In 2006, the Schwarzenegger campaign uncorked an ad almost immediately after the primaries showing Phil Angelides walking backwards, the assumption being that he would take the state backwards as well. One of the ads liberally quoted Angelides' rival for the Democratic nomination, Steve Westly, using the bruising primary against the winner. "What if Steve Westly was right?" the announcer says, after citing Westly's rhetoric in claiming that Angelides favored $10 billion in new taxes. Steve Westly wrote most of Arnold Schwarzenegger's early strategy and even his campaign spots, as Angelides was defined by his opponent swiftly.
Steve Poizner basically bestowed the same gift on eMeg Whitman over the weekend. The ads about Whitman's failure to register to vote for 28 years write themselves, but Poizner took the liberty of making the ad. If Republicans know how to do one thing well, it's go hard negative, and this ad will probably be very effective to the GOP primary audience. It will also be effective as a "here's what Republicans say about Meg Whitman" ad next year, should see prevail in the primary. Poizner actually reiterated his call for Whitman to drop out of the race "for the good of the party" over the weekend at the Republican convention in Indian Wells. The issue received major pickup throughout the media.
And Whitman did herself no favors at all with some of the worst damage control you'll see in politics, as she repeated like a mantra this line about how "there is no excuse for my voting record," completely avoiding any specifics about why. If she manages to win the primary, expect to hear this audio right through to next November. It's cringe-worthy.
I'm guessing the Republican Governor's Association just tried to pull back their invitation to Meg Whitman to come to any of their gala events.
This is terrible crisis management, of course. And it suggests that the general election would be no kinder on eMeg. But it's not like the split in the US Senate race, with serial non-voter Carlyfornia going up against wingnut conservative Chuck DeVore (The LA Times gets this wrong by trying to impose a blanket comparison). The Yacht Party grassroots has figured out that they have no candidate in the Republican primary, and regardless of who wins they probably won't be all that excited to work for the top of the ticket.
For activists such as Mike Spence, past president of the conservative California Republican Assembly, such centrist talk inspires unease following what they said was Gov. Arnold Schwarzenegger's betrayal of the Republican base.
Spence called the Republican governor a failure and blasted him for breaking his promises to conservatives by, among other things, approving the biggest tax increase in state history earlier this year. Schwarzenegger has also championed traditionally liberal causes such as Assembly Bill 32, which requires the state to reduce greenhouse-gas emissions by about 25 percent by 2020.
"After the governor, people are cautious about who they support," Spence said.
Of course, this could be true of the Democratic grassroots as well, depending on circumstances. I think the only certainty in next year's elections will be the low turnout, as a slice of both sides stay home for their own reasons. But the Yacht Party's cast of characters look particularly uninspiring.
While it is great fun to label the Republicans as the Yacht Party, and frankly all to easy to do with playboys like Nevada Senator John Ensign continually in the news. However, most Republicans are not like that. They are carpenters, small business owners, farmers. Most of them don't even own a row boat, let alone a yacht.
I don't think that I have ever seen any party so out of touch with it's constituents and so dependent on the Limbaugh, Hannity, Beck, Savage, etc. media to keep things energized.
Speaking of Hannity, Mike Fitzgerald did a real number on him in the Stockton Record. Score one for a real journalist... not like the other names I mentioned.
I just came from the Capitol press conference on the sham of a report about the supposed cost of regulation in California. Not surprisingly conservatives and business groups are touting the study, as "evidence" that we need to de-regulate California and they took great glee in perpetuating a tired myth - California is a bad place to do business. The problems with the study are numerous, as noted in previous Calitics posts . The study takes much of its data from right-wing think tanks and Forbes magazine, not exactly subjective sources. It is purposefully vague in naming specific regulations that are supposedly so burdensome to business. It doesn't take into account the myriad benefits of California consumer, labor, environmental and wage protections. And many of the arguments it does make are completely misleading.
The familiar refrain that California is a high-tax, high-wage-state that drives businesses away is simply not supported by the facts.
MYTH: California has the highest taxes in the nation
FACT : California is a high-income state with a wide range of revenue sources. Besides local and state taxes, California collects fees, assessments and other taxes. Taking into account all of those sources of revenue, California has a very moderate tax rate. The percentage of average income Californians pay in all taxes, which is a measure of tax burden, is reasonable compared to other states. Using that measure of tax burden, California ranks number 17 behind states like Alaska, Wyoming and North Dakota that have a higher tax burden per capita.
MYTH: California's high-taxes and cost of doing business is driving businesses and jobs to states with fewer regulations
FACT: California loses very few jobs from businesses leaving the state. In fact, only 11,000 jobs leave the state annually out of a total of 18 million jobs. That's only 0.06% of California's total jobs that are lost by businesses moving out of state. The biggest job creation and loss engine are businesses opening, expanding, shrinking and closing within the state due to normal business cycles-very few businesses leave the state to our neighbors.
California has lost fewer jobs than our ostensibly "business-friendly" neighboring states. California does not rank in the Top 10 of states suffering job loss from 2008-09 and three of our five neighboring states lost more jobs than California. Our low-tax neighbors of Arizona, Nevada and Oregon had over 6.5% job loss, while California only had 4%. Even notoriously low-tax, little regulation states like Florida and the Carolinas have suffered more job losses than California.
MYTH: Businesses will not come to California because of our high-taxes and high-wages
FACT: Businesses chose their locations for many different reasons including the tax burden, but also based on other criteria such as infrastructure, education and skill level of the workforce, access to intellectual and natural resources and many others. In that regard, California has an advantage because of our natural and human resources and the high concentration of research and technology centers. In addition, California workers are among the most productive with an annual average output that is 13% higher than in other states.
