What should be California's Recovery Plan? A beginning point and a necessary condition to arrest the slide toward decay we are in is government that works. The current uncertainty and deterioration of services are greater impediments to business investment and job creation than taxes or over regulation.
What changes in processes and accountability need to be made in state government?
The ideas you outline in your Financial Innovations Lab Report on Ensuring State and Municipal Solvency provide a good beginning. Returning to a two year budget would lessen the revenue volatility driven feast or famine approach that currently undermines effective planning, implementation and continuity. Recognition that some degree of shared sacrifice will be needed to close the current imbalances also needs to be acknowledged as enlightened self-interest by the players involved.
California also needs some form of financial oversight such as the board of control approach discussed in your report. In Texas, I understand the state controller has the authority to send the state budget back to the legislature for correction if he or she believes it is unsound. A panel composed of the State controller, treasurer and auditor could be similarly empowered in California. However, for such action to be effective it will be necessary to incentivize legislators to mitigate narrow constituency interests to the more encompassing needs of the full electorate of California. One way to do this would be to give the panel authority to call a state-wide vote to recall the full legislature if they determined the legislature has not enacted a fiscally sound budget for two consecutive years.