California Special Election Measures Fail to Address State’s Fiscal Problems

Reason has just released my latest study on the ballot measures on the upcoming special election in California. Unfortunately, the propositions all would fail to address the state’s massive structural deficit and would not solve the state’s fiscal problems. As I noted in the study,

While the special election propositions have been branded by supporters as “budget reform” measures, the truth is that they are nothing of the sort. None of the propositions would make any meaningful structural reforms to the state’s broken government and budgeting process. Legislators and the governor should not be rewarded with a taxpayer-funded bailout for their fiscally irresponsible spending decisions. By passing Proposition 1F and rejecting Propositions 1A, 1B, 1C, 1D, and 1E, voters would send Sacramento a message that they are tired of its fiscal recklessness and false solutions.

California will never resolve its structural budget problems until it reins in its out-of-control spending, improves its regulatory and business climate, and significantly alters its budgeting process by adopting a performance-based budgeting system and by using the windfalls of prosperous times to buffer the financial shortages of low economies. Through its many failed attempts over the years, the state has proven that it can neither tax nor borrow its way to prosperity. It has only further impoverished future generations in the process. Sadly, the propositions under consideration in the May 19 special election represent more of the same futile “solutions.” It is time to try something new. It is time for real reform.

Moreover, Californians already pay some of the highest taxes in the nation. Imposing ever more taxes–like the $16 billion in additional taxes that Proposition 1A would authorize–to support the state’s spending binge won’t solve the structural deficit, and will only erode California’s already poor business climate, driving even more people and businesses from the state.

As I explain in the brief, real reform would include the following:

  • Imposing a debt limit and a real spending limit
  • Adopting a performance-based budget that actually ties program performance and priorities to funding decisions (rather than just increasing funding incrementally, oftentimes without any good reason, as we now do)
  • Reforming the state’s pension system to bring state employees’ wages and benefits back in line with those in the private sector.
  • Using privatization and outsourcing to provide services more cheaply and efficiently and get the government out of businesses it should not be interfering with in the first place.
  • Implementing education funding reforms like weighted student funding and teacher merit pay
  • Adopting the many common-sense reforms of the California Performance Review Commission, including eliminating some of the hundreds of state boards and commissions, consolidating programs and government functions that are duplicative or overlapping, and selling off surplus property, such as state-owned golf courses, the Los Angeles Memorial Coliseum, and the MTV beach house in Malibu.

Full Policy Brief

Press Release

See also my previous policy brief on California’s spending binge over the past 20 years or so, California Spending by the Numbers, and Reason’s other California-related research.