Legislative Session Holds Promise and Peril

Tuesday, January 20, 2015

By Kevin Mullin

There is no shortage of challenging issues that will make news from the State Capitol during the 2015-16 Legislative Session ranging from education reform, to funding transportation infrastructure, to combatting climate change and more.

As the newly sworn-in Speaker pro Tempore of the California State Assembly, and as a member of the Budget Committee, my focus is on helping shape a state budget that balances spending on vital priorities such as strengthening a social safety net that was decimated in the Great Recession, while pro-actively paying down our state’s debts and addressing long-term fiscal liabilities. In the coming months, we will hold dozens of hearings resulting in eventual adoption of a roughly $113 billion general fund state budget. I am optimistic that the Legislature and the Governor are on track for a fifth consecutive on-time balanced budget.

As is often the case at the State Capitol, however, we have both promise and peril. Let’s explore some of the more promising news: Political and electoral reforms have taken hold and are positively affecting the way the Legislature does business. Voters have approved a series of reforms such as the “Top 2 Primary” (where the top two vote-getters in the primary run-off in the general election regardless of party, resulting in more moderate lawmakers), term limit modifications (12 years total service instead of 14, but allowing lawmakers to serve those years in one house or any combination therein), putting power in the hands of citizens to oversee the decennial redistricting process, and a majority-vote budget. These reforms have combined to create a more collegial and productive body, have allowed for speedier passage of balanced budgets, and have helped promote bi-partisan cooperation on key issues such as the Water Bond and Rainy Day Fund, both of which passed with overwhelming bi-partisan support.

Now for the perilous indicators (with a few hopeful signs mixed in): California’s antiquated tax code, with its over-reliance on the wealth of high-income earners and capital gains from the stock market, creates tremendous volatility resulting in wild swings in tax revenue.  Fortunately, with voter-passed Proposition 2, the Rainy Day Fund, we are creating reserves when revenue spikes to help smooth out budgeting when another recession hits. While certainly helpful, the dangerously unpredictable underlying revenue volatility still exists. I look forward to working with former Assembly Speaker, now-State Senator Bob Hertzberg as he embarks on an effort to reform our tax structure to ensure a less volatile, more stable revenue stream. I expect strong opposition from those who are wedded to the status quo, but as we’ve repeatedly seen large deficits occur when the economy takes a dip, the status quo is unacceptable. Governor Brown has also rightly called out the $72 billion unfunded liability in state employee retiree health care, which will be the subject of labor negotiations and legislative scrutiny.

California also has a shockingly high poverty rate. One in four children in California are growing up in poverty. We should resurrect a proposal from last session to strengthen investments in 0-3 early childhood education, and transitional kindergarten for all 4-year olds. This proposal is fiscally prudent because we know from experience in other states that these programs will increase high school graduation rates and reduce our prison population down the road. Other recent investments in K-12 education are moving California closer to the national median in per-pupil expenditures, but more must be done if we are to prepare a workforce for the 21st Century economy.

Finally, California has no discernable affordable housing strategy. I believe our newly re-elected Governor has a window to work with Speaker Toni Atkins and our Assembly leadership in particular, to develop a more robust response to the loss of redevelopment funds for local governments, which were such a critical piece of the housing mix. As we’ve seen rents and housing prices again skyrocket in San Mateo County, it is abundantly clear that the state has been delinquent in developing a real housing policy. As a member of the Assembly Housing Committee, I pledge to continue to work on this issue during and beyond this budget cycle, to address this glaring need and other challenges that are squeezing middle class families.

Since its Gold Rush days, California has been on a roller coaster ride from economic booms to busts. It is our governing responsibility to build upon recent success to better stabilize our budget cycle and continue bi-partisan cooperation, with the goal of delivering on California’s promise for our 38 million residents.

As always, I invite feedback from my San Mateo County constituents about priorities at the Capitol. Send me a message at www.asmdc.org/Mullin or call my office at (650) 349-2200 with suggestions and input.