Budget Proposals

By Frank A. Macaluso, Jr.

Limiting 2003-2004 budget to $90 billion and directly linking state spending to the amount of revenue received.

The time is now for all parties to be more responsible when it comes to our state's finances. I believe that the budget should have a ceiling of $90 Billion for year 2003-2004. This is approximately six percent higher than 1999-2000 when Governor Davis took office but still seventeen percent below his 2002-2003 budget. Many variables are involved in developing a budget cutting plan that will have the least possible impact upon our state's ability to recover from the current global economic slump without sacrificing our future by continuing proper funding for education, transportation and vital services such as health care delivery. However, the rational is simple in that we must not allow the budget to increase yearly when revenues are flat. That increase in the budget has been approximately 28% since 1999-2000 while during that same time there has been no significant change in revenues received. We must adjust the budget yearly according to the amount of revenues received by the state in taxes and fees.

I propose directly linking spending to the amount of money the state receives by limiting the state budget to a level not more than 20% above the level of tax receipts for the previous year. Of course, the one year lag time between budget projections and the final year end adjusted figures for revenues received will be accounted for in this proposal. When the money received from Federal programs is factored in, the budget constraints I propose would maintain the solvency of our state's institutions and have a built in surplus in most tax years which could be used to invest in California's infrastucture or be returned to taxpayers as a rebate.

About Taxes and Health Care:

Raising taxes is not the answer to our current budget woes. In fact, that strategy could backfire by stifling growth resulting in lower tax revenues instead of higher. We need to control taxes placed on individuals and corporations and bring back a business friendly atmosphere in California. Nearly two-thirds of the revenues flowing into the General Fund come from personal income taxes.

But tax reform alone won't solve the most important problems faced by small businesses today, among them the skyrocketing costs of health insurance premiums and workers compensation benefits. As owner of a small business, I have recently faced all these nightmares and truly sympathize with business owners. Reducing regulatory requirements on businesses will lower the costs of doing business. We also need a complete overhaul of the state's workers compensation program. As a doctor, I witness daily the inefficiency and fraud in the workers comp program and this needs to be stopped ASAP.

California's government funded health care programs are on the verge of imploding. Fed by a steady increase in population and demand for services, uninsured patients are forced upon emergency rooms around the state in numbers beyond their capacity. But, with cooperative action we can devise a solution to this problem focusing on providing primary care to these patients at a fraction of the cost of emergency room treatment. This investment in high quality cost-effective primary and preventive care for these patients would pay long-term dividends for the state. In the short term we must must try not to threaten vital services such as medical care understanding that the $90B budget cap will require an array of expenditure reductions.