Short-Term Fixes Only Delay Fiscal Train Wreck
May 12, 2003
Los Angeles Times
State has to come to terms with Prop. 13's legacy.
By David Abel and Rick Cole
David Abel is chairman of the Speaker's Commission on State/Local Government Finance. Rick Cole is the city manager of Azusa and former mayor of Pasadena.
Next month marks the 25th anniversary of Proposition 13. Because then-Gov. Jerry Brown and the Legislature failed to deal with the growing revolt against soaring property taxes, voters approved the Jarvis-Gann initiative, slashing property taxes by nearly two-thirds and imposing strict limits on future increases. In the quarter-century since, that failure of state leadership has only been compounded. No serious attempt has ever been made to deal with Proposition 13 and put in place a fair and stable system for paying for California's public services. All we've had is crass opportunism, crisis management and unintended consequences.
In January, facing an unprecedented fiscal crisis, Gov. Gray Davis promised he would veto any budget that didn't fundamentally reform state finances. "Every crisis presents an opportunity for change," Davis noted. "We would be failing in our duty to those who elected us, however, if we pass on the tough decisions and do nothing to permanently fix what we know to be broken. As California leaders address the fiscal crisis now before us, we must seize the opportunity to develop a new fiscal blueprint for California."
But with the state now literally about to run out of cash, what happened to the serious talk about serious reform?
It increasingly looks as if panic — and partisan gridlock — will stampede state officials to take the easy way out. Borrow billions from Wall Street, evading constitutional prohibitions against incurring debt without voter approval. Let an "automatic trigger" force an increase in the "car tax." Spread the remaining pain across the board, degrading every public institution we depend on for vital services.
No reform, no long-term plan and no leadership. Instead, the parties are squaring off for a recall election against the governor. Meanwhile, the rest of us wait like passengers trapped on a train careening off the tracks. Again.
Three years ago, electric rates went through the roof in San Diego, but Sacramento treated it as a local issue instead of a warning that deregulation was in trouble. The result? A preventable disaster that cost taxpayers $10 billion, which would certainly come in handy right now.
If Sacramento resorts to another shortsighted, short-term budget deal, it will only postpone the train wreck. A political "fix" will not only shortchange public safety, education and health, it will erode our standard of living and quality of life.
The only alternative is for Californians to demand a new direction. This is our state and our future. Voters approved Proposition 13. We elected the current governor and Legislature. We must hold them accountable for reforming a broken system.
What kind of reform? We aren't likely to achieve civic nirvana, but the shelves in Sacramento are filled with forgotten reports of blue-ribbon commissions, think tanks and civic experts. They recommend sensible plans for restoring local control and accountability to counties, cities and school districts. They urge consolidation of the thousands of overlapping "special districts" providing everything from rural irrigation to urban rat control. They offer long-overdue incentives for curbing sprawl and sparking urban revitalization. It doesn't take a genius to dust off those reports and write them into law. Similar reforms are working in other states, but California, once a model, has failed to keep pace.
Reasonable people will differ on the fine points. Special interests are bound to squeal. Term limits and "safe" partisan districts make it hard to get consensus. But with three-quarters of the population telling pollsters that California is headed in the wrong direction, the time has come to work on long-term solutions, not quick fixes.
California boasts the sixth-largest economy in the world. Our population of 35 million grows by half a million every year. Since 1978, our leaders have evaded the responsibility to put our fiscal house back in order. If we fail to hold them to account this year, we will all pay the price — and pass it on to our children.