Why the budget never adds up

But here again, no constitutional change is necessary to solve the problem. The governor and Legislature need only follow the example of Congress, which in 1990 joined with President George H.W. Bush to institute pay-as-you-go budgeting. Under "paygo," as it's known in Washington, new spending programs and increases in existing ones must be paid for with increased revenue or offset by an equal spending cut in other, lower-priority items. Tax cuts must also be paid for by either balancing revenue increases or spending reductions. This self-imposed discipline played a key role in turning the enormous federal deficits of the 1980s and early 1990s into a surplus by 2000.

Paygo isn't ironclad protection against fiscal irresponsibility. Self-imposed discipline can be shrugged off. But not easily. If California were to adopt paygo as a standard rule of the budget game, every new program, tax cut and bond measure would come with a five-year price tag and the requirement that it not create a budget deficit. Lawmakers could ignore the rule. But not without having made clear to the media and public the budget consequences of their decision -- and not without being seen as in violation of normal standards of fiscal prudence. Combined with transparent budget accounting, paygo would have made it far harder for California to dig itself a budget hole over the last decade.

* Restore political accountability for budgets. The budget reforms above would be designed to create a better-informed and more disciplined budget system. In a democracy, however, accountability to voters is the real source of fiscal discipline. And it doesn't exist in California.

The reason is the state's constitutional rule requiring a two-thirds majority to pass spending and tax legislation. By giving, in effect, a budget veto to the minority party in the Legislature, the two-thirds rule has prevented California from enacting the spending cuts and tax increases needed to correct its structural deficit. Democrats oppose deep spending cuts; Republicans reject higher taxes. Forced by the two-thirds rule to act together, they pass budgets -- almost always late and after weeks of meaningless posturing -- that enshrine both parties' contradictory priorities and make up the difference with borrowing. That's fiscally irresponsible. But when irresponsibility has both parties as co-authors, which party can voters hold accountable?

For more than 200 years, the U.S. and most of the states have operated according to the democratic principle that the party that wins an electoral majority gets to write the budget and be held accountable for its choices. For decades, California has experimented with a different principle: Requiring a two-thirds vote on fiscal issues will yield a more responsible result.

The results of that trial are in. California's credit rating is the lowest in the country. The state has been in almost constant budget turmoil in this decade, suffering deficits even in good years. The experiment has plainly failed. Democratic accountability works better. If it's real budget reform the governor and the Legislature want, it's time for California to give democracy another chance.