In summary

California needs to take its medicine and get its fiscal house in order.

By Doug Ose

Doug Ose served in Congress from 1999–2004, representing Sacramento and the northern Sacramento Valley.  He is the chief executive officer of Rebuild California Foundation, @DougOse. 

Re “What California needs to move forward economically – it doesn’t start with austerity”; Commentary, May 16, 2020

$54 billion. That’s the projected state budget shortfall if no changes were to be made to state programs and spending established over the past 10 years.

First, a little history.

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In 2010, the state budget was about $110 billion for a population of 38 million; per capita that equals $2,895.  The January 2020 budget proposal was $210 billion for a population of 40 million; per capita that equals $5,250.  In 10 years the resident population of California increased by 5.2%. State spending increased by 81.3% per capita. Please don’t say this rise was due to inflation.  According to the US Bureau of Labor Statistics, during this same period, the US cost of living rose by 19%.

Private industry does not allow that type of increase to happen.  It’s called letting your “investments” get ahead of your ability to sustain them.  It’s a rookie error of enthusiasm and naivete.  We’ve all done it.

Most of the cost of government is tied to employee payroll.  Trying to manage a shortfall of this magnitude requires that the large cost components be examined.  Our leaders need to ask whether the current compensation structure is sustainable.  It doesn’t matter whether you want to examine the structure of the large cost components or not because you can’t get to a sustainable solution without doing so.

This raises a basic question of comparative analysis:  Within the various job classifications in state employment, how does the compensation structure for any specific job classification in California compare with the same position in Oregon or Nevada or Arizona?

My friend Rahm Emanuel has popularized the saying: “Never let a crisis go to waste.”  California has a unique opportunity to reconfigure what it provides to residents in the form of services.  The disconnection between population growth and cost of government cannot be allowed to continue.  It is simply unsustainable.

Government cannot be all things to all people.  Leaders set priorities.  They have to learn how to say “We can’t afford that right now.” For at least the past 10 years, when times have been fat and happy, no one has adequately thought through how to deal with a financial calamity of historic proportion. No amount of wishful thinking about being bailed out by the federal government changes the fundamental challenge of living within your means.

Step 1: Take your medicine and get your fiscal house in order.  All else flows from there.

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Doug Ose served in Congress from 1999–2004, representing Sacramento and the northern Sacramento Valley.  He is the chief executive officer of Rebuild California Foundation, @DougOse. 

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