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On One Side the Nihilists, on Another a Nightmare; a Budget Lies in Between

June 11, 1989|JOHN GARAMENDI | State Sen. John Garamendi (D-Walnut Grove) is chairman of the Revenue and Taxation Committee

The Legislature and the governor have a unique opportunity to restore public confidence in government as they get ready to pass the state budget this month. Or we can blow it again.

Our record needs improvement. We need look back only as far as last November, when voters were asked to sift through five competing insurance reform measures--a job that should have been done in the Capitol.

Now before us is a more fundamental challenge: to relieve a real funding crisis in the state. Even through we have a sudden $2.5-billion surplus, we are hamstrung in spending it by the combination of an outdated spending limit and the implementation of Proposition 98, last year's voter-approved guarantee of funding for education. In the meantime, we continue to have growing transportation and health-care problems that need our attention.

There are several scenarios that, if played out, invite major failure.

--The nihilists would sacrifice gains for health care, mental health, community services and other crucial programs to award all available surplus funds to education. Their argument is that Proposition 98 was so onerous and unmanageable that the people should suffer its consequences. Then surely, next time around the people would destroy the monster by repealing the measure.

But what about the damage that occurs in the meantime to a host of other services already strained to capacity?

The outcome of such a nonsolution would be a civil war between competing programs. Fortunately, this is an outcome that even the education community is seeking to avoid.

--Republicans would tie any reasonable budget compromise to elimination of cost-of-living adjustments (COLAs) for health and welfare programs. This idea drags out an issue that has divided the Legislature along partisan lines for many years.

The only reason for having COLAs is to prevent the budget from being balanced on the backs of the least fortunate. In tight budget cycles, COLAs are suspended, as they have been in three of the last 10 years. In the world of a $2.5-billion surplus, COLAs are not relevant.

--Some legislators would eliminate the current spending limit in exchange for a limit on revenues by requiring voters to approve any and all tax increases. Not only would this represent a complete abdication of responsibility by the Legislature, it also opens the floodgates to passing off more and more issues to the voters.

This irresponsible and impractical idea would create an unworkable ballot. Last year, the Legislature considered almost 300 proposals dealing with taxes, tax credits, tax deductions or rebates. The governor signed 80% of the proposals that reached his desk--a total of 98 measures enacted into law.

Most voters thought that the record number of propositions on last November's ballot (29) was outrageous. Try to imagine voting on 100 tax proposals!

We must avoid any of these outcomes. In the days ahead, the Legislature and the governor must balance the needs and agendas of competing interests and hammer out a viable fiscal structure for California.

Luckily, there is good news: All of the elements necessary for a compromise are in place.

The governor's consensus-building approach in dealing with the spending limit, Proposition 98 and transportation funding represents a breath of fresh air.

The Republicans' decision to refrain from calling for an immediate rebate of unanticipated revenues is an acknowledgement of the near-desperate state of vital needs, like roads.

The business community has rallied to deal with the problem posed by the state spending limit. Their Project '90 coalition includes labor, charitable and community organizations and transportation interests. This broad spectrum reduces the prospects for a repeat of last year's divisive battles over two unsuccessful spending limit initiatives, Propositions 71 and 72.

State Supt. of Public Instruction Bill Honig and education leaders have taken a thoughtful approach, which ensures that the gains of Proposition 98 don't come at the expense of other services.

Now if we can put our ideas together and sort out our differences, we just might prove that representative government can work in California.

If not, look for those initiatives to multiply before your eyes, and for our problems to become even more unmanageable.

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