CHANGING THE TONE GOOD POLICY WILL PREVAIL OVER POLITICS.

Byline: Keith Richman 

DURING my first three years of legislative service, nighttime sessions often meant the Assembly was caught up in one of the politics-as-usual stalemates that have so miserably failed California. But Tuesday night was different.

This time, we heard from our new governor, who has a fresh public mandate to solve problems. It was exciting to sit in the Assembly Chamber and think about the many opportunities that lie ahead.

In recent years, politically driven, partial solutions to California's most urgent issues frequently carried the day, leaving much unfinished business on the public agenda. Often only special interests benefited from this neglect of duty, giving Californians good reason to question their leaders.

But the voters elected Gov. Arnold Schwarzenegger to break those unseemly bonds and advance the public's interest instead. And if Schwarzenegger's State of the State address was any indication, he's well on his way.

The governor touched on several key areas of reform:

Financial recovery

First up on the agenda is securing voter approval for the bipartisan financial recovery plan the Legislature placed on the March 2 ballot.

With $14 billion in short-term debt coming due in June, voters must approve $15 billion in long-term refinancing, or California will face bankruptcy. It is really that simple. Five years of overspending created this huge debt, and as California's families and businesses know, the best way to pay off large debts is over time.

The second piece of the recovery plan would cut up the state's credit cards, a step familiar to most families in such a dire financial straits. The constitutional amendment would require a balanced budget without borrowing for ongoing expenses. It would also require a prudent budget reserve, built in every year, so money would be available when revenues drop or emergencies arise.

The budget

With these measures to clean up past financial abuses in place, the Legislature and the governor must work to close the $14 billion gap between revenues and planned expenditures in next year's budget. The budget Schwarzenegger released on Friday proposes some very difficult cuts that must be carefully considered. I do not support them all, especially in the health care area, but tough decisions must be made to make up for past financial sins.

The Legislature and the governor must not fail to bring the state back from the brink of bankruptcy.

Making government more efficient

California's credit rating is the worst of any state. If we cannot streamline bureaucracy, set priorities and overhaul our procurement systems, state and local government could grind to a halt.

A key reform the governor proposed in his address would be to help school districts save money by hiring lower-cost private-sector companies to do non-education work. Recent legislation promoted by special interests forces schools to pay up to 40 percent more for bus, maintenance and food services. It's estimated that California school districts could save $100 million on school transportation services alone, making more money available for classroom instruction.

One of the most promising parts of Schwarzenegger's efforts to fix California government is his Performance Review process. Under the plan, up to 150 top civil servants will take a leave from their regular duties to look for improvements, consolidations and efficiencies in all areas of state government, not just their own departments and agencies. Their task is not simply shuffling boxes on the state's organization chart, but achieving fundamental reforms that ensure efficiency and save precious tax dollars.

The staff work will be directed by a Performance Review Commission comprised of businessmen and women, local government officials, constitutional officers and members of the Legislature. The commission will conduct hearings around the state, allowing the public to make recommendations and receive feedback on their ideas.

This innovative approach allows for both internal reviews of state operations by experts and independent public oversight to ensure no sacred cows are protected by empire-building bureaucrats and well-heeled special interests. With an explicit charter from the governor to reduce waste, improve efficiency and eliminate duplication, this once-a-generation restructuring effort promises to preserve state resources for its most urgent needs.

Boosting the economy

It is impossible to discuss fixing the state budget without improving the economic conditions that ultimately generate state revenue. Government itself does not produce money, it only spends a portion of what the private sector creates. California's hostile business climate limits the creation of new jobs and has driven many employers to neighboring states. Improving California's business climate must be a top priority.

California employers say reducing the cost of workers' compensation insurance is the most important step state government can take right now. Schwarzenegger challenged the Legislature to pass the workers' compensation reform package he sponsored in November's special legislative session. To date, not a single vote has been taken on this most pressing issue.

Without doubt, the Legislature can meet the governor's March 1 deadline for substantial reform. The real question is whether legislative leaders will tell the slackers and special interests that benefit from billions in legal fees and fraud that their costly scams are over. The failure to deal with workers' compensation is killing jobs, hurting employees and sinking California's budget in more red ink.

Without substantial relief, the governor will rightfully take his own solution - one that contains many of the proposals I have been advancing for the last three years - to the November 2004 ballot.

Bipartisanship 

More important than any of these individual issues is the tone of bipartisan cooperation Schwarzenegger set for his administration during his State of the State message. When one party has all the power and thinks it has all the answers, the state suffers. Schwarzenegger knows good ideas can be found on both sides of the political spectrum, and everyone deserves the respect to be heard and considered.

California will be a much better place now that good policy decisions will finally prevail over cynical, partisan politics.

Capitalizing on the many opportunities ahead of us will take plenty of hard work and may require more nighttime sessions. Hopefully the months ahead will be filled with the kind of hard work that results in substantial improvements in our state's future and restores the public's faith in its elected leaders.

Although Schwarzenegger cannot make these many improvements himself, as a representative of the public's demand for change, he can make sure the politicians pay attention or pay the price.

CAPTION(S):

2 photos

Photo:

(1 -- color) With his first State of the State address Tuesday, Gov. Arnold Schwarzenegger challenged Democrats to work with him to balance the state budget and improve the business climate.

(2 -- color) During his State of the State address Tuesday, Republican Gov. Arnold Schwarzenegger is flanked by Assembly Speaker Herb Wesson, D-Los Angeles, left, and State Senate President Pro Tem John Burton, D-San Francisco.

Rich Pedroncelli/Associated Press