Prop. 31: State Budget Reform, Or More Problems in the Making?

California's annual budget process creates a lot of stress for local governments, education, business and labor interests.

In 2009, the state went without a budget for two months, because of partisan gridlock in the Legislature.

More than $2.6 billion worth of IOUs were issued to California's creditors.

Would a two-year cycle, which would take effect if voters pass Proposition 31 next month, be preferable?

Backers of the measure are trying to make that case.

"What we're doing here with this initiative,” says Yes on Prop. 31 advocate Laurie Madigan, “is provide a clearer process, a more transparent process and a more stable process to help avoid those budget deficits."

While avoiding deficits would curb anxieties in many communities, Prop. 31 critics warn that it's filled with lots of moving parts and potential downsides.

"It gives the governor during fiscal emergencies to unilaterally cut the budgets and as you know, our state has had a number of fiscal emergencies," says Jeanne Brown, president of the San Diego League of Women Voters, which opposes the measure. "So, even whether you like this governor or the next governor or the last governor, it's going to be in the (state) Constitution."

Prop. 31's shift to biennial cycles would include a wide range of other provisions -- one, requiring lawmakers to enforce cuts or find offsetting revenue before spending more than $25 million.

Another key provision would allow state-mandated program decisions to be controlled by local government agencies, from schools to law enforcement and social services.

"It's going to vary from San Diego to Santee, from Palo Alto, to Coronado,” says Brown. “and we think that that is a real problem."

Madigan offers this argument in response: "We have 18 cities, and you don't see structural deficits the way that you see them at the state level, so I think we should trust our local governments a lot more."

A California Field Poll of likely voters shows 21 percent favor Prop. 31, versus 40 percent opposed, and 39 percent undecided.

Yes on 31, largely funded by foundations and a billionaire investor, has raised 20 times more money than the No campaign has collected, mainly from labor groups.

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