A bold fix for California's budget impasse

Fed up with another late budget, a business group proposes a state constitutional convention.

As California lawmakers broke the record last week for the most overdue budget in state history, exasperated residents told pollsters they are deeply pessimistic about where the state is headed and how it is run.

Enter a bold proposal: convene a state constitutional convention to change the way the budget gets made.

The idea comes not from a quixotic citizen crusader, but from a staid corner of the business community. "Everything is stuck in place. Political stalemate abounds on the budget and other major issues," says Jim Wunderman, CEO of the Bay Area Council, a business consortium based in San Francisco. "We can't compete the way we are operating."

Constitutional conventions have become rare even in states that periodically place the option on the ballot, including this November in Hawaii, Illinois, and Connecticut. Voters are concerned about opening a Pandora's box of special interests, though experts say there are ways to limit that.

"When the real problem is legislative gridlock or intransigence, and ballot measures have already failed, then there isn't any other avenue than the constitutional convention," says Robert Williams, a law professor and associate director of the Center for State Constitutional Studies at Rutgers University in Camden, N.J.

California leaders have made little headway for years on some of the state's most urgent problems, including prison overcrowding and water allocation. No issue typifies the gridlock more than the budget. For 23 of the past 32 years, lawmakers failed to agree on a budget on time.

This year, lawmakers facing a $15.2 billion deficit have been unable to enact a budget since July 1, the longest such delay in the state.

Unlike most states, California requires a two-thirds majority to pass a budget. Democrats have a solid majority but not two-thirds, giving Republicans little power except effective veto over the budget. Also, the legislature carves out districts "safe" for one or the other party, resulting in the election of few moderates.

Democrats balk at Republicans' proposed spending cuts, while Republicans won't budge on pledges never to raise taxes. Gov. Arnold Schwarzenegger (R) wants a temporary increase in the sales tax, followed by a deeper tax cut, but members of his own party aren't interested.

Even when a budget deal is finally struck, it's unlikely to change the opinion of many Californians who see the process as dysfunctional.

Nine in 10 Californians think changes are needed in the budget process, and 74 percent say "major" changes are needed, according to a recent poll from the Public Policy Institute of California (PPIC). "There's pretty strong consensus across parties that major changes are needed," says Mark Baldassare, PPIC president. "The big question for the public is, who's going to initiate the process and who's going to lead it so it's not just business as usual."

Individual reforms put to voters on the ballot – such as allowing a simple majority to pass the budget – often fail to pass under suspicion that one side or other is trying to game the system. To succeed, a constitutional convention would have to allay similar suspicions of partisanship and special interest, says Mr. Baldassare.

Special interests would try to dominate any constitutional convention, warns Joel Fox, president of the Small Business Action Committee. That's what happened in the only state convention in 1879, he points out. The Workingmen's Party won about one third of seats to the convention, then wove anti-Chinese immigrant provisions into the constitution.

Constitutional conventions need not deal with hot button issues such as abortion and illegal immigration, argues Mr. Williams. Voters can place limits on the convention, and, he adds, special interest influence can be minimized by holding the event outside the capital and banning current officeholders from participating.

Even if Californians wanted a constitutional convention, they may not get it. The legislature, by some scholars' reading of the state constitution, must first put the question of a convention before voters. And legislators don't seem enthusiastic. "We don't need to replace our constitution, we need to return to it," says outgoing state Sen. Tom McClintock (R).

When he first arrived in the Assembly 25 years ago, he says, the budget process was more collegial and transparent. That's been short-circuited in favor of high-stakes, closed-door talks between the "Big Five" – the governor and the party leaders in the Assembly and Senate.

The Democrat who chairs the Assembly's Budget Committee, John Laird, worries a constitutional convention would try to do too much, provoking opposition. Having the legislature put targeted reforms on the ballot and rallying bipartisan support for them may be more successful, he says.

Another option is to appoint a commission to put reforms on the ballot, says Fred Silva, senior fiscal policy adviser for California Forward, a government reform group. California tried a version of this in the 1990s but the commission's proposals went not to voters but lawmakers. Turnover in leadership and an improved fiscal outlook reduced the legislature's appetite for many of the proposals, says Mr. Silva.

Silva says he wouldn't be surprised if an influx of freshmen legislators in the coming years opens up dialogue about another commission. But the move would not be easy. "For those involved in [legislation] on a day-to-day basis, there's nothing more difficult than to change the order of things," Silva says.