Fiscal Responsibility

By Bill Simon

a. Promote Economic Growth

i. Improve the business climate by addressing the factors that are causing businesses to relocate outside of California: High Workers' Compensation costs, harassing lawsuits, and state laws that impose undue regulations and red-tape on businesses. Reverse "job-killer" bills passed this year by the Democratic controlled legislature. Reform CEQA (the California Environmental Quality Act) and the Endangered Species Act. ii. Cut taxes that stimulate the economy, including reducing the tax in capital gains to a maximum of 5 percent. iii. Reform the way that the state distributes state sales tax and local property tax revenues to local governments to eliminate the existing fiscal incentives in land use decisions that discourage the building of housing.

b. Get the State's Fiscal House in Order

i. Balance the state budget by cutting spending. Thoroughly review all state programs to determine those that are not cost-beneficial. ii. View the state's budget as one would view a business with a focus on the level of debt, the efficient use of the state's resources, and the level of citizen satisfaction. Restore California's once-strong credit rating. iii. When the economy recovers, create a second budget reserve, keeping one for earthquakes, fires and floods, and the other as a cushion against economic downturns and revenue volatility.

c. Restore Local Control

i. Reform measures need to be enacted to ensure that local revenue sources are protected from the state seizing them and using them for the state budget. ii. Counties are agents for the state and should be treated as a partner by the state. Counties and the state should establish formal agreements outlining the responsibilities, duties and finances for those social programs that are shared. iii. The state should reimburse local governments whenever it requires them to implement or expand a program. While there is an existing process to do this, it is stacked in favor of the state and needs to be reformed to make it more workable, meaningful, and fair for local governments.