However, we are in danger of losing our competitive edge. Budget cuts result in crumbling roads, under-funded education systems that fail to educate the workforce, traffic-clogged highways that slow delivery and inadequate housing stock. California businesses can't be globally competitive when they don't have the infrastructure to perform. That is what will drive business from the state.
MYTH: California already taxes everything
FACT: Actually, California has many untapped sources of revenue that other states regularly tax. We could raise billions from the following immediate changes, with little impact on small businesses:
$855 million: Oil Severance Tax of 9.9% on any oil pumping from California soil or water (California is the only oil-producing state without one.)
$2 billion: Close the corporate loophole on Proposition 13 and raise the rates on assessments of corporate property.
$1.1 billion: Impose a tax on services, similar to the sales tax. California only taxes 21 of a possible 168 services that many states tax. In contrast, Washington and New Mexico tax 158 different services.
$470 million: Raise the corporate income tax by only 0.46% which barely keeps pace with the 557% net profit corporations saw from 2001-05 in California.
TOTAL: $5.725 Billion
If there's one thing we've learned from our nation's deep financial crisis it's that when a group of Republicans come together and start scheming about de-regulation, everyone, including small business, should be concerned. Very concerned.
Around 11:00 this morning some senior Yacht Party members and their acolytes will stand in front of microphones in Sacramento trumpeting a report about state labor regulations and small businesses. They can be expected to say that the real problem with the California economy is all those gosh darn regulations, and if only businesses could free themselves from the iron boot of - I don't know, the 40-hour work week, child labor, the right to have an employee saw off his fingers in a lathe without responsibility, it's a different thing every week with these people - the state could be saved.
It's worth understanding what this report that makes them go ga-ga is all about. John Myers had a sketch of it the other day.
The document, wonkishly titled Cost of State Regulations on California Small Business Study, was quietly made public late yesterday. You can read it here [...]
The summary says it all, at least in the eyes of the business community:
The study finds that the total cost of [business]regulation to the State of California is $492.994 billion which is almost five times the State's general fund budget, and almost a third of the State's gross product. The cost of regulation results in an employment loss of 3.8 million jobs which is a tenth of the State's population. Since small business constitute 99.2% of all employer businesses in California, and all of non-employer business, the regulatory cost is borne almost completely by small business. The total cost of regulation was $134,122.48 per small business in California in 2007, labor income not created or lost was $4,359.55 per small business, indirect business taxes not generated or lost were $57,260.15 per small business, and finally roughly one job lost per small business.
Basically, regulations take your wives, enslave your children, throw your ice cream on the ground, and write "loser" on your chest in sun tan lotion when you fall asleep at the beach. It's amazing how in line this study is with standard conservative tropes about onerous regulations and big government. I wonder why that is? Here's Myers.
So how do (authors Sanjay Varshney and Dennis Tootelian) reach their conclusions? The 33 page report (85 pages if you include the charts) relies heavily on Forbes Magazine and its annual report of the best -- and worst -- states in which to do business. The 2008 report ranks California #40 in the nation, and that's the relative placement the authors used for their calculations.
"Forbes data is reliable," says the study, "in that it uses credible sources of secondary data that are well recognized and respected as credible independent research in the business world."
Perhaps, but Forbes' proprietary methodology isn't entirely transparent. Its website does note the sources for its rankings: data from both the federal government and nonprofits like the Tax Foundation and the conservative-leaning Pacific Research Institute.
This "academic" study cribbed their data from a MAGAZINE profile? One owned by a movement conservative, which includes materials from wingnut welfare think tanks? And we're supposed to just let that go?
Myers goes on to note that the way Varshney and Tootelian transform the Forbes data into dollar amounts is entirely inscrutable, but designed to advance the proposition that every single state's set of regulations are harmful to business. "Even Forbes' #1 state for business friendliness, Virginia, comes out with a regulatory climate that's a net loss to the state of $4.4 billion." The study also neglects to determine which regulations harm business more or less. It's a partisan mess of a report and it should not be taken seriously. Which is why the Yacht Party has taken to it so quickly, with classy headlines like "California Businesses Waterboarded by Governmental Overregulation."
Look, labor regulations serve a particular purpose. It's true that they have a cost to business, but they also provide a significant cost savings to the individual, to the public health system, to the overall quality of life for the laborer. We have made these trade-offs over hundreds of years. The Yacht Party may think that The Jungle is a fantasy utopia, but in my experience, Californians and pretty much everybody else appreciate safe food and clean air and the minimum wage.
You can get a good sense of the intellectual honesty of a politician - and the media - by seeing if they bite at this crap sandwich of a report.
The two-thirds rule is not used merely to protect taxpayers from politicians trying to reach deeper into their pockets. It's used by special interests -- mainly big business -- to game the system; a tool handy for legislative leverage, or extortion. If you don't give us what we want, we'll withhold the votes needed for the two-thirds.
It's about buying and selling. Last Friday, at the all-night windup of this year's regular legislative session, Democrats weren't in a buying mood.
This is what happened, according to Democrats, and Republicans aren't exactly denying it: The Senate GOP blocked more than 20 bills requiring a two-thirds vote because Democrats wouldn't cave on three unrelated demands.
This has been true for years if not decades. The 2/3 rule does not protect tax increases, it's a tool for the Yacht Party to hijack the process. In this case, the GOP wanted to create a forced market for Intuit, makers of TurboTax; to increase the corporate tax breaks from the Februrary budget deal, in particular to help Chevron; and to make Roy Ashburn a lead author on a Democratic bill. See if you can find the word "tax increase" in there. But because the Democrats didn't much feel like giving out even more corporate welfare or fattening the pockets of Intuit, the Yacht Party revolted. And they knocked down 20 bills, including one that would keep domestic violence shelters open throughout the state (which is nothing more than homicide prevention) by shifting available funds, and another to allow the Treasurer more leeway to renegotiate with banks and save the state $850 million dollars.
