California forced to confront roots of current fiscal mess

SACRAMENTO, Calif. — So how did it come to this — that powerhouse California, a nation state of 33 million with a budget larger than most small countries, has again been brought to its knees in a life-or-death struggle for financial survival?

And just how familiar is this scenario?

Consider then-gubernatorial candidate Arnold Schwarzenegger lambasting California leadership over out-of-control finances — in 2003: "Our elected officials in Sacramento are facing a budget crisis unseen in this state since the Great Depression, and it was entirely avoidable," he railed. "Teachers are getting pink slips, cops are getting laid off and the taxpayers are facing an increase in taxes and California's future is in danger."

Six years later, under his leadership, it's deja vu: with the June 30 fiscal year deadline looming, the Legislature is frantically at work to close a $24.3 billion budget gap in the state's main bank account.

And as California's finances again head off the cliff, the latest California scenario "isn't Thelma and Louise," observes Hoover Institution research fellow Bill Whalen. "It's Groundhog Day."

Now Californians, like the Bill Murray character who lives the same day over and over, may be finally forced to confront the roots of the insanity.

There are several factors that contribute to the state's recurring inability to deliver an on-time, balanced budget. Among them:

Partisanship: California's gerrymandered legislative districts tend to protect incumbents and encourage more political extremes — Republicans on the right and Democrats on the left with less incentive to reach out to the political middle, much less compromise at the capitol.

Term limits: Prop. 140, passed in 1990, limits legislators terms to six years in the Assembly and eight in the Senate.

Ballot box budgeting: Initiative-loving Californians mandated set-aside funding for all kinds of single interest issues, from education to stem cell research.

Prop. 13: The 1978 landmark law slashed commercial and residential property tax rates, shifting state reliance to other more volatile sources.

The two-thirds majority rule: The Golden State is one of just three states that require a two-thirds majority vote from each legislative house to pass budgets.