances counties, cities and schools, and a focus on performance and results.
  3. Local governments need to work together at the regional scale to develop the workforce and infrastructure that attract the private investments that generate jobs.  The state should provide fiscal and regulatory incentives to encourage public agencies to find innovative ways to achieve the state’s goals for a healthy environment, adequate housing and better mobility.

Step Three: Reinvest in everyone’s future

The common theme of the California dream is: a good education leads to a good job and a satisfying life in this special place on Earth. Over the last generation, California’s dysfunctional system of governance has eroded our ability to solve problems, meet public challenges, and thrive in a competitive and technology-driven global marketplace. The political gridlock and poor results are a signal to private investors and entrepreneurs to go elsewhere with their ideas, dollars, and jobs.

Some governance reforms have already been enacted. Over the next decade, a new generation of lawmakers will be elected from citizen-drawn districts and through an open primary process – reducing extreme partisanship and encouraging bipartisan problem-solving. Term limit reform, if approved by voters in 2012, could stabilize the legislature and allow for a sustained effort to solve some of the larger challenges facing the state.

If lawmakers truly balance the budget and focus on performance in essential services, the state’s finances will gradually improve –along with the stability of funding for essential services and the public confidence that their money is being well spent.

Finally, if Californians come together to restructure the relationships among the state and local governments, in five to seven years we will begin to see the benefits of better governance and renewed private investment: Continuous improvement in the performance of educational and social programs will allow the state to shift resources from prisons back to universities. Efficiency and innovation in regulations will allow businesses to pay higher wages while remaining competitive. Growing middle-income jobs will reduce the demand for public services and increase tax revenue. Reinvestment in education and infrastructure will attract more capital leading to more jobs.

With diligence and persistence, California could be the new model for prosperity and problem-solving – supporting a vibrant economy, equitable opportunities, and environmental sustainability.

California Forward is committed to making this plan a reality. We will rely on solid nonpartisan analysis and seek solutions embraced by a broad coalition of individuals and groups. Californians seek – and deserve – public interest solutions that don’t tilt our democracy left or right, but make it make it responsive and competent. We want government to do – and do well – what we can’t ourselves, so the California Dream is there for anyone who will work for it.

Update Jan. 12, 2011 – View Gov. Jerry Brown’s 2011-12 budget proposal and read CA Fwd Senior Fiscal Policy Advisor Fred Silva’s blog ‘The missing piece of the budget puzzle.’


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