These and the other bills, again, did not involve tax increases. They were taken up under urgency requirements (so the policy takes effect immediately) or other factors, like changes to the budget, which necessitate a 2/3 vote. And the Yacht Party routinely takes advantage of this, mainly out of spite and an attempt to leverage their votes to reward their corporate backers.
Ashburn candidly defends blocking the legislation: "This was an opportunity for Republicans to have some leverage." Concerning the merits of measures buried in the fallout: "The subject matter of bills at that point was secondary to what the [GOP] caucus had decided to do with them."
This is a pretty startling admission. But not one anybody wasn't aware of before now.
Skelton has deciphered the problem pretty clearly, and Democrats are well-positioned to highlight it and show the disaster of governance ushered in by the onerous 2/3 rules.
Somehow, Michael "Spanky" Duvall thinks that he can get away with this statement:
Assemblyman Duvall Denies Reports that He Had Affair
I want to make it clear that my decision to resign is in no way an admission that I had an affair or affairs. My offense was engaging in inappropriate story-telling and I regret my language and choice of words. The resulting media coverage was proving to be an unneeded distraction to my colleagues and I resigned in the hope that my decision would allow them to return to the business of the state.
Apparently, Duvall was spinning a tale, in a private conversation never meant to be heard by anyone but his colleague, about a man named "Michael Duvall" who just happened to be sleeping with the same woman that everyone in Sacramento has seen him palling around with for the last several months. It was a bit of magical realism, I guess.
Actually, Duvall would be legally culpable if he admitted an affair with an industry lobbyist on a committee on which he sat. So this is CYA stuff.
I'm beginning to rethink my position that a Yacht Party member is equal in value to an empty chair in the Legislature. Actually, the empty chair has significant advantages. It's a predictable non-vote, equivalent to a no vote under the 2/3 rules, and crucially, the empty chair has almost no possibility of ever saying anything this stupid. I wouldn't be surprised if the Yacht Party just decided to keep the seat vacant. Would save them a lot of trouble.
...Giving Duvall a run for his money in the stupidity department, Jeff Miller, who was sitting next to Duvall when he told these yarns, claims he didn't hear them and wasn't paying attention because Duvall is always spouting off about something. So they were tall tales told to an audience of none.
Miller had better watch his back for a primary challenge against an empty chair. Chesterfields wouldn't try to peddle the "I wasn't listening" defense.
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.
It looks like the Governor and the Legislature have resolved the issue over prison reform in the budget by setting that piece aside as a separate issue to be decided later.
Legislative leaders and Gov. Arnold Schwarzenegger defused an issue today that threatened to blow up a fragile compromise over the plan to erase the state's $26.3-billion budget deficit.
Instead, Senate President Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, said both houses would vote on the plan Thursday night - but without an element that would prescribe details of a $1.2 billion cut in spending on prisons. A vote on that part of the plan will be delayed until next month, the leaders said.
"Everything's on track," said Steinberg, after he and Bass met privately with Schwarzenegger in his office. The governor popped out after the Democratic leaders left to dismiss the issue as just one of "some hiccups, and some obstacles and bumps in the road ... there will be some difficult moments, but the bottom line is we are going to get this budget done."
I see, so a plank of the budget that involves policy changes will be put off until another time.
Gee, that doesn't seem to be the accommodation made for privatizing the welfare enrollment process. Or enacting measures like background checks and fingerprinting for IHSS clients and recipients. Or drilling at Tranquillon Ridge. Or selling the State Compensation Insurance Fund. Or the lobbyist-fueled deal to extend redevelopment projects and borrow against the funds. All of those are huge policy changes, some of them unrelated to the current budget, that reflect mainly conservative perspectives. They must be passed now, now, now, but because Republicans threw a fit and distorted the intent, a pretty modest (though necessary) prison reform part of the package, with savings of $1.2 billion dollars, gets delayed.
These dead of night budget deals and the disproportionate urgency placed on them are fruits of a poisoned, horrible broken process for determining budgets in this state. It's why everyone with a brain considers this not only a bad deal but one we'll have to revisit in a few months anyway.
And this is what we're talking about when we talk about the shame of the Democrats for giving in on virtually every part of this negotiation, without exception, and for failing to show the leadership for thirty years necessary to stand up to a broken process and actually do something about it.
In most public schools expect larger classes, fewer counselors and librarians, and a slimmer menu of arts classes and athletic programs -- and maybe a tighter array of courses generally. More subtly, the quality of all services, from graduate programs at Berkeley to the condition - and maybe the safety - of the neighborhood park will decline. Will any of those things - and there are countless more - bring the realization that you can't have a great state, or maybe even a decent one, on the cheap?
What's badly wanted here is political leadership with courageous enough to talk about that link and not celebrate surrender to the anti-tax fanatics of the right. In this current budget deal, the Democrats got a few face-savers on education funding and welfare reductions, but in the end, despite all the nervous smiles, they lost.
The New York Times today writes that a "pinch of reality" has threatened the California dream. Yet the political leadership still live in dreamworld, seemingly satisfied with the broken structure of government, confined to a short-term strategy and a political process that works for them as individuals but for none of their constituents, and just unable to operate against a minority the public hates but which runs circles around them. We have deferred that California dream for so long that it may be unable to get it back. But without a functioning democracy, and with a majority leadership that has practically abdicated responsibility in the face of a conservative veto, you can be sure of that proposition.
If you get a chance, take a listen to Warren Olney's Which Way, LA? tonight. You can find it right here.
The California portion starts about halfway in, at around 28:40.
