• Asm. Mike Davis has released a get to know you video in his race for the 26th Senate seat, the seat vacated by Mark Ridley-Thomas when he won the LA County Supervisor's race over Bernard Parks. His main opponent is Asm. Curren Price. The election is tomorrow.
• Local governments who took losses during the dissolution of Lehman Brothers want a bailout of their own. Apparently caveat emptor no longer applies as we head toward a slippery slope of bailouts for everyone. Yes, multiple investors lost their shirts on Lehman, through no fault of their own, but I fail to see how that demands a cash transfer from the Treasury.
• A new study links student obesity and proximity between schools and fast-food restaurants. I hope that study didn't cost too much, because it's completely intuitive. And I have no problem with urban planners who take this information into account when zoning areas around schools. There's a public health responsibility for government here.
• California is going to try to sell about $4 billion of bonds this week. It's not a particularly huge sale, but the response should be telling. Joel Fox notes that if we have problems selling these, don't hold your breath on the lottery securitization. With the recent bond rating decrease, they won't be an easy sell. Although, first-day sales yielded about $2.4 billion, almost half of the overall goal. John Myers examines why. I'd guess that investors know they'll get a great yield because they're demanding a high interest rate because of the state's fiscal troubles. With interest rates near zero, these are some of the best deals out there. But more bonds sold means more future payouts that hit taxpayers' bottom line.
• Finally, our condolences go out to the families of the Oakland Police officers gunned down this weekend. The incident is a profound tragedy for the City of Oakland and the entire state.
This morning, New York Times columnist David Brooks criticized his GOP allies on Capitol Hill for pushing a federal spending cap, calling it "insane." But here in California, the discredited theory of Reaganomics lives on ...
I've been on record supporting a special election to get the budget reform California desperately needs - such as scrapping the "two-thirds rule" in the legislature, or helping local governments raise revenue. But now that a statewide election is set for May 19th, no such measures will be on the ballot. Instead, the six propositions we will get to vote on are Schwarzenegger gimmicks that would cripple the state's ability to function, throw us further into debt, and roll back a small handful of fiscal victories. A campaign must start now to urge a "no on everything" vote, repeating the success that progressives had in 2005 by defeating Arnold's special election. The Governor, however, is a lot savvier this time. Prop 1B (which deals with school funding) is a naked ploy to keep teachers from opposing Prop 1A (an awful spending cap), and there's a dangerous possibility that organized labor will sit out this whole election. Democrats are not unified in their opposition, as State Senate President Darrell Steinberg even gave Schwarzenegger cover last week at a press conference when he promoted the "budget reform" package. Only by exposing this election as another Arnold scam can the state come out winning, helping to map a sane fiscal future for California.
WHAT'S THE BEST REASON to not cut our state education funding? In the future we'll need sharp minds to get us out of these budget messes.
I've been hunkered down for the past few days looking over documents and trying to make some sense of the budget package the governor just signed and how it will affect the bottom line of our schools. It's a precarious hodgepodge of $8.4 billion in cuts offset by reforms and accounting tricks. And all of this hinges on a package of ballot measures up in May, some designed to reshuffle prior ballot measures.
This labyrinthine budget reduces Prop. 98 guaranteed school funding from now through 2010 and then adds in another ballot measure to help to help restore the lost funds in 2011. Yet another tinkers with Prop. 98 formulas because the state now needs to borrow from future lottery earnings that would've gone to our schools.
Several of the seven ballot measures coming up on May 19 are so complicated that one could safely predict most voters probably won't do anything but vote no in protest, if they bother to cast a ballot at all.
The Field Poll finally got around to polling Prop 1A and the results are about what I'd expected after six weeks of the Reason Foundation and the Howard Jarvis Association flooding the state's media with lies. We have a 47-42 lead with 11% undecided. The common rule of thumb in California politics is that a proposition under 50% before election day is in serious trouble, but I'm not convinced that conventional wisdom will hold true this year. There are a number of propositions - such as 4 and 8 - that are also very closely split, and voters are showing a better understanding of the issues, with a reduced inclination to vote no as a knee-jerk reaction.
Still, the poll shows that we have a LOT of work to do between now and Tuesday. Especially when you look at the crosstabs.
