PRESTOPUNDIT -- "It's a team sport, baby!"

The Democrat who should be running for governor -- former state Controller Kathleen Connell. She put Gray Davis and the legislature on notice more than two years ago that the state's finances were in meltdown. This is her important WSJ op-ed piece with Matt Fong, from last week:

Given the magnitude of this crisis, fundamental reform of state finances cannot wait until the recall's conclusion. It must be the focus of the debate leading up to the recall election, and the measuring stick for all candidates on the ballot.

It is time for Californians to awaken to the immediacy of the economic threat that undermines the future of our state, risks the success of our businesses, and reduces the quality of life for our citizens. It is time for taxpayers, as shareholders in the state of California, to demand the fiduciary responsibility that is required of any corporate director. Just as the shareholder has forced corporate America to a new standard of transparency and accountability, so should the California taxpayer require those standards replace backroom negotiations and accounting gimmicks in the state budget process.

Over the coming weeks, all gubernatorial candidates should be measured by their response to specific proposals to restructure state government's fiscal operations. Many previous legislative proposals, some sponsored by us as state officials, have urged these common-sense reforms. NGOs like the Reason Foundation and Performance Institute, think tanks specializing in government reform, have also highlighted significant opportunities for restructuring.

To end the financial crisis, the recall debate should focus on these simple but powerful imperatives:

• Implement a watertight expenditure and revenue limit to bring state spending into balance with available revenues and avoid the "feast and famine" cycle of the current system.

• Create the most jobs-friendly climate in the nation through fundamental regulatory and tax reform that would provide the state with a growing revenue pie. Workers' compensation insurance reform should be high on this list.

• Shift the state to a two-year budget cycle, currently used by more than 20 states, to increase legislative oversight and eliminate the potential of spending deferrals and accounting gimmicks.

• Use performance-based budgeting that requires every state agency to justify every dollar spent based on performance goals and savings targets. Currently the legislature only reviews new budget spending proposals, simply assuming previous year's expenditures are acceptable.

• Create a competitive government structure with the requirement of open bidding for state services, including public and private sectors.

• Appoint a budget oversight commission to review progress toward reform goals and enact midyear budget changes as needed. This commission would function similar to the federal base realignment and closure commission that made politically unpopular decisions regarding closure of military bases. Such a commission could become the independent watchdog, akin to a bankruptcy judge in a corporate restructuring.

All these may seem to be common sense to most of us. Yet given the dynamics of state budget politics, no such principles exist in California and the gap between spending and revenues has escalated to the current $38 billion deficit.

The recall election will determine the leadership of California. If the state misses this opportunity to ask the right questions of its leaders and candidates and allows a continuation of the same pattern of deferral and denial, the problem will worsen and next year's budget crisis will make this one look like a picnic. Then, it will matter little who sits in the governor's office.

(thanks to Internet Ronin)

Posted by Greg Ransom