So Warren Olney describes the craptacular deal, and then has two lawmakers on to talk about it. First up is Bonnie Lowenthal, who is positively ebullient about the prospect of selling out local governments and breaking the very fabric of the social safety net. Asked if she'll vote for the budget, she goes "I certainly am!" Olney, incredulously, lists the scope of the cuts, but she replies, "We have a deal, the stalemate is done, the IOUs will be over!" Later in the show, she enlightens us that it's better to have something than nothing, and that we saved the "framework" - not the funding, just the framework - of most programs.
Then Chuck DeVore comes on. Now DeVore is running for US Senate, and needs to be as crazy as he wants to be. So Olney asks him if he's voting for the budget. And he says he hasn't read it, but it didn't go far enough with the "reforms" and cuts to programs. (He also uses the spanking new right-wing canard that California has 12% of the population and 32% of the welfare recipients, which is only true if you count all kinds of services that other states don't consider welfare as welfare) Then Olney says that there were no new taxes in the deal, and DeVore hails that, and eventually says "this is the best compromise we could possibly get." And Olney says, "So then you'll vote for it." And DeVore says "No."
I guess DeVore didn't get handed his talking points that he's supposed to throw a hissy fit about a fake report in the LA Times regarding early release, almost certainly planted by Sam Blakeslee to give cover to Yacht Partiers who want to vote against the budget.
I don't think you could encapsulate the strategy and approach of the two parties better in a work of fiction. Lowenthal is just pleased as punch for everything to be over, DeVore knows he can get more and doesn't want any part of his own handiwork so Democrats can be blamed for the consequences. One side looks only to put out immediate fires and the other has a long game strategy playing out over decades.
It is not pleasing to be a Democrat at this juncture.
This afternoon we got the Leak of the Week from Capitol Weekly - a look at Dennis Hollingsworth's letter to his entire caucus. It's in budget-ese, but Zed is positively giddy about all the cuts to social services, all the denial of fee increases, and he's basically telling his caucus they got everything they wanted. It was good to see the inside thinking, especially if Yacht Party members turned around and voted against the budget. They know that their preferred option is deeply unpopular, and would rather distance themselves from this solution and make the Democrats own the budget. So this was a key document counteracting that.
Then at around 2:30, Michael Rothfeld changed his original process story about legislators building support for the deal into this bombshell:
The state budget deal negotiated by Gov. Arnold Schwarzenegger and legislative leaders would reduce the population of California prisons by nearly 27,000 inmates in the current fiscal year.
That would be done with a combination of new measures, including allowing some inmates to finish their sentences on home detention, creating new incentives for completion of rehabilitation programs and scaling back parole supervision for the least serious offenders.
The proposal, details of which were obtained by The Times, would save a total of $1.2 billion in the coming year.
It is unclear whether Republicans will vote for a budget plan that includes reduction of the state prison system, which now houses 170,000 inmates. Some GOP votes are needed to pass a budget in California.
If Republicans demur, the Democrats who dominate the Legislature could approve the prison proposal as separate legislation with a simple majority vote, which would not require GOP support [...]
The budget plan also would create a sentencing commission to reexamine the state penal code, which would not save money immediately but would advance plans under discussion by lawmakers for years. The commission would be charged with establishing new sentencing guidelines by July 1, 2012.
Prisons are slated for $1.2 billion in cuts in the budget, and most stories last night claimed that included no early release. Clearly Republicans - and possibly the Governor - saw those cuts as best employed by turning the prisons into Public Storage units, cutting all drug treatment and vocational training programs and reducing corrections officer overtime. So this looked to be a bait-and-switch by the Democratic legislature.
Except nobody seems to know how the LA Times got this story. And less than an hour later, Sam Blakeslee alerts the media:
Throughout budget negotiations we insisted that Republican votes would never be provided for a budget deal that included early release of prisoners.
Our caucus and staff developed a cut strategy for corrections that provided the necessary savings to close the deficit without risking public safety.
We had a clear understanding with the democrats that NO corrections bill would be a part of the budget and that we would have an honest chance to contest the policy issues in the light of day in August.
Just two hours ago I learned from staff that Senate democrats are concocting a radioactive corrections bill that includeds the worst of the worst _ sentencing commission and release of 27,000 prisoners, etc
When I spoke with Dennis he was as surprised and upset as I was regarding what appears to be a serious breach of the agreement in the Big 5.
I have called and personally told both Karen and Darrell that their will be no republican votes for any portion of the budget if they allow such a bill to be part of the package.
This seems just a little too neat to me. This report was leaked to the Times anonymously, after a separate email from the Senate GOP gets leaked showing what a great snow job they think they got over the Democrats. And then Blakeslee has an email out to his caucus - within less than an hour of the story leak - that comes up with a credible reason to shut down the deal, blaming those double-crossing Democrats.
FWIW I'd love a sentencing commission/early release of nonviolent offenders bill to become a reality, but I hardly believe that Senate Democrats, who as a caucus have participated in 30 years' worth of sentencing increases, and who scuttled a sentencing commission bill from Gloria Romero just last year, would sneak this into a budget bill out of nowhere, with complete language less than a day after a deal was reached. It would be completely out of line with prior history. It doesn't scan at all.
But it's sure a bonne chance for Republicans to have this fall in their lap...
...OK, so the Governor's Corrections Secy is briefing reporters. And will you look at that, the Times' story was wrong, as was Asm. Blakeslee! The report of 27,000 released is misleading, says the Secretary, but the Administration is interested in some reforms, including a sentencing commission. Wow, that's great, at least in theory. They are offering early release credits that would maybe release 1,700 total. This looks more and more like a coordinated hissy fit laundered through a compliant media.
