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25 Things About The New California Budget

by: David Dayen

Wed Jul 22, 2009 at 09:31:45 AM PDT


I tried one of these for the February budget deal, and I think I can actually get to 25 this time.

1. Included in the budget is the first offshore drilling in California in 40 years, at the Tranquillon Ridge site off the coast of Santa Barbara.  This represents a power grab by the Governor and the Legislature, taking the authority for drilling leases away from the State Lands Commission.  John Garamendi will fight like hell against this.

2. The drilling deal actually calls for an end date on the entire existing platform by 2022, but that appears completely voluntary on the part of the PXP energy company doing the drilling, because the federal government holds jurisdiction over the existing platform.

3. The coordinated hissy fit from the Yacht Party last night over prison reform in the budget has metastasized overnight.  Sam Blakeslee made up a number of "27,000 early releases" from prison by confusing "goal" with "release," and he sent it along to the LA Times so that number would become hard-wired in everyone's head.  They printed it dutifully, and now the Yacht Party has a reason to vote against the budget and distance themselves from the pain.

4. On planet Reality, we're talking mainly about terminally ill and infirm prisoners returned to home confinement with electronic monitoring, and attempts to deport undocumented immigrants now serving jail time.

5. There is also real parole reform in the bill, reducing the number under supervision and focusing resources on those who need it the most, which I would tentatively say is a plus.  Darrell Steinberg said, "We have not done a very good job in California of distinguishing between people who are violent and who belong in prison for a long time, and those who could succeed on the outside with supervision, who have not demonstrated any history of violence."

(the other 20 on the flip)

David Dayen :: 25 Things About The New California Budget
6. And the deal calls for a sentencing commission to make recommendations by 2012 that would hopefully reverse the endless sentencing increases we've seen over the last 30 years which have overfilled our prisons and busted our budget.  The Yacht Party thinks prison spending is magic and 170,000 prisoners where 100,000 fit is perfectly fine.

7. One of the few decent things the Governor proposed was a surcharge on property insurance to fund firefighters, who frequently battle wildfires and save homes.  That got dropped from the final deal.

8. The deal would privatize welfare and social services enrollment, essentially a $2 billion dollar annual giveaway to provide a function government has shown itself capable of providing.  The philosophy that brought you no-bid contracts to Halliburton in Iraq has come to California.

9. We, the taxpayers, will be providing a no-interest loan to the state, through a 10% increase in state income tax withholding starting in January 2010.  Eventually the money will come back to taxpayers in their refund checks, but we'll basically float the state until then, directly canceling out the reduction in federal withholding as part of the stimulus package.

10. School districts can reduce the school year by a week under this plan to save money, and special education students can be exempted from the High School Exit Exam.

11. Public schools will get back the $11.2 billion owed to them over the last two years under Prop. 98 mandates once the General Fund starts growing again.  Apparently that will be in budget language and voted on by the Legislature.

12. The Integrated Waste Management Board, which costs the state $0.00 but looks fishy politically because ex-lawmakers get six-figure salaries for sitting on it, will be dissolved.  I don't think canceling a board that doesn't cost the state any money (it's entirely paid by waste management company fees) represents "blowing up the boxes".

13. The SEIU has mailed out strike authorization ballots protesting the continuation of 3 furlough days a month, amounting to a 15% salary reduction.

14. OC Progressive has been all over a deep-in-the-weeds proposal to "securitize" redevelopment debt, which would in effect tie up 10% of all property taxes for 20-30 years to cover one year's worth of spending.  It's maybe the most insane thing I've seen in here.

15. The California Budget Project's assessment of the deal is a must-read.  Using scare quotes around "solutions" is particularly amusing.

16. This budget calls for an $875 million dollar reserve, which will probably be gone the moment that July revenue figures are announced, if recent history is any guide.  That's because practically every month for the last two years, results have come up about $1 billion short of expectations.

17. The total reduction in funding for state parks is $8 million dollars.  Parks officials and the legislature may be hoping that any parks which have to close will revert back to the federal government or be kept open by philanthropic organizations.  I'm not sure that's entirely likely.

18. Much of the money used to cover the deficit, as the CBP notes, would eventually have to be repaid, including education money and local government funds seized under Prop. 1A.  Add that to other gimmicks like the withholding increase and the one-day delay of state worker salaries from June 30 to July 1, 2010 to push that payment into the next fiscal year, and the leaders really didn't fill this deficit almost at all.

19. Initially, the shortfall to Healthy Families, the state's version of SCHIP, was believed to be $90 million.  But this budget would increase that to $144 million, with more lost from federal match, and at that rate, it's unclear if First Five will be able to step in and provide all the funding to cover the gap.

20. In particular, the health and human services cuts really make this a different state, one that's less forgiving, dirtier, shabbier, and simply a harder place to live.  Not for the largest corporations in America, of course, whose massive corporate tax cuts from prior budget deals remain.

21. The faces of budget failure:

Miriam Ibarra, 31, of Victorville, sighed when she heard about the budget cuts affecting the Healthy Families program, the low-cost medical insurance program for the working poor. About half the children enrolled in the program appear likely to lose their healthcare.

"It would really affect me because I don't have any other kind of insurance," she said. "Honestly, I don't even know what I would do" without it.

