Today the California Budget is all but signed by Governor Arnold Schwarzenegger.  After 9 months of negotiating, a coup d’état in the California GOP caucuses, a special election and weeks of state issued IOUs all parties have finally reached a budget plan everyone can swallow.  The taxpayers of California should be applauding the efforts of the California Republican Party, whose leadership has been effectively disseminating pro-growth messaging and whose elected officials held the line on tax increases.  Fortunately, this is only part of the victory.  The Assembly also managed to stop major borrowing from local governments that would have crippled local infrastructures.

The Taxpayers have sent a strong message to Sacramento leaders.  With the failure of Propositions 1A thru 1E on the May Special Election ballot by a 2 to 1 margin, the voters clearly communicated that they want to see government live within it’s means.  This has been evident in the tone of negotiations in Sacramento over the last 3 months.  Taxes were only briefly on the table, but after significant pushback from Republicans — some facing recall attempts for backing the last batch of taxes — the Oil Severance Tax was taken off of the table.

Borrowing From Local Governments

Unfortunately, the Democrats’ alternative to making the cuts needed to reduce the size of the Sacramento Bureaucracy was to borrow money from local governments.  By taking money normally used to maintain local infrastructure, what they proposed would force the various county and city agencies to operate very lean budgets in order to let Sacramento Bureaucrats continue to live beyond their means in the Capitol.

Rather than allowing local governments to use their tax revenues to fund local programs — transportation, public safety, fire, public health, etc — these agencies are forced to send that tax revenue to Sacramento.  While the Democratic Bureaucrats in the Capitol fight to protect their own padded budgets, these local services are forced to make cuts.  Democrats try to justify this by increasing allocations to local safety net services.  What this amounts to is the counties and cities sending their money to Sacramento and then asking for Sacramento to send it back.  The transactional expenses accumulated through this process are wasteful.  If Democrats truly cared about the safety net, they would relinquish control of these funds and allow local governments to make their own decisions about their own money.

Thomas Paine once wrote “He who governs least, governs best.”  This quote embodies the Republican ideology concerning state control of local government money.  Local elected officials are the best people to be make decisions about how local government money is spent.

Fortunately this proposal was removed from the budget in the Assembly, and the voters have Republicans to thank for the maintainence of local government budgets.

Drilling Off The Coast of Santa Barbara

The other main proposal that brought much controversy during the approval process was the proposed drilling off of the coast of Santa Barbara.  The California Coastline is one of the few natural wonders that remain in the state.  The proposal in the budget would have decimated the California coast for a measley $100 million each year.  This amount of money wouldn’t even put a dent in the $26 billion deficit that lawmakers were attempting to close — and California would have to ruin it’s natural beauty to attain it.

Again the California State Assembly made the best decision by striking this proposal from the budget.

California Taxpayers Have Reason To Be Optimistic

This budget includes no tax increases and begins to make the changes needed to reform California’s broken budget system and frail economy.  If this momentum continues — specifically with continued voter support of fiscal conservatism in the 2010 election cycle — the fiscal year 2010-2011 budget is likely to continue down the road of smart budget reform.