Friend, Can you Spare A Dime (Or $24 Billion?)

May 27, 2009
Posted by Steve A. Harman

Last week the voters of California rejected five initiatives designed to close next year’s budget gap. According to the State’s Legislative Analyst, next year’s budget deficit is estimated at $24 billion (out of a $92 billion General Fund). There has been a great deal of speculation in the media why the voters decided, by overwhelming margins to vote down the proposal, which would have (allegedly) resulted in a balanced budget. Conservatives suggest that the vote was a signal to the liberals against new taxes; liberals argue that it was a message to the legislature and Governor that they need to take care of the people’s business and not reallocate previous voter approved funds from several programs to the State’s General Fund. At this point, the reasons are irrelevant.

Moreover, Washington has made it clear that there will be no bailout forthcoming.

Clearly the situation has reached a point that all the solutions under consideration will result in significant reductions in public services – from education, to public safety and public health. No programs regardless of its constituency are likely to escape huge reductions. Cities, counties and special district throughout the State are now preparing their budgets for next year; those budgets will include layoffs of large numbers of employees, wage and benefit freezes and reductions in direct program areas as well.

On a larger scale, both Democrats and Republicans are considering asking the voters to authorize a state constitutional convention. That should have happened years ago. Even Proposition 13 is on the table for review.

Human Resources Directors and staff will be called upon to provide leadership, fresh ideas and stability in an unstable environment. I hope that no HR Director in California has to bang on the decision maker’s door to get a seat at the table. Similarly, we have to live up to the expectations and be willing to tackle difficult situations with honesty, integrity and ethics. Are we ready?