February 9, 2009

Assembly Report

Budget and budget problems continue

By Assemblymember Jim Beall, Jr.
Special to the Times

The economy is tanking. Budget deficits are blooming from Washington, D.C., to Sacramento. Every state and every city is suffering from the collapse of the housing market and the failure to properly regulate Wall Street financial firms.

While California’s revenues have plummeted, unemployment has risen. What does this mean for our state? We can expect more and more people to turn to our state’s health and human services for help – even as California faces a projected $42 billion deficit during the next 17 months. The governor wants to balance the budget by cutting education — trimming a week from the school calendar; paring Medi-Cal; reducing assistance to our blind, aged and disabled; and borrowing more money.

I don’t agree with most of what the governor has proposed. I don’t like the idea of balancing the budget on the backs of our kids, seniors and the infirm. I’d like to believe we’re better than that.

I’ve been a public servant for more than 27 years, serving as a San Jose city council member, a Santa Clara County supervisor and now as a member of the California State Assembly. I understand how government works not only at the municipal level but also at the state level. And I deeply understand how government affects people’s lives.

So here, in a nutshell, are my seven suggestions on how we can restructure California to help us through economic downturns and reduce needless spending.

Change the state constitution to allow a majority of the legislature to adopt a budget
The current two-thirds majority requirement has led to political stalemates and prevented us from enacting long-term solutions to fix California’s fiscal problems. In addition, the change would also enable the Legislature to pass a budget by the June 15 deadline – and if it doesn’t, I promise to cut my state salary again. Last December, I voluntarily cut my own pay and per diem – my own contribution toward cutting the deficit.

Adopt a multi-year budget
Right now, we draft a budget every year and with the way the economy has been under-performing, lawmakers have had to revise it almost on the fly. But a multi-year budget approach provides stability, a framework to examine issues and set our priorities so when dire times come we will already have a political consensus on what areas can be cut.

Avoid losing billions in federal matching money and other available funds
We can’t toss away available federal monies. In my economic stimulus letter to House Speaker Nancy Pelosi, I asked her to release $360 million in unused Medicaid that has been appropriated for California but has not yet been given because of inefficiencies at the state level. The governor’s recommended $1 billion-plus in cuts for health and human services would translate into fewer federal matching dollars for Medi-Cal, a loss of revenue that compounds the state cuts.

Step up recover of delinquent state taxes
About $6.5 billion goes uncollected every year. I believe the state should go after that money by beefing up enforcement – adding more agents to the Board of Equalization, an outlay in personnel that will more than pay for itself; instituting a tax amnesty program; and raise fines.

Close tax loopholes
The California Tax Reform Association estimates the state loses $17 billion annually because of antiquated tax breaks. Let’s re-evaluate them.

Control borrowing
Let’s pay as we go. If we have to borrow, let’s make sure it’s for projects that generate jobs.

Improve the initiative process
If an initiative is going to affect the state budget, the petitioners of that initiative should be required to explain to voters how that ballot measure will be paid for.

Jim Beall Jr. is a member of the California State Assembly, representing the 24th District, including Willow Glen, Campbell, South San Jose, West San Jose, Saratoga, and portions of Santa Clara, Los Gatos, and North San Jose.