California Must Rediscover Fiscal Responsibility in 2013

Yahoo Contributor Network

National politics dominated much of 2012, but state-level issues still merit examination. Yahoo News asked voters to pinpoint issues within their own states that they'd like to see tackled in 2013. Here's one perspective.

COMMENTARY | If Congress cannot agree on tax increases and spending cuts, going over the so-called fiscal cliff will cost California about $4.5 billion and result in the loss of 200,000 jobs, the Daily Democrat notes. Due to California's well-documented budget shortfalls, state funds cannot make up for any cuts in federal monies. In 2013, top priorities for Sacramento lawmakers must include getting California's financial house in order.

Secure funding for higher education by changing the business model

Should mandatory federal cuts take place in 2013, the University of California will lose $335 million currently allocated in federal research funds. Although state voters approved temporary tax increases, the money that would go to the UC system may have to backfill the hole left by federal cuts.

To prevent this occurrence from happening in the future, the Board of Regents must take seriously Gov. Jerry Brown's urging to rethink its business model. As reported by the Associated Press, the governor called on UC to check for ways to save on costs -- in part via online learning.

Rethink the California bullet train project

Gov. Brown's unwillingness to put the bullet train project on hold poses the question how the financially challenged state will pay for it. Bloomberg notes that lawmakers are courting "sovereign wealth funds, pensions and endowments" to raise in excess of $50 billion that the $68.4 billion project needs. Voters previously approved $10 billion in bonds; the federal government committed to $3.3 billion.

Ongoing legal challenges from residents and commercial interests may delay one or more construction phases of the project. As highlighted by the Fresno Bee, the Madera to Bakersfield section completion date has already been pushed back to the end of 2017, which jeopardizes the $3 billion the federal government committed to the project. This could also jeopardize investor interest.

Tackle long overdue public pension reform

The state currently deals with three major pension systems. A 2010 Stanford Institute for Economic Policy Research brief shows that California's pension system showed a $425 billion funding deficit as far back as 2008. Gov. Brown attempted to introduce pension plan reform late in 2011 but -- as noted by News 10 -- public employee unions fought any changes. In 2013, the Golden State cannot afford to protect the pension status quo.

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