January 19, 2011
Let there be no doubt that California is still at the brink. With a budget deficit over the $25 billion mark and a combined unemployment and under-employment rate over 20%, it is vitally important that you stay informed, ask questions of your elected officials, and follow closely as they work to overcome the challenges that face our state.
There has been much discussion in recent weeks about a special election with select ballot initiatives developed by the Governor and Legislature that purport to solve California's budget problems once and for all. Much of the talk revolves around spending cuts and a push to raise taxes to close the near-term deficit gap.
My concerns as I track these developments are two-fold.
First of all, there is little discussion on what is needed to get our sputtering economy back on track. Without a healthy, robust, growing economy that produces stable job growth, our state's finances will remain structurally unbalanced and we will continue to face massive deficits each year. Revitalizing California's economy to effectively compete in the global economy should be a top priority. As I have often noted, and Dan Walters of the Sacramento Bee recently wrote: "It's entirely possible that California, with its high taxes, dense regulatory underbrush, poorly performing schools, congested and crumbling highways and water supply issues, may have become noncompetitive in a global economy".
Secondly, there is no discussion of overhauling and reforming state government institutions and programs in ways not unlike what I accomplished at the Department of Insurance. Whether prison reform, K-12 reform, pension reform, or MediCal reform, the question that needs to be asked is: how and what is our state government spending each dollar on, and what are the ways by which we can maximize the value of each and every dollar spent? Institutional and program reform can save billions, all while increasing productivity and efficiencies within a smaller, more accountable government.
Our state faces many challenges this year, but with these challenges comes opportunity to get at the heart of California's problems and rebuild our state.