Prop 1A will be decided on election day. Those who have already voted oppose it 39-51. That is very close to the number of McCain voters opposing Prop 1A, 35-56. Here in California absentee voters have traditionally leaned Republican and conservative. Those groups oppose Prop 1A - Republicans by a margin of 35-58 and conservatives by a margin of 30-64. Voters over age 65, those most likely to cast an absentee ballot, oppose it 38-53.
However, if California gets an Obama surge on election day, the outcome may be much different (preferences are listed in order of yes, no, and undecided):
Democrats: 53-30-17
Independents: 54-40-6
Moderates: 49-40-11
Liberals: 61-25-14
Obama: 56-33-11
Age 18-34: 50-38-12
If young voters in particular hit the polls in large numbers than we can win this on election day.
• George Skelton, California's High Broder Priest of Seriousness, engages in some more neo-Hooverism over Prop 1A. People, have you ever even taken an American history class? You know, FDR didn't skulk away from public works projects, he built. Yes, we need to do work on water storage and other important projects. But we also need High Speed Rail. Yes on 1A!
• Wow, I've never heard this before: Vote by mail is getting really popular. Wait, I think I have, when was it? Oh yes, before every single election for teh past 3 years. This has basically become the California story you write a few months out of the election when you have some free time so you can call in sick one day. Get well soon Jennifer Oldham.
• Here's an interesting op-ed from Ken Jacobs at the UC Berkeley Center for Labor Research in the SacBee regarding the role of health care in the financial crisis. Apparently health care is at least a partial cause to almost half of all foreclosures. We can't be fooled into thinking that health care should be a medium to long term goal because of the economy. We need to deal with this mess now, just as much as we need to bail out all the banks.
• Redstate sez that Obama's going to lose California because of the early absentee numbers. Oh noes!!! Except early absentees historically favor the GOP in a big way, and this clown's results show Democrats and Republicans dead even. Nice try. Just as a reference, Rasmussen has a poll out today with Obama up 61-34 in the state. Yes, that's a 27-point lead.
The latest canard that high speed rail opponents are trying to use to defeat Prop 1A is that the Authority failed to deliver a legislatively-mandated, updated business plan. Dan Walters made this the centerpiece of his HSR denial column today.
On the surface it sounds bad. But as the facts demonstrate this is a case where Republicans - and Democratic Senator Alan Lowenthal, who oughta know better - have set up high speed rail and Prop 1A to fail.
On August 26th AB 3034, after a weeks-long delay, was finally signed by Arnold Schwarzenegger. That bill directed the California High Speed Rail Authority to create a new business plan...by September 1. Giving the Authority merely five days to come up with the new plan.
Why the delay? The bill was passed out of the Assembly on May 29. From there it languished in the State Senate. Alan Lowenthal put out a nonsense study trying to cast doubt on the plan, but it was Sen. Roy Ashburn who played the central role in delaying AB 3034 into early August. By the time the Senate passed AB 3034, however, Arnold Schwarzenegger had started in on his temper tantrum, refusing to sign any new bills until we got a new budget. Arnold relented on AB 3034 - but had the bill bent sent to Arnold sooner, it would not have been subject to Arnold's tantrum, and there would have been time to produce it.
But it gets worse. As you know, the state budget delay this year was the worst on record - three months long. The state Constitution mandates that a budget be approved by June 15 and implemented on July 1 - the beginning of the new fiscal year.
The Authority's staff consists of 6.5 employees. Not a huge amount of staff to put together a business plan, actually, especially when you give them five days and then withhold a budget from them.
HSR deniers have now tried to use the delayed business plan to claim that Prop 1A and HSR are flawed. Today the State Senate held a hearing about the business plan, likely designed and timed to hurt Prop 1A's chances. You can see the complete video here and the YouTube of the key exchange above. At the hearing Quentin Kopp explained that the plan will be ready around November 8, after proper work goes into its production and review by Goldman Sachs.
Roy Ashburn tried to attack Kopp over the delay, asking "You and your Authority are in violation of California law as we sit here today. If you were in my chair, what would you say?"
