The budgetary problems in California are driven by its flawed tax system.

The San Diego Union-Tribune’s editorial board operates independently from the U-T newsroom but holds itself to similar ethical standards. The board bases its editorials and endorsements on reporting, interviews, and rigorous debate, while striving for accuracy, fairness, and civility in its section.

The 20th anniversary of Arnold Schwarzenegger’s taking office as governor in Sacramento this fall has prompted a reevaluation of his legacy. Veterans of his administration and journalists who covered it have praised his determination to take on major, complex issues. Schwarzenegger led California in responding to the climate emergency and implemented election reforms, but his push for smart reforms to address the state’s volatile revenue issues went nowhere.

California faces a $68 billion budget deficit, highlighting the impact of the state’s dependence on volatile income and capital gains taxes. Schwarzenegger’s response to the Great Recession in 2007 included a commission to propose reforms that would reduce revenue volatility. However, the proposal did not gain traction due to political resistance from both Democrats and Republicans.

Subsequent governors such as Jerry Brown and Gavin Newsom have implemented different approaches to fiscal discipline, but the fundamental issue of volatile revenue remains. As the state grapples with potential spending cuts, there is a growing recognition that structural tax policy changes may be necessary to address the ongoing budget crisis.

It is unlikely that state leaders will have the time to address the underlying structural problems driving the crisis. However, there is a growing bipartisan awareness that changing tax policies may be a smarter approach than hoping for a miraculous resolution to the current system’s problems. A call to action from figures like Schwarzenegger and Brown, emphasizing the need for tax policy reform, could serve as a valuable public service, highlighting the need to address the longstanding issues plaguing California’s budget system.


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