As President-elect Obama assembles his team, back here in California, the new legislature prepares to convene in less than 30 days and the governor stews about a several-billion-dollar deficit only a few weeks after the state’s supposedly balanced budget was approved.
Recently, Gov. Schwarzenegger announced the formation of a task force to come up with new ideas for getting the state’s finances back on an even keel. There’s no need to wait breathlessly for the task force report or for the new legislature to convene. The governor could get the process started right way by doing two things: (1) freezing state hiring for at least 6 months.
As employees retire, die or move on, leave their positions vacant. Those who remain will find ways to fill in. (2) take a leaf from Ronald Reagan’s book. Back when he became governor and inherited an out-of-balance budget and a state government spending daily more than its revenue, he called for volunteers to conduct a 90-day operations “audit” of every state agency and department.
The volunteers were just that, unpaid (as well as being disinterested). Most were accountants, management consultants and efficiency experts. They came up with a long “to-do” from very small (standardizing the size of file folders) to large improvements. Reagan, as governor, what he could with executive orders; the rest were sent to the legislature.
These measures won’t solve the overall budget imbalance (caused by the state spending more than it takes in), but they’d be a start. And, the governor should ask the new legislature to sign on to them so that it can take some of the credit for any gains achieved.
If they don’t take these and other measures to get the ship of state on course, California is likely to lose more business (and citizens) than it already has. This year’s Pacific Research Institute-Forbes Magazine U.S. Economic Freedom Index rates California 47th (Nevada is No. 6). The analysts studied such indicators as state spending, tax rates, occupational licensing, environmental regulations, income redistribution, tort reform and prevailing-wage laws. Sacramento has its work cut out for itself and there’s no time to lose.