In the form of Proposition 2, Gov. Jerry Brown and legislators are offering voters an alternative to the budget crisis that undoubtedly will return one day.
Although no Capitol product is flawless, most of the policies embodied in Proposition 2 clearly are worthy of support. One provision that would prohibit the state’s school districts from putting money into their own reserves during certain flush years is troubling, but not so much that it should doom the entire measure. It’s a small evil compared with the larger good of a statewide rainy-day fund.
The state budget depends heavily on tax revenue generated by personal income and capital gains. Income tax revenue fluctuates depending on the economy, falling during recessions and rising in good times.
Promoted by Brown, Proposition 2 on the Nov. 4 ballot would amend the state constitution to require that over time, about 10 percent of the general fund would be shifted into a budget stabilization account.
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From that account, the state would spend $800 million to $2 billion annually to build a reserve and a like amount to pay down debt.
In tough times, the governor and Legislature could avoid making the payments by declaring emergencies.
During happier days, money could be shifted into reserves earmarked for public schools, so education wouldn’t be hit quite as hard during recessions.
Proposition 2 is the product of legislation by former Assembly Speaker John A. Pérez, D-Los Angeles. Supported by Republicans and Democrats, Pérez’s bill passed 36-0 in the Senate, and 78-0 in the Assembly.
California’s tax structure relies heavily on high earners. Their income can fluctuate dramatically from year to year, which means the state will be flush some years and broke other years. Proposition 2 would help sand down those spikes. Voters should embrace the change.