California, Fiscal Reform and the Elusive 'Policy Window'

Can the state ever find a way out of its structural budget problems? A new book might suggest a path for places wrestling with policy dilemmas.
by | October 15, 2013

When the fiscally unsustainable meets the politically impossible, be ready. Most times change happens incrementally as the bureaucracy grinds along and the politics runs a well-worn path, with the players carrying out familiar roles in a kind of kabuki dance. But the path can become a rut, a ditch that wears deeper and deeper until it looks like the Grand Canyon. Everyone can see that the course they are on is unsustainable, but changing course seems less and less possible.

An example of this is the fiscal situation in California. At a recent Governing event in Sacramento, I moderated a panel discussion on the state's fiscal situation that included two veterans of California policy and politics, former state finance director Michael Genest and political consultant Joel Fox. I was astonished at how many different tax- and government-reform commissions and task forces they had been involved in over the years, going back to the 1990s.

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Both men remain pessimistic about California ever successfully coming to grips with its well-recognized structural budget problems. They think that while Gov. Jerry Brown's "surplus miracle" may have eased California's budget woes for the moment, revenue volatility and mounting debt continue to threaten the state's long-term fiscal stability. The recent passage by the voters of a tax increase provides the state with a fiscal breather, but it's a temporary measure that expires in seven years, and because it mostly raises taxes on the wealthy it actually adds to the volatility of California's revenue structure.

While there is broad agreement on the need to modernize the state's Depression-era tax structure, there is no consensus on how that can be achieved politically. But things may not necessarily be hopeless. Elaine Kamarck, the head of one of D.C.'s newest think tanks, the Center for Effective Public Management, has written an excellent little book about how to deal with knotty problems in politics and policy like the one being wrestled with in California.

Kamarck has been at the intersection of policy analysis and practical politics for a long time. In the 1980s, she helped to found the "New Democrat" movement that resulted in the presidency of Bill Clinton. As a senior staffer in Clinton's White House, she had a leading role in the National Performance Review, the most ambitious federal-government reform effort in the last half of the 20th century. After the White House, she spent 15 years at Harvard University teaching government management and politics.

How Change Happens -- Or Doesn't: the Politics of US Public Policy is an engaging read that opens with an intriguing exploration of how a seemingly weak and embattled president, Harry Truman, was able not only to get re-elected but also to get Congress to adopt the Marshall Plan, a commitment of nearly $160 billion in today's dollars, to assist in rebuilding postwar Europe at a time when industrial output in the U.S. was dropping rapidly, unemployment was rising and the country was wary of further entanglement with Europe.

Kamarck's analysis of how a "policy entrepreneur" can create "change in the messy world of partisan politics" moves systematically through evaluation of policy problems and solutions; the roles of insiders, factions and bipartisanship; and "politics as a fight." What is needed to achieve enactment of those policy solutions that emanate from commissions and task forces such as California's, Kamarck writes, is a "policy window" -- a brief period when the political stars align and the policy entrepreneur can successfully advocate for a solution that has been sitting on the shelf waiting for the right moment.

That such a window will open from time to time is almost inevitable in the shifting tides of politics and culture, but the opening will be fleeting. For the reforms needed in California's tax structure, the policy window could open early in Gov. Jerry Brown's likely fourth term.

Policy and politics can push against each other like tectonic plates with increasing pressure but no apparent movement. Although it doesn't seem like it at the time, big change is coming. Kamarck shows us how to be ready when the earth shifts.

Mark Funkhouser  |  Director, GOVERNING Institute
mfunkhouser@governing.com  | 

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