You can almost set your watch by it. The state budget picture is a mess, Democrats ask for a balanced solution, Republicans hold their ground and say no, Democrats don't have the vote so they let it go. It happens practically every single year, and it's happening again, according to CapAlert:
Gov. Arnold Schwarzenegger and Senate President Pro Tem Darrell Steinberg said separately Thursday that they are optimistic a budget deal can be struck within several days.
The tone of their comments marked a stark contrast to Capitol fighting over the last few weeks between Democrats and Republicans over bridging the state's $26.3 billion budget gap.
Steinberg also said Democrats had given up any attempt to increase taxes on tobacco or establish an oil severance tax [...]
The Senate president said that Democrats no longer are pushing for a 9.9 percent tax on oil extraction or for hiking the state's tobacco tax by $1.50 per pack.
"We would like to see an increase in the tobacco tax and the oil severance tax as a solution, but in this chapter that's not realistic and it's not what we're holding out for," Steinberg said.
It's never going to be realistic in ANY CHAPTER. Republicans know exactly how to play this game. Their votes are needed for tax increases, so if they hang together they cannot lose. The Democrats haven't figured out how to shame the Yacht Party or make them pay for their votes, giving them no reason to do anything but hijack the process. You'll notice that as a result of this horrific experiment in governance, California is operating worse than practically every other state in the union.
We've seen this kind of "it's almost over" trial balloon on many occasions, so I wouldn't put on the party hats just yet. But somehow at the end of this process, somebody will step up to a microphone and claim how reaching agreement is a sign of success. No. It's a sign of failure. A failure to responsibly manage the state's finances, reflected by the worst economy in 70 years. The only lesson that can be learned from this process is that it's fundamentally broken.
Schwarzenegger and I then repaired to a tent that he had put up in a courtyard next to his office, which allows him to smoke cigars legally at work (no smoking is allowed inside the Capitol). The tent is about 15 square feet, carpeted with artificial turf and outfitted with stylish furniture, an iPod, a video-conferencing terminal, trays of almonds, a chess table, a refrigerator and a large photo of the governor. Schwarzenegger reclined deeply in his chair, lighted an eight-inch cigar and declared himself "perfectly fine," despite the fiscal debacle and personal heartsickness all around him. "Someone else might walk out of here every day depressed, but I don't walk out of here depressed," Schwarzenegger said. Whatever happens, "I will sit down in my Jacuzzi tonight," he said. "I'm going to lay back with a stogie."
This is the guy who dares to chide others for not doing their job.
So the Senate Republicans voted en masse against $11 billion in cuts as part of the budget proposal put forward by the Democrats today. Lou Correa and Leland Yee voted no as well, and the final vote was 22-16. Technically, I believe the bill could go to the Assembly, and after passage to the Governor, but Arnold has vowed a veto, so that's probably out. Meanwhile, California will start to use the reserve fund to pay bills for the next week or so, and failing a solution after that, will resort to IOUs, which basically was the deal back in February as well. Yes, the Democratic proposal has its share of gimmickry, but no more than the Governor's own plan, and considering the Yacht Party refuses to write a plan, ALL OF THEIRS is gimmickry, as is their entire ideology. But the Yacht Party smells blood in the water, the Democrats have pulled their tax proposals off the table, and the future is incredibly uncertain.
Examining the Senate's budgetary actions of June 24 from a political rather than a policy perspective, the majority party Democrats may not have achieved their objectives [...]
Judging from the remarks of Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, the intent of the exercise was to illustrate that Democrats are unwilling to cut as deeply into social programs as Gov. Arnold Schwarzenegger and to portray Republican lawmakers as obstructionist or hypocritical or both for not backing the cuts embraced by Democrats.
"Democrats are asking Republicans to vote for billions of dollars in cuts and apparently your answer today is 'no,' Steinberg said. "Why won't you cut? Why won't you cut?" [...]
In a purely political sense, the "bad" vote is the one cast by Democrats, ostensibly champions of public education, who - if the February budget they backed is included - have chosen to reduce state support of schools by more than $12 billion over a two-year period.
Republicans can portray their "no" vote as a refusal to cut nearly $5 billion more from public schools.
Perhaps a more effective illustration of support for what Democrats call the safety net would be to bring several of the GOP governor's more draconian proposals to a vote.
It seems unlikely Schwarzenegger's call to eliminate California's welfare program would garner the votes necessary for passage. Nor would the governor's proposal to end state grants to lower-income high school students to help them attend college.
After rejecting those and possibly other gubernatorial proposals then a vote on the more modest - more humane - measure with $11 billion in cuts might more satisfactorily frame the issue.
I would argue that making these "symbolic" votes doesn't do a ton of good unless you're willing to use them in the context of the 2010 campaign (and I don't remember votes coming into play in key districts in 2008) or in a coordinated and widespread media campaign immediately. To the latter point, we don't have any such media in California. It's a good argument in search of a broadcaster, and that goes for Lucas' alternative solution.
The real problem is that Democrats don't appear to have an endgame strategy, and haven't for years. The words "two-thirds majority" hasn't exited anyone's lips in quite a while. This is a process problem, and only a process solution will suffice, and teachable moments like these have been wasted for 30 years.
In the upside-down world of the California budget mess, the Senate President Pro Tem is now criticizing Republicans for their refusal to vote for cuts.
Senate Leader Darrell Steinberg wants to put Republicans on record today on two political questions: whether they can accept $11.4 billion in cuts that Democrats are proposing, and whether they will vote on $2 billion in new taxes.
On taxes, Steinberg conceded he is unlikely to win a single Republican vote when the Senate takes up the Democrats' $23.3 billion deficit reduction plan. But that, he said, shouldn't stop them from supporting his package of cuts, which will be voted on separately.
