THE BLOG
06/07/2009 05:12 am ET Updated May 25, 2011

Golden State Blues

Just over three months into the presidency of Barack Obama, the mood of the country has shifted dramatically from the deep pessimism that pervaded the nation at the turn of the year. More Americans now believe that the country is heading in the right direction than in the wrong direction -- not because the economic storm clouds have passed, but because they see strong leadership taking on the nation's challenges head on.

Yet, in California, the voters' mood about the state's future remains decidedly sour. While Californians are increasingly positive about the nation's future, less than one in four of the state's residents believe that the state is headed in the right direction. It's ironic given the innovation, energy, and optimism that have always defined California. Yet, the vast gulf between Californians' perceptions of the nation as a whole and the state should hardly be surprising. For when they look to Washington, they see a president and a federal government forthrightly confronting the nation's ills. But, when they look to Sacramento, they see a governor and state government that have consistently failed to honestly address the state's chronic fiscal disarray.

In 2004, Governor Schwarzenegger promised voters that the state would rip up its credit cards and balance its books if they approved his deficit borrowing plan and rainy day fund proposal. The voters did just that and what they got in return were budget deficits in five of the next six fiscal years and a whopping $25 billion in debt. To add insult to injury, when the economy cratered and the state's failure to balance its budget in the boom times left the state with no running room, the governor pushed through a budget that gave billions in tax breaks to big corporations and stuck working families with a bundle of regressive taxes and cuts to education and critical services.

Against this backdrop of distrust and disappointment, Schwarzenegger and much of the state's political leadership are asking the voters to approve Proposition 1A on the May 19th special election ballot which they promise -- once again -- will ensure that the state never faces deficits again.

Yet, the voters are balking -- and, with good reason. Despite the governor's claims, Proposition 1A will not solve the state's structural budget problem and, in fact, will make it worse. The non-partisan Legislative Analyst is projecting that, even with the passage of Proposition 1A, the state will face an annual deficit of over $10 billion in 2010, increasing to a staggering $26 billion by 2013.

Instead of making it easier to balance the budget, the measure would put the state in a tighter fiscal strait jacket by locking complex and confusing autopilot budget language into the state constitution. There's no question that the state's outmoded budget rules have made it nearly impossible for even the best of legislative leaders to craft responsible budgets -- piling on more unworkable strictures makes no sense at all.

But the damage does not stop there. Proposition 1A will hinder critical investments in colleges and healthcare and will stop the state from restoring vital programs when the economy bounces back. And, by requiring that money be put aside in a rainy day fund even though the state is already taking in less money than it is spending, it will deepen California's budget woes.

Proposition 1A is not the change we need. If California is to resolve its chronic budget problems, there are two straightforward, real changes that are needed: replacing the requirement that budgets be approved by a two-thirds majority with a simple majority vote to end to tyranny of an extremist minority and then actually adopting a balanced budget that meets California's 21st century needs.

Our national sense of hope and possibility has been lifted by the new-found willingness in Washington to tackle big problems with real solutions and reforms. Only when Californians see Sacramento confronting the budget mess in the same way will the optimism so vital to the Golden State's resurgence be restored.

Phil Angelides served as California State Treasurer from 1999 to 2007 and was the Democratic nominee for Governor in 2006.