Ibarra's husband is a truck driver who doesn't get health benefits because he is self-employed. Ibarra, a stay-at-home mom, and her husband go without health insurance. But the Healthy Families program covers the couple's two children, ages 14 and 10, for a premium of about $10 a month, with $5 co-pays for some visits.

22. Not much discussed in this budget is the multiplier effect of the cuts on federal matching dollars.  Cuts to Healthy Families like the one described above are actually three times as much as they look on paper, because the federal government adds $2 to every $1 the state spends.  The White House is very upset about cuts like this that significantly reduce coverage for children, and others that blunt the effect of federal stimulus dollars.

23. The OC Fairgrounds will get sold.  The Fair Board might buy it themselves and form a nonprofit to manage it.

24. There is no #24.

25. If you think this is a good time for a "Winners and Losers" roundup, Steve Maviglio has one.  A bit awkward, I'd say.

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For 24 (5.00 / 1)
You might as well add that the revenue projected from sale of part of the State Compensation Insurance Fund is either a huge tax increase for small businesses or just an out and out lie, based on the unanimous opposition of the Scwarzenegger-appointed board that would have to approve it.

OC Progressive is Gus Ayer, former Fountain Valley Council member.  

I don't think anyone (0.00 / 0)
believes that the State Compensation Insurance Fund will attract even a dollar.  I tend toward the out-and-out lie side of things on that.  I think it'll get as many bidders as the Watergate hotel did yesterday.

Actually no #24 was a joke...


[ Parent ]
Yes, It's pretty unlikely (0.00 / 0)
I have a friend who has worked in the workers' comp business his whole life, and he's seen these proposals floating around for years.

He thinks the State Fund has grown too big since the last round of crises in workers comp when many carriers abandoned the state, and there's a part of the business that would be profitable for private carriers with a few conditions. First, the state would have to assume risk and privatize profit. Secondly, the state would need to ignore any fiduciary responsibility and cavalierly disregard the fact that the assets belong to the people who have paid premiums. Thirdly, rates would have to rise substantially, with the private carrier allowed to take the cream of the business and a disproportionate share of the assets.

Like many of the Governor's proposals, deeply immoral and illegal on its face, and if it actually succeeds it is a huge tax on small businesses and a looting of assets held in trust for those businesses.

Most cynically, it's a way for attorneys and financial advisers to generate some substantial fees for a proposal that will go nowhere.

OC Progressive is Gus Ayer, former Fountain Valley Council member.  


[ Parent ]
Some of the provisions get a lot of attention (5.33 / 3)
Closing the state parks got tremendous attention.

I think that it's part of a very deliberate hide-the-ball plan here to throw out these attention grabbers, then back off so our lazy press corps ends up ignoring the more complex issues like the billion dollar lie about the SCIF, which is a complex issue that's boring and doesn't have good pictures.

You'll still see far more coverage of the 8 million cut to parks than the 7.4 billion borrowing package for redevelopment, the billion dollar hit to the state fund, or the proposal to piratize benefit processing.

Or the savagery where first Arnold proposes eliminating welfare and SCHIP, then he guts them and sabotages the process for applying for them.

OC Progressive is Gus Ayer, former Fountain Valley Council member.  


re: State Parks (4.00 / 2)
The information I saw eliminated all permanent funding for the parks, replacing all but 8M in one-time temporary funds for this year, so even that "win" is misleading.

[ Parent ]
Winners and losers (4.25 / 4)
I am not surprised to see Maviglio try and spin this as a "win" for the Dems, but for the life of me I cannot see how they can be seen as winners. They have been shown to have no plan whatsoever for dealing with the basic budget crisis. They have proven they will cave to Republican demands. They have proven they will get suckered into providing all the votes for the budget while Republicans sit back and throw bombs to score points.

Mark my words - there will be a huge undervote for state legislative races in November 2010, and I cannot imagine a scenario where Democrats add any seats in the Assembly (they will likely pick up SD-12 on the strength of Anna Caballero's campaign and the apparent lack of a strong Republican alternative), and can in fact imagine Dems losing one or two seats.

Sacramento Dems are totally rudderless and clueless about the crisis they face. This budget deal is utterly damning of their "leadership".

You can check out any time you like but you can never leave


Will any incumbents up for re-election... (0.00 / 0)
...not get re-elected in 2010?

I don't believe a single incumbent, Democrat or Republican, failed to get re-elected in 2008.


[ Parent ]
Good post (0.00 / 0)
#17 interests me. How would the state give public lands to the Federal Government? Is the cession language included in the budget and have we any commitment from our Senators that the Congress would accept such a cession?

Those philanthropic groups, or "Friends of" as they're often called, are great, but very unequally distributed. Obviously, parks closer to wealthier, more populated places get more money and more volunteers.

But I do believe that good Friends groups can be established for almost any park area with a little training and seeding. It's something the Sierra Club should look at.


Maybe the Republicans should read (4.00 / 1)
The Park Preservation Act of 1971.

Not that they have anything but contempt for ethics, fiduciary responsibility, or the law. And maybe they can get some clueless Dems to vote to do away with this law in exchange for a handful of magic beans.

OC Progressive is Gus Ayer, former Fountain Valley Council member.  


[ Parent ]
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