Highland Community News, November 30, 2007

This week, I offer my list of reform ideas to bring the state budget back into alignment with revenues, along with names of some of the people or groups I think would be helpful.

These are permanent reforms, not merely temporary cuts. They cannot be accomplished with the usual budget work, but instead will require tremendous effort dictated by the massive crisis we face.

1) Budget reform that includes spending limits. The Cato Institute has good research how to do this.

2) Re-enact welfare reform as signed by President Clinton that had real incentives for people to go to work. Call Eloise Anderson, the former California Director of Social Services, now with the Claremont Institute, who has incredible insight on this approach.

3) Medi-Cal and Health Care reform. One quick-fix idea is for Medi-Cal to provide the same coverage state employees receive, with CalPERS responsible for cost control. Making health care more consumer-driven would have wonderful effects on the economy, the budget, and on the quality of care. David Gratzer from the Manhattan Institute understands how to do this. In a nutshell: “Consumer-driven health care is based on a simple premise: move health insurance back to a more traditional definition of insurance - that is, cover people for unlikely and catastrophic events. For smaller expenses, people should be empowered with health dollars, and thus given incentive to shop around.”

4) Return school-finance funding and decisions to neighborhood schools. Add more charter schools and e-schools. Technology will allow us to invest in fewer brick-and-mortar school settings by bringing the best instruction directly to students via the Internet. Lance Izumi, Pacific Research Institute's Director of Education Studies, is your guy.

5) Pension reform for new state workers. New state employees retirement plans should based on the actual return on the investments. Call former Assemblymember Keith Richman.

6) Infrastructure investment will allow the economy and the tax base to grow organically, without higher rates. We should dedicate a fixed percent of General Fund revenue for infrastructure, build with cash, and save ourselves the interest payments on bonds and pocket the difference. The Reason Foundation nails why we need to continue investing in roads.

7) Tax simplification to increase compliance. Call Kathleen Connell, former California State Controller.

8) Higher education independence from state support. State Treasurer Bill Lockyer has just such a “modest” reform.

There are many quality reforms that could help with the state's structural financial issues. I encourage you to ask others for their additions to this list and to stick by the convictions you expressed when you were elected - that California government needs serious, structural reform if it is to be successful again.

By Bill Leonard, Member, State Board of Equalization