07/23/2012 03:08 pm ET Updated Sep 22, 2012

What's Next for the California Reform Industry?

In the current recession, the ranks of the unemployed in California have swelled by nearly 1.2 million.

Still, one industry seems to be thriving in America's nation-state: the California "reform industry."

The key organizations in the Golden State's world of reform are California Forward and Think Long, each with high-profile board members (including Hoover's George Shultz and Condoleezza Rice, former California Gov. Gray Davis and ex-Assembly Speaker Robert Hertzberg, as well as leaders from business and labor organizations), a cadre of political and policy consultants, and enthusiastic funders.

Over the years, as I culled through reams of reform proposals for two previous California governors, I have found an intriguing paradigm: the appetite for reform grows when the California economy (and state and local government finances) is under stress.

There is a strong bipartisan consensus that the Golden State needs a sustained push of reforms aimed simultaneously at its executive branch (I'm thinking of all those miscellaneous statewide officers who crowd the dais at the Governor's annual State of the State address), the Legislature and the initiative process.

Some reforms should be big -- big ideas with big impact on California's fiscal condition. But, speaking as a political strategist, some reforms should be served in moderate portions -- digestible bites that voters can understand and absorb.

So what looks appetizing on the California reform menu, and what should be sent back to the kitchen?

California Forward now has a constitutional amendment on the November ballot, which it says will "improve" the budget process for state and local governments. One "big idea" in the measure appears to be its "pay as you go" language requiring lawmakers to identify a funding source for new programs and tax cuts costing $25 million or more before they are enacted. California's nonpartisan Legislative Analyst Office, in its official review of the proposal, said the provision "could result in state program costs being lower," though the net fiscal effect is "unknown."

California Forward also proposes moving to a two-year budget cycle. That might help, but there may be unintended consequences -- specifically, California's volatile revenue picture. Why not keep a closer eye on state finances -- say, a quarterly financial update, as publicly traded companies do.

One idea that received a great deal of attention in the Think Long playbook is its proposal for a "super committee" of respected and independent individuals able to place measures directly on California's statewide ballot, bypassing both the Legislature and the traditional signature-gathering process.

I would tweak this proposal slightly -- for instance, by adapting the "citizen legislature" concept developed by Common Sense California, based on experience in other countries.

The idea would be that, once every two years, a group of several hundred average citizens would consider and place on the ballot one measure -- and one measure only -- on the subject of its choosing. It might be a simple education reform, or a campaign finance overhaul -- whatever the participants decided -- placed on the November ballot as a "citizen's initiative".

There's also value in creating a new process whereby a previous initiative can be outright repealed, once its flaws have become painfully obvious to all.

By a vote of the Legislature, an initiative can be resubmitted to the voters for repeal. But that, of course, taints the effort. Moreover, it feeds directly into voters' skepticism. In 2009, the Legislature placed on the ballot proposals to redirect funds from Rob Reiner's Proposition 10 ("First Five" agencies) and Darrell Steinberg's Proposition 63 (millionaire tax for mental health services). In the ballot pamphlet, opponents targeted both measures as "cynical scheme[s] by Sacramento politicians to seize money from local health and education programs". (Both measures failed -- by 32 and 33 points, respectively.)

An alternative would be to take an existing organization, such as the Little Hoover Commission (appointed by the Governor and legislative leaders) and give it the power to review and place on the ballot one or two measures, each election cycle, which they believe should be repealed.

Now that term limits have been tweaked, independent redistricting implemented, and partisan primaries scrapped, a hard look at the Legislature by the reform community is in order. To this end, California Forward and Think Long should focus on what makes the legislative bodies dysfunctional.

One important reform would be to extend the state's Open Records Act to the Legislature (it exempted itself under Proposition 59).

The leading indicators for California's "reform industry" are generally positive. With the right mix of products and some good marketing, and a little bit of luck, these reformers have a good shot at success.

And what's more Californian than taking a risk and going for a big win?

This is an excerpt from a column that appeared on the Hoover Institution's web blog, Advancing a Free Society.