Budget, Budget, Who’s Got The Budget?

Mick Jagger of the Rolling Stones reminds us, “You can’t always get what you want, but if you try sometimes, you just might find, you get what you need.”

That’s the tune Governor Jerry Brown is singing to both Democrat and Republican state Legislators as he tries to close a $26.6 billion hole in our state budget.

Painful cuts that impact our most vulnerable populations. Temporary tax extensions reviled by many. Almost nothing is sacred. Nothing is spared.

What needs to be added to this critical debate are centrist ideas that offer hope to 38 million Californians, especially the two million, 12.4 percent, who are unemployed and millions more who are under-employed. These ideas must answer the question on the mind of every Californian, “If I accept painful budget choices over the next few years, what will be done to fix our state?”

Put simply, if we must have a budget that hurts, what short-and long-term solutions provide hope?

We offer our Governor and Legislature four substantive steps:

  • Build a Strategic Plan for Jobs and the Economy: Which elected official in Sacramento does not conduct “opposition research” on an opponent? Which CEO worth his or her salt doesn’t conduct a comparative analysis of the competition? Yet California, the 8th largest economy in the world, doesn’t evaluate the strengths or weaknesses of our competitor states or nations, let alone have a strategic plan to grow jobs and boost our economy. Step one – create a plan. Reach out to business leaders in each key economic cluster driving California’s economy. Reach out to business associations who represent regional economic engines. Seek out their unique and common needs to stay competitive against other states and nations. Build a plan. Then, perform to plan.
  • Enact meaningful budget and governance reforms: California Forward, funded by the Irvine, Packard and Hewlett foundations, has evaluated the other 49 states, assessing budget and governance reforms that have been proven effective might be replicable here. Several substantive proposals have emerged: Two-year budget cycles allow more flexibility and better account for the ebbs and flows of a dynamic economy. Budgeting for performance to ensure government accountability so that all public programs can be evaluated for success, fixed or de-funded. A Rainy-Day Fund implemented by 33 other states to save in times of plenty and use in times of need. Pay-As-You-Go principles ensuring all legislation and statewide initiatives clearly identify funding sources, or cuts, to cover any new programs, as a condition to being put on the ballot.
  • Adopt thoughtful pension reforms: There is no silver bullet for this emotionally charged and complex problem, which reputable studies place as high as $500 billion in unfunded pension liabilities. But any set of solutions should include these three: A tiered approach that differentiates the benefits received by current employees and those enjoyed by future hires; a fresh look at the retirement age for most state employees; and finally, a marked shift from the risk inherent in retirement savings for public sector workers away from the taxpayers who help fund benefits that are often at levels greatly exceeding what they receive from their own jobs.
  • Approve sensible regulatory reforms: Appropriate, focused regulations can still protect the health and safety of our workers and protect our environment. In the past six years, Oregon’s Office of Regulatory Streamlining has revamped the state’s regulatory framework to save the state’s businesses more than 100,000 hours per year, 1.4 million sheets of annual paperwork and an annual cost savings for businesses of $15 million.

We urge state Legislators and the Governor to find common ground, both on the perennial budget deficits plaguing our state, but also on the structural issues that hold back a healthy and vibrant economy.

This budget has items everyone can hate and everyone can love. Done right, legislators may not get everything they want, but Californians can get what we need: a balanced budget and a path forward for fiscal and economic health.

This editorial appeared in the OC Register on Monday, March 28, 2011. It was written by Lucy Dunn, President and CEO of Orange County Business Council and Carl Guardino, President and CEO of the Silicon Valley Leadership Group. They Co-Chair the Statewide “Regional Economic Association Leaders” – REAL – Coalition.

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