State officials are spending a great deal of time, money and political capital to convince Californians that borrowing $15 billion -- plus an additional $6.4 billion of interest -- would solve the state's budget problems. But if this is a spending problem, isn't the solution to reduce spending rather than borrowing more to spend more?
A 13.4% reduction in the current rate of spending would cure the budget deficit by the end of the 2004 fiscal year without tax increases, expensive borrowing or raids on local governments. It would allow the state to begin 2005 debt free and with incoming revenue that would allow for nearly $12 billion of spending increases and tax reductions.
Opposition to this approach falls into two schools. One argues that such cuts would be "draconian" and lead to a "fiscal Armageddon." The other concedes that a 13.4% reduction is hardly unreasonable after a 35% increase in general-fund spending during the Gray Davis years, but that it is unrealistic because the Legislature would never vote to make those cuts. Fortunately, it doesn't have to.
With just two ballot measures, California could permanently set its fiscal house back in order without legislative approval. And they would not even be new laws; they would simply restore two provisions that were on the books for many years and that served the state well.