Why is The Budget Always Late?

Systemic Problems Cause Budget Woes

Longtime California residents may have noticed a trend in state politics: The California State Budget is almost never passed by the constitutionally-mandated deadline, July 1. This year is no different.

In fact, the state budget hasn’t been passed on time for three years, and the Legislature has only made its deadline four times in 20 years.

When the budget is two or three weeks late, according to Fair Oaks Republican Assemblyman Roger Niello, it “rarely causes real problems.” Budgets are valid until July 15, and emergency funds usually keep programs and agencies running for several weeks.

“It’s when we get beyond the month of July that things do start to become difficult,” he said.

The reason the state budget is late can be harder to pin down. Both sides of the aisle have an opinion; however, both sides point out that the system used to pass the budget is the problem.

“[The budget] is late because you have deep ideological differences in the Legislature over what role government should play in the lives of ordinary Californians,” said Bill Bird, communications director for Republican state Sen. Sam Aanestad. “There are those who believe that government should be involved in every aspect of our lives, and there are those who believe that government should not be involved in every aspect of our lives.”

The Battle Behind the Budget
The budget process begins in January, when the governor releases his proposed budget. He revises the budget in May, taking into account the reactions to his first proposal. Then the governor’s plan is introduced into both the Senate and Assembly as bills.

The houses assign the bills to special budget committees, which divide the bill into smaller parts and send these more manageable sections to subcommittees.

The subcommittees then report to the original budget committees with any changes they recommend. Then, the budget committees in both houses make recommendations and changes to the bill, and pass it along to the floor of their respective houses.

In committee, the bill requires only a simple majority to pass and Democrats control all the committees. According to state Sen. Dave Cox, R-Fair Oaks, the committees are made up of no fewer than three Democrats and no more than two Republicans.

However, once a bill reaches the house floor it requires a “super majority,” or two-thirds of the legislators to vote for the bill. Once a budget bill has passed in both houses, a conference committee is created, with members of both the Assembly and the Senate.

This committee’s duty is to reconcile the differences in the bills from the Senate and Assembly. If they cannot, the bill is then sent to the “Big Five,” the majority and minority floor leaders of both houses and the governor. Once a deal has been struck, the budget bill is sent back to both houses, approved and sent to the governor’s desk.

The governor has the power to veto any item of the budget (called a line-item veto, and colloquially referred to as “using his blue pencil”) or sign the budget as it is.

Spending Patience
Where the budget process most often stalls in California is when the bill is voted on by the full houses.

“To pass a budget you need to get Republican votes, and I think that’s why it delays passage of the budget every year,” said Lawrence McQuillan, director of business and economic studies for the Pacific Research Institute.

Democrats essentially control both houses of the Legislature because they hold large majorities. In the Assembly, they outnumber Republicans 47 to 33, and in the Senate, they hold 25 seats and the Republicans just 15.

For the super majority, two Senate Republicans must vote “yes” on the budget bill (for a total of 27 votes), and six Assembly Republicans must cross the aisle (for a total of 53 votes).

“The two-thirds vote requirement makes it very, very difficult to reach an agreement on a budget and empowers a minority of legislators to hold up the budget,” said Assemblyman Dave Jones, D-Sacramento.

Jones suggested the budget could be put on schedule if the super majority requirement was eliminated. He points out that only two other states, Arkansas and Rhode Island, require their legislatures to obtain a super majority to pass a budget.

“It makes sense to have majority rule, that’s the rule in 47 other states, and that’s the rule in California in regard to almost every other type of legislation,” he said.

Jones said if the requirement were to be removed, the state would avoid tyranny by the majority through the system of checks and balances currently in place. Jones said the Republican governor and the budget committees would allow the Republicans ample voice in the process.

But Republicans see the budget process as a time to make their voices heard. Because a simple majority (50 percent of the legislators plus one in favor) passes most bills in the state they usually cannot muster enough votes to offer anything other than token resistance to Democratic lawmakers.

“It’s about the only time in the legislative session that they’re able to exert real influence about the structure of [a] bill,” McQuillan said. “Otherwise they’re basically ignored because they don’t have enough votes to really matter.”

Other organizations agree that removing the supermajority requirement would have a negative impact on the state.

“One of the problems though is that you’re going to probably disenfranchise a good portion of the California public…that believes taxes should not be raised, and that the level of spending should be tackled first,” said Lance Izumi, the senior director of the Pacific Research Institute.

Fixing a Broken Process
Instead of abandoning supermajorities, some Assembly and Senate Republicans recommend changing the committee structure.

Niello and Cox have both suggested in the past that budget committees be made up of equal numbers of Democrats and Republicans. The Republicans say this would make the entire process run more smoothly, and make the bill more appealing to Republicans when it leaves the committees.

“Until you get late into the month of June, you’re working with a simple majority. And then after that you begin to work with a super majority,” Cox said. “And it’s only when you have the super majority that you have the ability to get any reform.”

But procedural change suggested by either party is unlikely.

In order to change the supermajority requirement, voters would need to amend the State Constitution to repeal Proposition 13, which established the super majority requirement.

Democrats are unlikely to relinquish their control over the budget committees. Cox said when he proposed his restructure to Democratic leaders, the response he was given was not suitable for mixed company.

And the stalemate is likely to continue. Despite pressure from Gov. Arnold Schwarzenegger and pending national political conventions, lawmakers are making very little progress. As of press time, there was no budget deal of which to speak.

“You can lock them in the same room for one month, two months, three months four months, and I don’t think that giving them more time will solve the problem,” Bird said.

What is your cure for the state budget process? Should the state abandon the super majority policy for approving state budgets? Should Democrats compromise on committee assignments? Email us at [email protected]

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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