California's Budget Plan Passed. Now What?

This afternoon the state legislature approved a budget to close the $24 billion deficit. The budget included cuts to health care, education, CalWORKS, prisons, and state worker pay.

New America Foundation experts released the following statements:

Steven Hill, Director, Political Reform Program:
California finally has passed a budget, but the crisis is not over. That's because the problems of California are systemic and institutional, and will require reform of our basic political and budgetary rules. Unless those rules and institutions are changed, everybody knows that the next budget crisis is just around the corner. California has a choice -- it can continue to use the institutions and rules from the last century, or adapt them for the 21st century. California 1.0 is broken, while California 2.0 still awaits design and definition.


Olivia Calderon, California Legislative Director, Asset Building Program:
At a time of record unemployment, home foreclosures, and uninsured, the state of California has again pulled the rug out from under the people who
need help. The budget just passed and soon to be signed into law, cripples low-and middle income families' ability to build their own personal reserve fund. California families are in crisis. A crisis that underscores the central role savings, money management know-how, and asset ownership play in the economic security of Americans and the broader economy. Today, more than ever before, the legislature and Governor must bring into law innovative policy proposals that would create financial security and economic opportunity for California families by incentivizing savings so that Californians can get on the path to building sustainable assets.

Joe Mathews, Irvine Senior Fellow:
The question raised by this budget is whether California's leaders are capable of passing a balanced budget. The overwhelming evidence, after three attempts in less than 10 months, suggests the answer to that question is no.

So the state has a constitutional problem. Various elements of the constitution (along with other laws and federal rules on social programs) make it impossible for the legislature and Governor to meet their constitutional responsibility of a balanced budget. Unless the state secedes from the Union or opens its own bank (I'm open to both ideas), California needs constitutional reform -- fast -- or our political leaders will never again be able to balance our budget.

Please contact Liz Wu with media requests at (510) 295-9859 or wu@newamerica.net.


About the New America Foundation
The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.

Learn More About: Joe Mathews, Olivia Calderon, Steven Hill
Related Programs: New America in California, Political Reform Program, California Asset Building
Topics: Ownership & Assets, Political Reform