In November 2010, California voters decided to stop tolerating state legislators’ annual refusal to pass a balanced budget by June 15th each year. They passed an initiative that requires the State Controller to stop paying the errant legislators when they fail to meet their constitutional mandate to produce a balanced budget by that date. And that pay is gone forever – no retroactive pay allowed.
That strategy seemed to work: for the first time in anyone’s memory, the legislature passed a budget on June 15, 2011. Everyone celebrated, most of all the legislators, who believed they had saved their paychecks.
The celebration was short-lived: Governor Jerry Brown vetoed the budget the very next day, saying that it was not a balanced solution to the state’s financial woes. In fact, he was quoted as saying that the budget that was passed contains “legally questionable maneuvers, costly borrowing and unrealistic savings.”
Personally, I call that budget the “Save our (California legislators’) paycheck” budget.
Legislators reportedly were outraged. After all, they passed a budget, didn’t they? And didn’t it show that revenues matched expenditures?
Well, not exactly. The Governor had promised voters a “gimmick-free” budget this year, and in his view, this budget did not pass the “no smoke and mirrors” test. In fact, his assessment of a gimmick-laden budget was backed up by the State Controller’s analysis, which found that while the budget committed the state to spending $89.8 billion, it only provided revenues of $87.9 billion, leaving a shortfall of $1.85 billion.
Now legislators are REALLY mad: the Controller’s assessment came with the news that because the budget was not balanced, their pay and per diems would be suspended until they pass a budget that does meet the “gimmick-free” criterion. One Los Angeles Assembly member was quoted as saying, “I now have to explain to my wife and daughter that we won’t be able to pay the bills because a politician chose to grandstand at our expense.”
Welcome to the world of tens of thousands of Californians, whose financial situations are fraught with uncertainty each year when the legislature engages in its own form of grandstanding when it chooses not to meet its constitutional mandate of passing a balanced budget by June 15th. Institutions that rely on state funding, for example, have been forced to pass their own budgets without knowing how much money to expect from the state – if any. In the past few years, the state actually decided to issue IOUs in lieu of cash because the budget had not been passed. How well do legislators think that asking one’s landlord or bank to accept an IOU in place of a rental or mortgage payment will go over? Now they have an opportunity to find out themselves.
There are at least two related lessons to be learned here:
1. Be very specific when asking for what you want or need.
In this case, the voter-passed initiative said the budget must be balanced. Alas, it apparently did not define the term “balanced” in a way that made it crystal clear to legislators that their constituents would no longer tolerate their annual “smoke and mirrors” approach, but instead must pass a budget that actually balances when held up to the light of day.
2. Be careful of what you ask for.
By putting legislators’ pay at risk (as it relates to passing a balanced budget), voters caused lawmakers to focus on passing a budget. This seems to be a good thing, doesn’t it? Unfortunately in their haste to save their paychecks, the legislators neglected to take care of a few critical details. According to the State Controller, for example, the budget relies on a variety of fees and taxes to raise revenue – but lawmakers didn’t pass the legislation necessary to collect that revenue. Apparently the initiative should have said that intentions don’t count – there actually must be mechanisms in place in order for the budget to be balanced in reality.
So we’re back to smoke and mirrors. At least the legislators are not getting paid to not produce a balanced budget, which may jolt them back to reality. In the mean time, Californians across the state are suffering – again – because lawmakers –again – aren’t doing their constitutional duty.
I can’t wait for the next step: perhaps an initiative that makes the failure to pass a truly balanced budget by the constitutional deadline a terminable offense? No waiting till the next election either: no balanced budget, no job.
What’s your suggestion for getting the message across to politicians?
© 2011 Pat Lynch. All rights reserved.