People seemed to really engage with this post about a Constitutional convention, so I wanted to follow up with some of my thoughts for what a convention could tackle and what it could look like. As it happens I attended a town hall meeting about a proposed ConCon a couple weeks ago in Santa Monica, featuring Bob Stern of the Center for Governmental Studies, Jim Wunderman of the Bay Area Council, Steven Hill and Mark Paul of the New America Foundation, Asm. Julia Brownley (AD-41), Santa Monica Mayor Pam O'Connor and LA City Councilman Bill Rosendahl.
At the root, a Constitutional convention must concern itself with restoring confidence in government. Right now, that's at an all-time low, especially after budget agreements hashed out in secret that defy the will of the people and an erosion in the public trust in lawmakers to do the right thing in Sacramento. Government is not responsive, in fact in many cases it cannot Constitutionally be responsive to the popular will. The institutions have become paralyzed and captive to special interest lobbying. We have ten lobbyists for every legislator in Sacramento. And we have turned over the reins to a new branch of government, the ballot, and anything significant must be mandated by a vote of the people. As Julia Brownley, now in her second term, said, "Government structure is broken and we need to fix it... I didn't understand until I set foot in the Legislature the paralysis and gridlock that kills the system." I think Sen. Mark DeSaulnier, who is carrying Constitutional convention legislation in the Senate, put it well when he said that California remains at the vanguard with anything that can be accomplished on a majority-vote basis. Anything with a 2/3 threshold, in other words anything fiscal, is a mess. And it needs to be solved.
So how would a convention, the first of its kind since 1879, be structured? (flip)
That's why the Assembly has stalled, we're hearing. The education part of the budget bill would statutorily put into language a payback of $11 billion in education funds denied to schools under the Proposition 98 mandate. The Yacht Party doesn't want to pay it back. And that's because they don't want to pay for it in the future.
The result of not writing into language a payback of these funds will be that education interests will sue, and win, and it will likely cost the state more in the long run. But you can say "it will cost the state more in the long run" about virtually every aspect of the budget, so why should that trouble anyone?
...so the Assembly came back in session briefly to vote for permanent freezing of COLA in social services programs, and CalWorks and IHSS anti-fraud measures. It got 43 votes, and only needed a majority, so it passes. Still nothing on the Prop. 98 payback changes.
Asm. Reeps holding up $24 B in budget solutions due to spat with Senate Reeps. Asm. Reeps kidding themselves if they think Senate returning
7 minutes ago from mobile web
Asm. Reeps mad because Senate Republicans because Sen. Reeps sent over one bill not two on educ. cuts & Prop 98 repayment. Dont they talk?
10 minutes ago from mobile web
I'm guessing they're pissed because they wanted to be able to vote against the repayment - which could pass by majority vote - and for the cuts to education. Complete political posturing. Too late, the Senate jammed them, and now they'll either walk the plank or blow up the whole thing. Because they want to be successful thieves that don't pay back what they steal.
Hopes for a deal on the California budget faded last night as the Big Five could not agree over the big issue of whether and how to suspend Prop. 98, the mandate for education funding.
The education money discussion is not new; much of it dates back to the February budget negotiations, which resulted in a ballot measure asking voters to offer blessings upon a supplemental payment. Voters rejected that measure, Proposition 1B.
And as with most education financing debates, this one lands squarely back at the maze of formulas and calculations that embody the 21-year old funding guarantee enshrined into the state constitution by voters, Proposition 98.
In a nutshell, the current debate focuses on whether schools are owed money in the future to make up for some of the recent spending reductions, and whether that obligation (the so-called "maintenance factor") should be codified in law as part of the current $26.3 billion deficit deal.
"The Prop 98 law is so confusing," said Senate President pro Tem Darrell Streinberg to a throng of reporters outside the governor's office, "that we want to make sure that there is clarity."
My belief is that education leaders will win this money in the courts, no matter how long Arnold and the gang put it off. The lawsuit has already been filed. The Democratic leadership want to just deal with the $11 billion dollars in essentially stolen money from schools inside the budget agreement by promising the money in the out years, while the Republicans and Arnold don't.
So if you wanted a 2010 campaign slogan, you have the source material.
It looks to me like Arnold is holding out simply so he can prove a point. His effort to insert privatizing social services eligibility at the last minute is flawed enough that even the Yacht Party might have trouble stomaching it. The proposed cuts in the deal are really intolerable but not what the Governor promised at the outset. It's unclear whether the Governor will get his anti-fraud provisions, also inserted late into the process. And it's completely unclear, given the deal likely to come out, why we had to wait two weeks for virtually the same deal.
Whatever budget deal ultimately is passed -- and in this economy it'll only be a temporary fix, at best -- virtually the same agreement could have been reached weeks ago [...]
Democrats produced a stop-gap plan supported by Assembly Republicans that would have staved off IOUs. They proposed $3.3 billion in cuts to education and other programs that would have kept the cash flowing, at least for a few weeks. It would give them time to negotiate more cuts. Schwarzenegger rejected the idea and persuaded Senate Republicans to follow.
That's where the governor began bobbling the ball, although his coaches figured he was playing to his fan base, what's left of it.