Kopp's reply:
If I were sitting in your chair I would use temperate language. Did you ever read the state Constitution? Did you ever read Article 4, Section 12? Do you know what it says? It says...the Legislature shall pass the budget bill by midnight on June 15 of each year. You're in violation of the law. Consider the outcome should a taxpayer bring a suit to recover the money that you eventually drew between June 15 and September 23 of this year. Consider the fact that people don't work without being paid. Consider the fact that my executive director hasn't been paid since January of this year. Consider the fact that when you finally appropriated the money the contractors who expect to be paid can finally begin work on the business plan. I'll tell you why people should believe me. Because I have an impeccable reputation for honesty, integrity, and independence.
Ashburn could not reply to that point. He avoided it and tried to repeat his same points. But the smackdown was delivered, and Ashburn is exposed as a fraud. The state legislature, led by Republicans like Ashburn who held this state hostage for three months, refusing to do their Constitutional duty to pass a budget because they were demanding unspecified cuts, have absolutely NO place to be criticizing ANYONE else in the state government for not following the law. Ashburn is full of it and kudos to Kopp for calling him out on it.
Kopp drank Roy Ashburn's milkshake. I think we're done with this whole "business plan" nonsense, aren't we?
Note: I will be on KRXA 540 AM this morning at 8 to discuss this and other topics in California politics
The dominant theme of the 2008 campaign - from the presidential race on down - has been lies. Republicans and conservatives have resorted to an unprecedented amount of outright lies to try and defeat progressive campaigns and policies. There has been a marked uptick lately in the amount of false advertising especially on the propositions, so I thought I'd collect some of them here.
Prop 4: Planned Parenthood is facing a malicious attack from Prop 4 proponents. From an email sent out to the No on 4 list yesterday:
A new ad from the proponents of Proposition 4 twists a tragic case of a teen trapped in an incestuous situation, and falsely claims that Prop 4 would have helped. What is most outrageous is that Prop 4 would have put that teen in an even worse and more desperate situation. It would not have helped this teen in any way yet the anti-choice extremists behind Prop 4 continue to use tragic events to lie to California voters.
Visit No on Prop 4 to donate and find volunteer opportunities to help defeat this attack on teen safety and abortion rights.
Why all the lies? Partly because if we had a discussion on the actual merits of the issues, Prop 1A would pass and Props 4 and 8 would fail by large margins. The media plays a role here as well, letting groups like the Reason Foundation or the Mormon Church spread false claims without pushing back for the truth. Stenography has replaced journalism, as media outlets just report what "both sides" have to say regardless of whether or not there's any truth to the claims. And the op-ed pages and TV ads exist in a zone of truthiness, where nobody holds the liars accountable.
Except us. California progressives, the blogs, the grassroots. All the more reason for us to Stay For Change and save California from the liars on the right who wish to set this state back decades instead of help us embrace a better future.
Not content with denying to Californians the numerous tangible benefits of high speed rail, Prop 1A opponents have retreated into a revival of Herbert Hoover's economic policy in order to try and defeat the most important project Californians have considered in nearly 50 years. Their argument is that in an economic crisis, we should turn to austerity instead of following the tried and true path of deficit spending on infrastructure that provides short-term job relief and long-term economic value.
Today we have numerous articles and media outlets starting to push back against the New Hoovers. From newspaper editorial pages to leading economists there is a growing consensus that we must use deficit spending - in our case, bonds - to spur economic growth through infrastructure projects.
Conservative Financial Times columnist Samuel Brittan said the fears that short-term stimulus spending by governments will raise deficits miss the point. Even the $700 billion Wall Street rescue plan approved by the U.S. government - part of a more than $2 trillion international bailout of banks by governments around the world - does not change the equation.
"Maxims about debt that might be prudent for families can be the height of folly for government," he wrote.
British economist John Maynard Keynes is credited with the basic insight, arguing that the Great Depression was prolonged because Western governments insisted on balancing budgets, raising taxes and cutting spending at a time when private economic activity had ground to a halt.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan research group, said both candidates must put together a credible long-term plan to deal with the exploding deficit, but that the government should be priming the pump in the short term.
And to provide that help, we're going to have to put some prejudices aside. It's politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold....
All signs point to an economic slump that will be nasty, brutish - and long....
And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn't needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let's get those projects rolling.
The growing unanimity of opinion on the need for deficit spending for infrastructure projects is striking. Krugman, MacGuineas and Brittan join leading economic figures like Nouriel Roubini and Lawrence Summers in calling for bold action to mitigate the deepening economic crisis.