"If they're going to stand on the argument that cuts are not deep enough and thereby not vote for $11 billion in cuts, then we have some issues," Steinberg said at a news briefing next to his Capitol office. "It's interesting. I'm getting a sense that Republicans are getting shy about voting for cuts. That would be an odd headline: Democrats urging Republicans to vote for cuts."
Actually, it's not an odd headline. It's the inevitable consequence of a broken political system where you need a simple majority to make cuts and a 2/3 majority to raise taxes. Period.
In this case, Steinberg can pass the whole budget, save $2 billion in oil and cigarette taxes, by majority vote, because this is not a budget enactment, but a revision. If he doesn't muster 2/3 for the cuts, however, the revision will be delayed 90 days, reducing the effectiveness of the cuts by roughly 1/4, and forcing additional solutions to fill the deficit later. Even when mostly cuts are on the table, Republicans are using the leverage of undemocratic supermajorities to force more cuts.
Here's Zed Hollingsworth playing dumb that all he wants is a comprehensive solution.
"We're willing to vote for the cuts that provide for a complete solution," said Republican leader Dennis Hollingsworth, R-Temecula. "We're not willing to vote for a partial solution that has us coming back in the spring having to find more revenues when another calamity hits. We're not interested in political gamesmanship."
No, the Yacht Party would NEVER be interested in political gamesmanship, perish the thought. They'd never want to try to send the state into bankruptcy to make a political point or anything. By the way, Zed, news flash: you'll be back in the spring. The projections from the Legislative Analyst have consistently fallen short of reality, and no matter how big a budget reserve gets baked into this new budget, you can bet dollars to donuts it won't be enough, especially considering the potentially accelerated Depression that additional cuts to the social services net will force. The Anderson Forecast estimates 64,000 government jobs lost from this round of budget cuts. Even in Dan Walters' world, that's a significant chunk.
My problem with the Democrats on this is mainly their insistence on working within a broken system. They miss every opportunity to put the failed governmental structure on trial. Something as absurd as Republicans voting against program cuts - to ensure MORE program cuts - defies belief without an explanation of how it's a symbol for a bad process that must be fixed. The goal of this budget, which was never going to be pretty regardless of the May 19 election, should have been to heighten that reality.
California voters said no, but Democratic lawmakers are pushing to do it anyhow.
The issue involves billions of dollars and a ballot measure so important to schools that the California Teachers Association spent more than $7 million in a failed attempt to pass Proposition 1B.
One month after the initiative died, Democrats are proposing to pay schools the same $7.9 billion that was the heart of the measure and to begin payments the same year, 2011-2012.
The funding commitment is part of a massive budget-balancing plan crafted by a joint legislative conference committee and scheduled to be voted upon this week by the Senate and Assembly.
Sen. Mimi Walters, R-Laguna Niguel, said the proposal to commit $7.9 billion to schools directly contradicts the people's will.
"The voters have spoken and we need to listen," Walters said. "Unfortunately, the majority party in Sacramento isn't listening."
Would that the Republicans always listen precisely to what the voters want - say, when they put 63% majorities into both houses of the Leigslature, for example. The Republican Governor has asked for a $4.5 billion reserve at a time of economic crisis, when voters "rejected" a rainy-day fund in Prop. 1A. You can argue the economics of a reserve fund that large on the basis that the economy still has some rough patches, but you can just as easily argue that the Governor is somehow upending the voter's will.
The SacBee does offer the contextual reality of the Democrats' effort here. Before the May 19 special election, the California Federation of Teachers and associated groups sued the state for that $7.9 billion, which they feel is owed to them. The dispute comes over how mandatory Prop. 98 funding gets calculated, and the CFT feels they have a solid argument that they actually deserved more money under the law than the state provided. You can say that you don't like mandates in funding generally, but the courts will eventually decide this dispute regardless of what the legislature does. And Democrats can see the possibility - some would say probability - of CFT being able to win that lawsuit and receive payment immediately, rather than two years out (although "immediately" would probably not happen for a year or so, until the case worked its way through the courts).
Prop. 1B was essentially an attempted out-of-court settlement. That having failed, the participants are going to court. Incidentally, every subsequent budget cut adds to the money owed to schools under Prop. 98, which has ballooned to around $11 billion. So the options are: either set up a future payment schedule, hope the courts rule in a way that would break with precedent, or dismantle Prop. 98 (which wouldn't get the state off the hook for funds owed). So when Mimi Walters argues that "the people have spoken," she's saying that they've spoken on cutting school funding to dead-last in the nation, all the while not answering the still-thorny problem of a current lawsuit.
In order to save you, my dear Calitics readers, the trouble of receiving the Senate Republican Caucus Emails, I choose to receive them. Generally, they are just recaps of the day's news. But from time to time they bring out a "Briefing Report." And ooooh, just like Arnold, they are pissed about anything that doesn't have a 2/3 vote on it.
The Constitution stipulates that all political power is inherent in the people and they have the right to alter or reform government for the good of the public. If trying to force taxes on the people doesn't warrant reform, what will? Did someone just say "California Tea Party"?
Essentially through the entirety of the email, they use a frame of "California's framers". The whole concept of framers in the context of California is more than a bit ridiculous. The whole constitution has been marked up more than a high school essay. At this point there is no unifying principle to the document, and there aren't any people you can point to as having a clear understanding of the meaning of the document.
For example, they point to Article 4, section 12d. That was amended by Prop 13, and further amended since that time. Yet, that doesn't stop them from arguing that somehow California's framers are rolling over in their graves:
When our state founding fathers drafted the California Constitution, they envisioned a document that would achieve balance between the people's freedom and rights, and government's role in protecting those rights. After the Preamble and Article I's declaration of the people's rights, Article II opens by stipulating that:
"All political power is inherent in the people. Government is instituted for their protection, security, and benefit, and they have the right to alter or reform it when the public good may require."
