California Needs Bold Fixes, Is Sacramento Up to It?

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Sacramento in an election year tends to be a place of caution, hoping to not upset swing voters and activists alike. But 2016 may be different. Earlier this year, Republicans worked with Democrats to reform the Managed Care Organization (MCO) tax - to the dismay of many conservative activists. And Governor Brown angered business interests when he lamented to labor pressure to massively increase the state's minimum wage. Both are risky actions in an election year.

Next week, the Hoover Institution will release the March-April 2016 issue of Eureka featuring commentary on vital topics facing California's future. The issue highlights 1) how the California Coastal Commission has engaged in extreme mission creep, 2) why Medi-Cal has put the state between a rock and a hard place, 3) how technology can and will make Sacramento more transparent, and 4) whether California will get serious about tackling its major infrastructure challenges.

California Coastal Commission Creep: The California Coastal Commission, established in 1972, is a quasi-judicial-regulatory agency tasked with protecting California's coastline with jurisdiction spanning, generally, 1,000 yards from the mean high tide. Proposition 20, which created the Commission, defines development, of which the Commission is empowered to regulate, as anything that changes the density or intensity of the use of the land. In the years since 1972, the Commission has aggressively expanded the confines of its mission, regulating not just development, but also the use of land for cattle grazing, how surfers determine who gets which wave, and even whether landowners are required to give up a portion of their private property for public use. The Commission plays fast and loose with property rights, to the detriment of Californians.

How to Pay for Medi-Cal: Medi-Cal - California's health coverage system for low-income individuals and the elderly - enrollment is 1/3rd of the state's population, costing a record $86 billion next year.  This is roughly 60% of the Health and Human Services Department's budget. Driving this increase is California's stubborn poverty and the Affordable Care Act, which expands Medicaid eligibility. Because the federal government will decrease its coverage for the newly eligible over the next few years, California's share of the new additions will increase from $500 million this coming fiscal year to $1.5 billion by 2019-2020. Reforming the MCO tax was a crucial first-step in funding Medi-Cal largely because California's old MCO tax was considered non-compliant with federal regulations, making California ineligible to receive federal Medicaid funding. Not only is the new MCO tax compliant, it is also, potentially, more efficient since it broadened the tax base and reduced, overall, the tax incidence on the base. However, the risk - and concern - is that the new MCO tax could increase the premiums for non-Medi-Cal healthcare plans.

Shining the Light on Sacramento: On average, since the 1999-2000 legislative session, California's State Legislature has introduced almost 5,500 pieces of legislation per session. Not that long ago, you physically had to be sitting in the legislative chamber to watch your government debate these thousands of bills. But because of television and now the internet, some (note: not all) of these legislative proceedings can be viewed from anywhere. Technology has made government more accessible, but it still seems out-of-touch. That is where Digital Democracy, a platform that turns legislative hearings and floor sessions into a multi-dimensional, searchable tool - takes technology-driven transparency to the next level. Now anyone with internet access has the ability to know exactly what their legislators and those lobbying them are saying and doing. Building on Digital Democracy is the Legislature Transparency Act, which would require all legislation to be in print for a minimum of 72 hours before being voted on and requires all legislative committee hearings and floor sessions to be recorded and publicly available within 24 hours. Coupled with platforms like Digital Democracy, this will empower any citizen to keep a check on their government.

Stopping the Crumbling beneath Our Feet: By some estimates, California's schools need over $100 billion for capital investments over the next 10 years, the state's roads need an injection of an additional $6 billion per year for the next decade, and the Golden State's water system requires about $45 billion over the next twenty years to ensure safe water conditions. The state's infrastructure once was an example of government at its best; now it's the epitome of government inaction. At the heart of the issue is a combination of Jerry Brown's 1970-era "small is beautiful" mentality, which deprioritized for a generation California's infrastructure, Proposition 13 and its legacy measures, which made localities more reliant on the state for maintaining the infrastructure, and term limits, which de-incentivized state and local elected officials from thinking long-term. To move forward California's best options are to better align usage of infrastructure with payment for it (i.e. shifting to a mileage tax in lieu of a gas tax) and working to make infrastructure projects less expensive via public-private partnerships, enhanced competitive bidding, and fewer (or more restrained) project-labor agreements.

Legislators have already shown a potential willingness to cast aside caution this election year, but we will only know if Sacramento has decided to embrace boldness if legislators whole-heartedly decide to address these and other vital issues facing California's future.


Carson Bruno is the assistant dean for admission and program relations at the Pepperdine School of Public Policy. Follow him on Twitter @CarsonJFBruno.

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