Issuing IOUs will cost the state roughly $26 million in interest for July, the state controller's office estimates. The IOUs also prompted Wall Street bond rating agencies to lower California's credit to near junk status. That potentially could cost the state $7.5 billion over 30 years, according to the treasurer's office.
Schwarzenegger, aides say, calculated that Democrats wouldn't negotiate seriously without facing a deadline, such as the latest: most banks refusing to accept IOUs. Negotiating piecemeal would get nowhere, the governor believed.
But he might have dodged IOUs completely. Guess it doesn't rankle much that the state he has governed for nearly six years must now pay bills with scrip.
Schwarzenegger's clumsy attempt at the Shock Doctrine, when the deal Democrats were willing to agree to was painful enough, was about as irresponsible as a chief executive could be.
...just one more thing on this that the LAT article makes clear. Schwarzenegger AGREES that education should be paid the money borrowed from them in the out years. But Democrats suspect that his fingers are crossed and they want it in writing. That's the argument now.
(KQED here in the Bay Area will be airing live coverage at 10, as well as an hour of "pre-game" coverage on their Forum program at 9. You can listen live here. The California Channel will be covering it live as well. - promoted by Brian Leubitz)
Arnold Schwarzenegger delivers the State of the State Address at 10am this morning. Typically he has done this speech to coincide with the evening news. This year he's trying to hide it.
I don't blame him. As David Greenwald discusses, people pretty much know the State of the State already.
As Governor Schwarzenegger prepares to report on the State of the State tomorrow, California's families today declared that "the State of the People" is increasingly grim with a record number of Californians having lost their jobs and health care and their homes. California educators, students, health care workers, seniors and people with disabilities said more state budget cuts are exactly the wrong prescription after they've suffered the consequences of more than $16 billion in state budget cuts to critical services over the last 3 years.
"California families are here to report what you won't hear from the Governor tomorrow: budget cuts over the last three years have deeply wounded our families' health and well-being, diminished our children's opportunity for the future, and damaged our economy." said Evan LeVang, Director, Independent Living Resource Center of Northern California.
Californians who have personally been affected by budget cuts detailed the severe consequences that the cuts, including $10 billion in cuts already this year, have had on California families who have already been hit hard by the nation's economic meltdown.
"Before our elected leaders slash another dollar from our hospitals, they should think about what health care would be worth to them if their husband, their daughter, or their father needed care. Because every patient that comes to our hospital is someone's parent, spouse, or child," said Beverly Griffith, an environmental services worker and SEIU member at Summit Medical Center in Oakland. "While longer hours and staff shortages caused by budget cuts have been rough on hospital workers, they've been unbearable for our patients."
And of course, this is bound to get worse. It's important to split the two major problems into their discrete parts - we have a budget crisis AND a cash crisis. Even if the budget hole is at least partially filled (and with any luck, we'll be able to access some federal stimulus money, either through direct payments or tax revenues on increased economic activity, by February), the cash crisis would persist, and we could see IOUs even after a budget deal because of the inability for California to go to the bond markets and borrow. And the converse is also true. In sum, it's a different problem which needs a different solution. The LAO is obscure here, but I believe "restricted funds" refers to Prop. 98 money:
The Legislature's budget analyst, Mac Taylor, says that schools, colleges and bondholders will have first call on the state's money if its cash flow crisis hits home in a few weeks.
But Taylor says in a report on the looming cash flow crisis that even if the Legislature fails to reach agreement on closing the state's budget deficit, the cash crisis could be relieved with some emergency legislation to allow more internal borrowing of restricted funds.
Gov. Arnold Schwarzenegger and legislative leaders have been conducting closed-door negotiations this week on both the budget and the cash crisis, which are related but separate issues. Controller John Chiang has said that the state will be forced to curtail state disbursements sometime in February unless there's rapid action on the budget and/or cash flow-related legislation [...]
The administration has asked the Legislature to approve measures that would free up about $2 billion in restricted funds that could be borrowed by the state general fund and thus stave off the cash crunch. It's also said that rapid action on the budget would allow the state to defer more than $1 billion in payments to schools that otherwise would have to be made.
As a budget solution would at least have some impact on loosening the bond markets, this could be the intent of Schwarzenegger's delay - so he can raid dedicated funds for schools and health care. It's important for us to start figuring out Arnold's gambit. When I talked to State Senator Fran Pavley at one of the election meetings last weekend, she said "It's hard to negotiate with someone if you don't know what they want." My next several posts here will seek to figure that out.
Anyway, you're not going to hear it at 10am, I gather.
98 N Eminent Domain. Limits on Government Authority. 357,626 43.3% 467,116 56.7%
99 Y Eminent Domain. Limits on Government Acquisition. 536,649 65.5% 282,737 34.5%
It's a bigger problem for 98 than just winning. Because the props are related, 98 has to do better than 99 to become law. I can't see how that could possibly happen, even though these are early numbers.
UPDATE: CBS2 in LA has called a victory for Prop. 99. Good news.
UPDATE: And 98 is going to lose outright, and lose big. Fantastic. Right now some idiot Prop. 98 supporter is on my teevee talking about how they'll "keep fighting." We're going to fight until nobody has rent control!!!!