To that end, the Constitution deliberately limits government's ability to spend the people's money and increase the people's taxes.
Just to be clear, many of the framers of Sec 12d are not only still alive, but they are still active in state politics. This isn't some grand constitutional principle, this is current day politics. Current day politics that is broken and nearly devoid of principle.
The Senate Republican Caucus, much like the tea party extremists who displayed images of Hitler/Obama mashups, give a vague odor of rebellion with words like "did anybody say tea party?" They continue to reject the will of a fairly sizeable majority of the state. A majority of the state that desires a functioning state government. And then they have the temerity to decry the building of a working coalition to move something, anything through the state?
The best part of all this? They go after state constitutional proposals sitting in the Senate, that they know for damn sure will never go anywhere. Just to place them on the ballot, the Legislature needs to get 2/3 agreement. It is sheer madness to not allow the majority place an amendment on the ballot, when you can just do it for a million bucks outside the local safeway or wal-mart. And what are these crrrraaaazzzzy proposals? Oh, well, a restoration of majority rule (SCA 5, Hancock and SCA 9, Ducheny), a parcel tax system approved in an education district requiring a "mere" 55 approval (SCA 6 - Simitian), and local taxation at 55% supermajority (SCA 12-Kehoe). Man, those are really crazy, watch out, you just might find that the people can decide for themselves, rather than depending on an isolated minority to agree to something.
The initiative system is broken down, our constitution has no guiding principles because it is like a crowd sourced project gone awry. We need to Repair California.
AB 286, authored by Assembly member Salas, is a fairly simple renewal of a program that already exists. Under current law, counties are allowed to decide whether they want to impose a $1 for personal/$2 for commercial vehicles in order to fund an anti-car theft program.
This isn't some grand new program, it is simply a reauthorization of an existing program, but no, that dollar is very meaningful!
In a sign of bigger budget clashes to come, legislation to extend the life of a local $1 per year car registration fee to combat auto theft ran into fierce opposition from Republicans Wednesday. ... The 45-25 vote sends the measure to the Senate.
* * *
But Republicans called the fee an "end run" around laws that require voter support for new taxes. They said public safety programs should get first call on budgets and not have to rely on additional fees. ...
Assemblyman Kevin Jeffries, R-Lake Elsinore, said if the state had its priorities in order "we wouldn't be arguing about .. a dollar." (SD U-T 6/4/09)
My first point would be that this clearly not a NEW fee. It is an old fee. How exactly is renewing an already existing fee imposing "a new tax." The sheer logic gap is mind boggling.
The Republicans are now so single minded that they are arguing over a single dollar fee for a public safety program Republicans would ordinarily support. It is a program with strong accountability measures that has shown to be successful, but the Republicans are dragging it into a broader fight about the budget system.
Now, I won't argue that we shouldn't be funding the government this way, but when it comes down to it, there are no other options. Prop 13 and the supermajority rules have brought us to this point. There is no more room to cut, and now we are left playing shell games. And even after the Republicans have succeeded in making governing California impossible, they won't even play by their own rules.
(crossposted from Orange County Progressive for those who wonder what the Yacht Party members do when they're not just voting "NO")
Oh my gawd!
Did you know that when the St. Margaret's Episcopal School,the private school that State Senator Mimi Walters daughters attend, has a big fund-raiser at a tony restaurant, where the Governor comes, and there's one of those 18% mandatory service charges instead of being able to figure out your own tip, did you know that the state charges you tax on the tip?
How unfair is that?
Your friendly yacht party representative knows we need to have a law to fix this.
Can you believe that a legislative initiative as important as this was "Placed on REV. & TAX. suspense file"?
And that's not the only huge problem in the tax code that Mimi's trying to fix. Did you know that when you buy new car, and you have a trade-in, you pay taxes on the entire cost of the new car.
Mimi has two bills to revive our moribund economy by giving you a break on the tax on your trade-in, and giving you an exemption on the car tax for the first year.
You just know you were going to head on down to Fletcher Jones, but you didn't want to pay that tax on your trade-in or pay that new higher Vehicle License Fee.
Your modern Yacht Party at work. A Roadmap to Recovery, one tax cut at a time.
The Yacht Party's public relations staff scored a coup by getting one of their press releases into print about those mean, nasty legislators spending all our tax dollars. Now, it turns out that some of the cost-cutting measures put forward by these Republicans have a bit of merit. But it's all a matter of scale. These measures would produce savings in the millions of dollars, which is a lot to the individual blogger who really welcomes your donations (hint, hint), but not so much to a nation-state of 38 million. However, missing from the litany in this article is any measure that would actually put a dent in the budget crisis, like a broader-based sales tax that captures what people consume. AB178, which was also squashed this week, could have added anything from $2 billion-$5 billion to the General Fund. In other words, it would take more than 1,000 bills of the likes of Jeff Denham's AB44, to abolish the Integrated Waste Management Board, to have the impact of Nancy Skinner's AB178. But million and billion sound alike, so the Waste Management Board bill gets in the paper, while the squashing of the bill that would raise almost as much as Prop. 1C all by itself gets... nothing.
More of the essentially conservative slant of the media.
By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks - both programs of the New Deal - as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections [...]
Wanniski decided to turn the classical world of economics - which had operated on this simple demand-driven equation for seven thousand years - on its head. In 1974 he invented a new phrase - "supply side economics" - and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.
At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!
Neither concept made any sense - and time has proven both to be colossal idiocies - but together they offered the Republican Party a way out of the wilderness [...]
Democrats, (Wanniski) said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too - spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token - a few hundred dollars a year on average - but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.
There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.
