By CAROL SCHATZ

The recent state budget impasse and the imperfect compromise that brought it to a sorry conclusion are destined to repeat and grow ever more desperate until we make fundamental, structural changes in the way we govern California.

As a lifelong Californian, I have watched with dismay this grim downward spiral, sped along by political polarization, a penchant for governing by random special-interest initiatives, and term limits that encourage short-term thinking and avoidance of tough, long-term solutions.

Many of us in the business community have voiced our concerns. We have offered solutions. Like most Californians, we have stood by and watched slack-jawed at the slow-motion train wreck. And now, we have to finally say, "Enough!"

There is no more tomorrow for this debate. Now is the time to make choices tough choices, even distasteful choices if we are to stop this budget madness and begin building a better, more workable and dependable system and, as a result, a more hopeful future for all Californians.

The time for change real, fundamental change is upon us, and we must seize the opportunity.

On the May 19 ballot are six measures that together are a necessary first step. They may leave us still far from the finish line in this crucial effort to rebuild the state's finances, but we must begin the journey. We think these measures will start California in the right direction.

Gov. Arnold Schwarzenegger, governing from the large but too often ignored political center, has launched a campaign in support of Propositions 1A, 1B, 1C, 1D, 1E and 1F. Individually, each deserves our support. Taken together, they are a well-thought-out, cohesive plan for re-engineering the budget process.

Package deal

The Central City Association has endorsed all six propositions, and we encourage voters to approve them as a package.

- Proposition 1A, the Rainy Day Budget Stabilization and Accountability Act, forces the Legislature to put money away in good years, mandates increased savings and stabilizes state spending to avoid the lure of spending on one-time spikes in revenues.

- Proposition 1B, the Protect Education Funding measure, lays out a responsible timeline for returning funds to schools that were taken to balance the budget this year. The funds would come from the newly established Rainy Day Fund.

- Proposition 1C, the Lottery Modernization Act, would immediately raise an estimated $5 billion. Without these funds, the budget would again be in the red, and additional cuts would have to be made.

- Proposition 1D, the Children's Services Funding measure, would temporarily redirect excess funds from the voter-approved tobacco tax to pay for child health and social services.

- Proposition 1E, the Mental Health Funding measure, would temporarily redirect unused funds from the Mental Health Services Act to fund other health programs, especially those for children.

- Proposition 1F, the Salary Freeze for Legislators During Budget Deficits measure, would do just what the title says. And wouldn't that be refreshing?

We are supporting these measures because we believe they will work, and without them, the situation will only get worse. They are common-sense measures that are long overdue.

They establish firm rules to avoid mistakes of the past (1A); they will free the governor and Legislature to more equitably distribute revenues to important programs at this extraordinary time (1B, 1D and 1E); they will begin to hold elected officials more accountable (1A and 1F); and they will provide for a long-overdue updating of the troubled lottery system, which has been an underperforming asset for too many years (1C).

As a voice of business in Los Angeles, the Central City Association believes it is necessary to take a firm stand on these measures. The state's fragile finances and pathetic budget process may be costing us billions in investment and that means jobs, housing, educations and generally improved quality of life.

Companies from across the country may be reluctant to invest in a state embroiled in such political and financial turmoil especially when so much of it seems avoidable. These woes are perceived as the result of human error, rather than some essential deficiency in the resources, capital and labor of California.

In fact, we believe California is in most ways as strong and vibrant as ever. We have one of the world's great economies for good reason. We have a terrific and diverse core of industries, a hard-working labor force and private capital to fund an amazing array of enterprises that continue to pace the world.

Straightening out the budget process will provide a boost to all of these sectors.

We have the most ethnically diverse population of any state, or any nation. Voting patterns bust the state into red and blue counties in a colorful patchwork. But as different as one region or even neighboring cities are from one another, there is a shared history and common culture that unites us: Californians lead. And now is the time to do it again. We can voice our demand for change, for leadership, for common-sense governing by voting for Propositions 1A, 1B, 1C, 1D, 1E and 1F.

Carol Schatz is the president and chief executive of the Central City Association of Los Angeles, which represents businesses and associations in downtown.

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