Earlier this year, in light of California’s ongoing budget disaster, the San Diego Regional Chamber of Commerce put together a State Budget Task Group to come up with recommendations to cure the state’s fiscal ills. The task group recently finished its list of recommendations, and I am quite impressed by them. I was pleased to see that many of them are ideas Reason has been advocating for years. The recommendations have not yet been voted on by the Chamber’s Board of Directors, and there is no guarantee that some–or any–of them will ultimately be approved by the Board, but the mere fact that there are other groups coming up with ideas like this is certainly encouraging.
Here are the task group’s recommendations:
STATE REGULATION OF BUSINESS
- Do not impose further regulations, taxes, reporting requirements on business in California.
- Conduct a comprehensive review of state business regulations.
- Eliminate those causing a financial burden and driving business out of state.
BUDGET STRUCTURAL CHANGES
- Place a hard cap on future increased spending and place excess revenue into a reserve fund.
- If there is no approved budget by the constitutional deadline, new spending bills may not be passed.
- Identify core budget needs for truly essential state services (e.g. education, healthcare, etc.) that would continue to be provided even if there is a budget impasse.
- The state should move to a 2-year budget cycle that would minimize serious spending fluctuations and require better planning.
- Legislators do not get paid (including per diem), or only receive minimum wage, if the Legislature does not pass a budget by the constitutional deadline.
- Eliminate car allowances and cell phones for state employees or have these benefits taxed as income.
CONSOLIDATION AND/OR ELIMINATION OF STATE AGENCIES
- Consolidate, eliminate and streamline bureaucracy.
- All school districts should be unified.
- Evaluate small school districts for consolidation to save on overhead and administrative costs.
- Evaluate fire, water and library districts for consolidation to save on costs.
- Health and Social Services should be one agency.
- Reduce costs through outsourcing of health and social services functions to non-profits.
CORRECTIONS REFORM
- Privatize and outsource the prison system.
- Change sentencing requirements for non-violent offenders to reduce prison populations.
EDUCATION
- Allow market-based tuition for high-demand California universities (e.g. Berkeley, UCLA, UCSD and SDSU).
- Repeal Prop. 98, revamp education financing to eliminate mandatory funding requirements.
- Move to create quality performance based education to create efficiencies and lower costs.
- Allow school districts local control on categorical funds on a permanent basis.
IMMIGRATION IMPACT/COST TO THE STATE
The State Legislature must engage in evaluation of comprehensive immigration reform and solicit additional federal impact funds as mitigation. The estimated impact to San Diego County was $101 million in 2006.
PENSION REFORM
- Restructure all pension plans to move away from defined benefit toward defined contribution.
- Place a cap on lifetime health care for retired state employees at a level that ensures program sustainability.
- Eliminate programs that allow for employees to draw from both salaries and pension programs.
REFERENDUM REFORM
- Ensure accurate information is provided to the public.
- Increase the percentage of signatures required to quality a measure.
- Disallow per signature pay rates or bonuses.
- Require 2/3 vote for passage on initiatives with an impact on state funding/revenues.
REVENUE & TAXATION
- Enact tax reform – move toward fairer, broader-based (as opposed to higher) taxes.
- Make state taxes a simple percentage of federal taxes.
For more on California budget reforms and the state’s spending problems, see:
- California Performance Review Commission report (1,200+ recommendations that would save the state $32 billion over 5 years)