In the intervening 35 years, we have had no progressive leader in California, no Democratic leader, challenge that ridiculous theory in any meaningful way. Instead, over and over again, Democrats must lead the charge killing off the two Santa Clauses, filling budget deficits by raising taxes or cutting spending, frequently the latter. And while other factors have contributed to Democratic dominance in recent years, the ideological theories of Santa Claus conservatism remain. And Democrats and Republicans alike have ingrained them into their lizard brains, either by believing in them, or believing that everyone else believes in them and there's no way to change that.
In truth, public opinion, particularly in such a low-information state like California, is quite malleable. But nobody has bothered to discredit the Two Santa Claus theory, the idea that we can have all the services we need and the lowest taxes possible. Of course, the insidious dynamic of the two-thirds rule, putting Democrats both nominally in power but subject to a conservative veto, has made a Democratic message impossible, so constrained it is by the straitjacket of an ungovernable system.
Now, the out for the believers in two Santa Clauses is that government can just do more with the money they have, through better efficiency. Nobody would argue that government is perfectly efficient - I don't see anyone leaping to defend spending $580,000 on unused office space - but the savings from that efficiency exist on the margins, and would do little to really impact our woefully low per capita state spending on areas like K-12 education. So we get bullshitty ideas like cutting lawmaker pay (the Governor jumped all over that one), or trashing the state's Waste Management Board, which has become a waystation for termed-out legislators to pull in a nice salary. These "efficiency" maneuvers would do absolutely nothing relative to the budget deficit. And the areas that would make a dent, like a broader-based sales tax that catches everything we consume, if off-limits because of special interest lobbying:
The declining "yield" of the state's sales tax is one cause of California's ongoing budget deficits. Since 1960, the revenue raised by each one percent state sales tax rate has fallen by about one-third. The reasons for the decline are two-fold. First, consumers now spend a larger share of their incomes on services, which are largely untaxed, rather than goods, which are subject to the state's sales tax. The second reason is the rise of internet sales, including purchases from out-of-state retailers, that don't collect the tax on sales made to California consumers. Estimates suggest that California loses $2 billion to $5 billion per year from untaxed internet sales - enough to make a significant and lasting dent in the state's chronic budget woes.
In light of this fact, one might think that a bill that attempts to narrow a loophole that provides preferential treatment for businesses located entirely outside of California would be a "no brainer." Unfortunately, this appears not to be the case. Assemblymember Nancy Skinner's AB 178 is similar to a recently enacted New York law, would require businesses such as Amazon.com that enter into "affiliate" relationships with California-based entities to collect California sales tax.
At a time when California faces significant budget shortfalls and California retailers face declining sales, you'd think a bill that makes it possible for the state to actually collect taxes that are legally owed and that limits an incentive for Californians to buy from businesses that don't employ a single Californian would be greeted with open arms. Unfortunately, opposition from tech industry lobbyists has left the measure's future in question.
Ultimately, we have a serious problem. Our citizens get almost no public policy information from media, our state capitol is too often run by corporate interests, our Democratic leadership cowers from advocacy to disabuse citizens of false notions, and our Yacht Party is completely crazy. This is not insurmountable but requires leadership. We elected a President by 61% of the vote in California who was derided as a socialist. Attitudes can be changed. But someone has to stand up and speak.
In a last-ditch and ultimately futile attempt to get the Republicans to support the May 19 ballot measures, Yacht Party leader in the Assembly Mike Villines played the majority vote card.
One fear of GOP lawmakers surrounding the May 19 special election is that should the ballot measures fail, Democrats and Gov. Arnold Schwarzenegger could go around them and simply swap certain taxes for fees and raise revenues without their votes [...]
"I know it's counterintuitive, but by coming to the table and negotiating, we saved the two-thirds protection," Villines said as the California Republican Party opposed the measures. "Mark my word, I believe that if these initiatives don't go through, you will see a majority-vote budget, you will see it signed and you will see the defense of taxpayers in this state disappear."
Mike, you say that like majority rule is a bad thing.
Unfortunately I don't share the optimism of Asm. Villines about the backbone of the Democratic Party to go ahead and fill the budget gap with a work-around fee increase. I had the opportunity to share the stage with a couple members of the legislature this weekend to debate the special election, and in particular, Senate Majority Leader Dean Florez seemed especially pessimistic on the majority vote option. He basically said that the lawyers advising the legislature questions the legality of the effort and that if the ballot measures fail, "we will have a cuts-only budget." He even went so far as to identify particular cuts that have already been discussed, all affecting the usual suspects - the elderly, the blind, the IHSS patients, kids without health care, CalWorks members, etc. So that's the May 20th strategy that the legislature is teeing up.
Now, maybe it's easier to ramp up the fear by playing up this disaster scenario in the event of the failure of the ballot measures. But I definitely expressed disappointment that the Majority Leader was foreclosing on an option which the nonpartisan Legislative Counsel found perfectly legal. I see no need to shut down creative solutions to the budget problem, especially when they can offer a glimpse into how a working government can function in a post-two-thirds environment. Even moderates and conservatives understand that the Yacht Party has hijacked the state and irresponsibly used their chokehold on legislative rules to force failed solutions and drive California into a fiscal ditch. The point is that this is coming, or at least it ought to be, whether by a work-around or ballot initiative, and we can end this hostage situation that Republicans have forced upon us for the last thirty years. To their credit, everyone in the legislature that I've talked to wants to move forward on repealing two-thirds.
Sen. Florez and I had a lot else to discuss in our debate (including his admission that "if you want to vote No on 1F, go ahead," which was a bit off the reservation), including the continued debate over the state spending cap, Prop. 1A (or a spending constraint, if you prefer, but certainly not anything like the inoffensive tweak that supporters make it out to be). In the end, the West Los Angeles Democratic Club took no position on anything but No on 1E, and PDA, where I also spoke this weekend, voted NO on all the ballot measures.
