Thursday, May 07, 2009

Should California Be Placed in Political Receivership?

Stephen Griffin

A thought inspired by a story in today's L.A. Times in which the state legislature's chief budget analyst said California would be bankrupt with a $23 billion deficit by summer. California has had periodic budget crises for decades in part caused by the double whammy of a large fraction of the budget being locked up as a consequence of ballot propositions and a two thirds requirement for passing a budget. Both of these problems stem from California's dysfunctional constitutional system.

So how about a federal solution? Here's the part of the article I really liked: "The budget package that Gov. Arnold Schwarzenegger signed into law in February, averting an earlier cash crisis, was intended to keep the state solvent through June of next year. But the deterioration of the economy quickly knocked that spending plan out of balance. The analyst cautioned lawmakers against asking the federal government to help the state secure loans that might provide relief. In such a scenario, the federal government would guarantee lenders that it would repay them if California defaulted. The analyst said such provisions would be likely to have strings attached and could give the federal government too much authority over state affairs."

Too much authority? In such a situation, with the federal government guaranteeing tens of billions of dollars in California debt, why shouldn't the rest of us have a substantial say over how Californians run their government? Not to do so would simply encourage further mismanagement. Here's a simple summary of what we should require of California -- conform to the federal model. Anything in the state constitution relevant to the budget crisis that differs from the US Constitution would have to go. That means goodbye to the initiative (or at least the propositions passed using that flavor of direct democracy) and no two thirds requirement.

I think it would be difficult for Californians to argue that there is something wrong with imposing the federal model. It's done fairly well for the US over the years and, in fact, most state constitutions are based on it. So any interference with the values of federalism would be minimal. We can all appreciate the value of states as laboratories of democracy. But when the mad scientists decide to blow up the laboratory, we are not required to pay to rebuild it without setting conditions to make sure it doesn't happen again.