Or, why the Sac Bee and Modesto Bee are wrong to oppose Prop 1A.
California is staring into the abyss. 30 years of conservative economic policy, including tax cuts, have brought the national and the state economy to the worst economic crisis we have faced since 1933. The state budget is in perennial deficit - caused by those same conservative policies. Since Prop 13 in 1978 the state's revenue levels have been set artificially and deliberately too low to maintain our core services. The purpose was to force crises like this and tell Californians "either we raise your taxes or we destroy government."
The budget deficit is a difficult problem. But it can be closed fairly easily by returning to the income tax levels on the wealthy that Ronald Reagan supported, that were in place from 1991 to 1998. It is a question of political will - our budget deficit is not a force of nature but a deliberate creation of man. What we make, we can unmake.
More importantly, how exactly are we going to close that budget deficit, provide short-term relief and long-term economic growth without infrastructure projects? Many economists argue that government spending on infrastructure must be part of not just an economic stimulus right now but also of any financial rescue plan. These economists understand what we at this blog have understood - that we need stimulus to revive our economy.
Banks aren't lending just because of the bad assets on their books - they're not lending because the economy is sliding into recession. To stop that we need government spending on new stimulus. That was conventional wisdom during the Depression and it eventually brought us out of the depths - while also setting up the prosperity of the postwar era.
Unfortunately California newspaper editorial boards remain trapped in the failed conventional wisdom that brought us to this point of crisis. Instead of returning to tried-and-true economic principles of infrastructure stimulus, they argue we should sacrifice the future to the failure of the present. That because we are in crisis now, we cannot act to rescue ourselves from that crisis, and cannot act to provide a more stable future.
Such is the position of the Modesto Bee in its editorial against Prop 1A and of the Sac Bee. They both claim it is "too costly for the state." In doing so they merely demonstrate their lack of knowledge about high speed rail and their unwillingness to act to reverse the slide into severe recession.
The passage of Prop. 1A would generate an estimated 160,000 construction-related jobs at a time when the state could use an economic stimulus. But its even greater long-term value to the state will be the economic and environmental benefits of connecting urban centers with growing inland cities that don't have major airports - and providing an alternative to the cattle-call flights between the Bay Area and Southern California.
They're absolutely right - and even understating the case. The long-term value isn't just in providing alternatives to cattle-call flights, nice though that will be. The long-term value comes in providing an alternative to oil, period. Our state's dependence on oil is causing financial and economic havoc. Those who make baseless criticisms of Prop 1A's financing are ignoring the far more risky and damaging impacts of "staying the course" and doing nothing in the face of a climate and energy crisis that is strangling our economy.
The editors had a good response to those fiscal critics:
Opponents have seized on the understandable anxiety about a venture of this magnitude and have questioned everything from its cost projections to ridership estimates to its environmental benefits. In a meeting with our editorial board this week, they suggested the money would be better spent on relieving gridlock on regional roadways.
However, the fiscal safeguards on Prop. 1A were toughened substantially with the Legislature's recent passage of AB3034. It limited the amount of money that could be spent on administration or other items unrelated to construction. Also, construction could not begin on any segment of the project until it was certified that the funding for it had been secured. State funding would account for about half of the project; the balance would come from the federal government and private sources.
HSR deniers want Californians to believe that if this passes that we're going to be DOOMED, doomed I tell ya, especially in our state budget. But the Chronicle points out this is nonsense. If the feds and private enterprise come through as they have consistently indicated they will then we build it and everyone's happy. If they don't come through, we don't build it, no money spent, no harm done.
They close well:
Prop. 1A presents an ambitious vision that is well tailored to the state's transportation and environmental needs. We recommend its passage.
California newspapers, the LA Times excepted, have been using their editorial pages to try to convince Californians that somehow, an economic downturn caused by overdependence on oil should not be addressed by job-creating projects that would provide renewably powered transportation and enable economic growth over the long term. Most recently it's the Redding Record-Searchlight making the argument that somehow Prop 1A would hurt California's budget and economy, when in fact it is a necessary part of the solution.
It remains a key part not just of the state of California's overall water storage and provision system, but was crucial to the Redding economy during the 1930s and in the years since.
