Lessons for California from the History of Fiscal Constitutions

Abstract

California continues to undergo a series of budget crises. This paper examines the evolution of fiscal provisions in state constitutions over time, as well as in California. The evolution of fiscal provisions across the states shows an evolution from debt restrictions to balanced budget amendments to rainy day funds and tax and expenditure limits. California shows the same pattern. We suggest that many of the constitutional changes are responses to the previous constitutional change, which is why a definite pattern emerges. We end by suggesting that California return to the intent of the original 1849 debt restriction and require voters to actually raise taxes when they authorize new borrowing.