August 24, 2004 - From the August, 2004 issue

Assemblyman Richman Laments State Budget & Capitol's Short-Term Thinking

Among the reform-minded legislators in Sacramento, there was a lot of anticipation regarding the prospects for structural improvement during this year's budget negotiations. After all, Gov. Schwarzenegger appeared to have a window of opportunity to push through significant reform after the recall election and his demonstrated ability to maintain a lofty approval rating with the public. However, the budget passed last month appears to be more routine than progressive, maintaining a structural deficit and deferring the burden of that deficit into next year and beyond. MIR is pleased to present this interview with Assemblyman Keith Richman, in which he assesses the recently passed state budget and the need to align the politics of the Legislature with the politics of the majority of citizens in the state.

Assm. Keith Richman

Assemblyman Richman, if the state budget is a road map of the State's priorities, what does this year's budget tell our readers about the Governor & Legislature's priorities for 2004-5?

The budget that was just passed was not one that I supported. It was a budget that continued to put off until next year a number of the problems that California faces. In fact, in the debate on the Assembly floor, even those people who supported the budget acknowledged that there continued to be much work that needed to be done and the issues would need to be addressed next year. This year's budget, like last year's budget, depends upon borrowing billions of dollars and continues with a structural deficit. The estimates are that next year's deficit will be approximately $7 billion, and about $10 billion the year after that. In order to "balance" this budget, we continued to take money out of transportation funds by suspending Proposition 42 again. The budget also has plans to issue a pension obligation bond of about $1 billion to pay the state's pension obligations this year. So there is still a lot of work that needs to be done.

Keith, you mention transportation funding. The Governor has asserted that the gambling compacts on the November ballot will help repay those borrowed transportation dollars. Again, what does funding transportation through gaming say about the priorities of the state?

I am certainly pleased that the governor is committing the one-time money from the Indian gaming compacts to transportation funding. It's critical that we have transportation and other infrastructure funding on a regular basis. Ever since the voters approved Proposition 42 with almost 70% approval two years ago, Proposition 42 has been suspended every year. We must close the loophole on Proposition 42 so that we can invest in transportation projects on a regular basis. If we're going to continue to have a thriving economy, I think that it's critical that the state invest in transportation and other infrastructure needs.

What does it say that consensus was reached in the capitol by elected representatives and our governor around this budget? What does it say about the electorate, the coverage of politics and our priorities? What's the big picture statement being communicated?

The macro statement is that there continues to be a short-term view of the state's predicament. We need to be looking at a long-term vision and generating the political will to implement that vision. It's clear that with this budget the Legislature did not have the political will necessary to make the difficult choices not only for fiscal responsibility, but also for the long-term planning and future of the state of California.

You and Assembly Budget Chair Darrell Steinberg have spoken eloquently in the past about the dysfunctional state-local fiscal arrangements that have plagued this state for 25 years. The Governor and your colleagues have now agreed to not only provide consitutional protections for local government revenues but to lock the existing revenue formula into the constitution. How is it that the Governor and Legislature can't fix our fiscal arrangements in bad times, but they can't fix it in good times either? Is it unfixable?

I don't think it's unfixable. I do think that it's important that we protect local government funding. It is not right for the state to balance its budget on the back of local governments. There is something wrong with the picture when local governments throughout the state of California are laying people off while the state government is giving pay raises, increasing benefits, and hiring new employees.


It's very important that we look at a re-alignment of government services between state and local governments. It is something that will require a lot of work in order to determine at what level of government services are best provided (either at the state or local level), how the tax revenues will flow following those various programs and services, and then how accountability is built into the system to ensure that we're getting the services that we hoped to get.

Can that be done without local government having more significant access to property taxes in lieu of being dependent on the Legislature to allocate those property tax dollars?

Well, there's been a discussion for years now regarding the fiscalization of land use policies and the debate between property tax and sales tax for local government. I really look at it in a much broader fashion and think that it's important that we first determine at which level of government the services will best be provided. Then, we can determine the tax revenue source that will provide a stable stream of revenue for those services and devise the proper accountability measures to assure that the services are being provided well. So that is a discussion that needs to occur. And, it needs to have both state and local government representatives and broad political backing to develop a consensus that it is going to work.

Does the state need an open primary to re-orient and move both parties to the center?

I have been an outspoken critic of the partisan gridlock in the California State Legislature. The Legislature has not only not resolved the state's fiscal situation and budgetary problems, but there is a long list of other unfinished business, like health care, energy issues, affordable housing, transportation infrastructure, water and many other issues that have been unaddressed by the Legislature. I believe that partisan gridlock in Sacramento, to a large degree, is due to the gerrymandering and short term limits. It's clear to me that the political debate in Sacramento has been driven by the extremes of both political parties. It's important that we get representatives in Sacramento who are going to work together to put in common sense solutions to the problems that we face. An open primary, an independent redistricting process, and modified terms limit are all very important fundamental reforms that are necessary.

Keith, last question. We have a companion interview with Mike Gordon, a favored local government official running for Assembly from the South Bay, in this issue. He suggests that there's a trifecta of endorsements-the nurses, the teachers, and the environmentalists- which every democratic primary candidate must have to win. What's the trifecta to win a Republican Party primary in California? Whose endorsement do you have to get?

Let me first expand on that. Because of the overwhelming number of safe legislative seats in the state of California, the key race in any district is the primary race. In a safe Democratic seat, whoever wins the Democratic primary is likely to win. And, in a safe Republican seat, whoever wins the Republican primary is likely to win. That ends up driving the political debate in Sacramento to the extremes of both political parties, and those political agendas are established by the special interest groups on both sides. On the Democratic side, it's primarily the public employee unions and the trial attorneys. On the Republican side of the aisle, it's the anti-tax groups and the social conservatives. So, for any individual candidate, it makes it very difficult to buck the political agendas that are being set by the special interest groups that are establishing the political agendas for both sides. That's why it's critical that we have an open primary and an independent redistricting process that establishes more competitive seats than the handful we have now. Lastly, it's important that we modify and lengthen term limits to retain more institutional knowledge in our Legislature and promote more long term planning and budgeting.


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