Balance Your Own California Budget

As Governor Arnold Schwarzenegger and the California Assembly are reportedly nearing agreement on a budget deal, the Los Angeles Times has posted a nifty web tool on its site that allows the user to take their own stab at reducing spending in education, health and human services, law enforcement and several other areas in order to close the state’s $24 billion fiscal year 2010 budget deficit. (You can also raise taxes or increase debt to close the shortfall, though I would strongly advise against that.)

Policymakers would do well to steal a page from the Times here. It’s good policy and practice to engage citizens in a discussion of the real world trade-offs between different tax and spending scenarios, and even simple tools like this can smooth that process and make trade-offs explicit.

In fact, as I write in my new column, states should actually restructure their budgeting processes to generate public buy-in on how to fund first things first and last things last (if at all). To that end, they should follow the lead of Washington, Iowa and other states that have begun shifting to an outcome-based budgeting system in which policymakers and the public collaboratively rank budget priorities and fund the most important things first. The state government then goes down the list, most important items first, “buying down” with available revenues until they run out of money. This ensures that vital services are being funded before less-critical ones, and services not deemed of the highest importance are reduced or eliminated. Kitchen table budgeting works this way, and there’s no reason states shouldn’t do the same.