Thursday, February 21, 2008

The Role of an Executive

California is in another budget mess. By any estimate the current and projected budgets are out of whack by fairly large numbers - $14-16 billion. That would be larger than the budgets of many states and some countries. The Governor proposed a budget in January which was premised on across the board reductions in spending. That is a common way for many political figures to solve problems like this. No need to make the very hard choices between this and that. Indeed, it makes some sense.

Yesterday the Legislative Analyst released her analysis of the proposal and she takes a substantially different approach. She proposes some changes in tax policy which would raise revenue. The Governor has stuck firm to his no new taxes proposal. Her revenue suggestions are mostly technical (changing the treatment of tax loss carryforwards and the R&D tax credit for example) but they raise a fairly significant level of cash. But she also proposes a much less broad brush set of reductions. She makes a set of choices - which not everyone could agree with but which none-the-less would stabilize the budget for the next several years.

The ease of doing across the board reductions is similar to what a clerk could do. But isn't an executive supposed to make choices?

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