It was also a Depression-era project. Built at a time when California barely had enough money to balance its own budget. In 1933 California passed a bond measure allowing money to be spent on the dam - $170 million, a significant sum in those days. By 1935 California had secured federal funds to help begin construction on the dam. The jobs created by the dam project and the long-term value of the Central Valley Project were considerable. Redding got badly needed jobs as well as flood control. California got jobs and a base for long-term agriculture, an industry that remains significant to this day in Redding.
Had California rejected the 1933 Shasta Dam bond, chances are the dam would not have been built for a decade or two. Redding would have lost out on those crucial jobs in the depths of the Depression and California agriculture might not have had the stable water source it needed to be productive for these last 70 years.
We can go on. The Golden Gate Bridge funding fell through after the 1929 stock market crash - so voters in the North Coast counties that comprise the Golden Gate Bridge District had to approve bonds, which they did in November 1930. Similar bonds had to be sold for the San Francisco-Oakland Bay Bridge, also in the depths of the Depression. The two bridge projects not only provided jobs when they were desperately needed but enabled massive economic growth in the Bay Area after World War II.
The argument that we cannot build high speed rail because of the economic crisis or credit crunch simply doesn't hold water. The economic downturn is an argument FOR high speed rail. Worse, the Redding Record-Searchlight's reasons for not supporting Prop 1A make little sense:
An alluring investment in 21st-century transportation for a growing state? Yes. It's also $10 billion that California doesn't have.
Of course California doesn't have $10 billion - which is why we're going to borrow it. The state's nonpartisan Legislative Analyst has determined we actually can afford Prop 1A. Repayment lasts over a 40-year term. The jobs, tax revenue and economic activity created by high speed rail combined with the savings on oil consumption and carbon emissions are likely to outweigh the annual debt service cost.
If it were up to HSR deniers like the Redding Record-Searchlight we'd still be in the Depression. We wouldn't have the dams and bridges that made our late 20th century prosperity possible. And if we follow their advice we will have a hard time getting out of whatever we're going to call this economic crisis.
Here we go again, another round of endorsements. The bulk of these will be fairly uncontroversial here. On Prop 7, Brian Leubitz did not vote due to the fact that he works for the campaign. See the flip for more information on our positions.
Yesterday's news that Democrats were considering borrowing to balance the budget, specifically the plan to raid transportation and local government funds, brought a vigorous response from Democratic leaders in the legislature. Don Perata, Karen Bass, and John Laird all issued statements claiming to not support budget borrowing, although the parsing of the words matters.
Today's Los Angeles Times story about state budget negotiations is inaccurate and misleading. Democrats have never entertained massive borrowing as a solution to this year's budget problem. In particular, Democrats have never advocated nor believed in taking money from Propositions 1A, 42 and 10."...
"Doing another get-out-of-town-alive budget would do nothing to help this state but rather would endanger Californians' standard of living and economic future."
Denise Ducheny chimed in with her own statement along these lines, and later in the day Bass and Laird added their stance. Karen Bass:
"Major borrowing is not part of the Democratic budget plan, and we don't believe it should be part of the final solution. Our proposal balances the budget with a mix of billions of dollars in difficult spending cuts and new revenues, similar to those proposed by a previous Republican governor. It's gimmick-free and honest. It closes our budget gap in a straight-forward manner, and eliminates out-year deficits."
John Laird:
Any proposal to borrow from voter-approved propositions is not coming from those of us who want to balance the budget without borrowing or gimmicks.
Strong words - but nowhere in them did anyone explicitly rule out borrowing from the transportation and local government funds. It's comforting to know that Democrats did not propose these plans and that they do not wish to use budget gimmicks - but a firm rejection of the plans is what we really needed to hear.
Sure, some might say we should not be negotiating in public. But if Republicans get to say "no new taxes" then surely Democrats are able to say "no new raids." As I argued yesterday raiding these funds would not only cause the state serious economic harm, but it would severely weaken the Democrats' political fortunes in the process.
Californians' opinion of the Legislature is low, and many don't trust their politicians. That gives the right wing a major opening to push through damaging things in the guise of populism. Democrats need to stand up to Republicans and protect working Californians. Refusing to even consider raiding the Prop 1A, 10, and 42 funds is a small but necessary place to start.
