This is a submission to Calitics from LA City Council member Janice Hahn.
By: Janice Hahn, L.A. City Councilwoman
You know that old saying, "Robbing Peter to pay Paul"? That's what State government has been doing for years, and the Peter in this case is local government. To balance the state budget, the governor and Legislature regularly borrow, raid or otherwise redirect billions meant to be used by cities and counties.
A coalition of local elected officials, labor leaders, public transit advocates, transportation advocates and others recently began collecting signatures to qualify the "Local Taxpayer, Public Safety and Transportation Protection Act" for the November 2010 ballot. This measure will close the loopholes and prevent the State from ripping off local revenues -- including gas taxes we pay at the pump that should go to public transit and badly needed transportation improvements.
Gavin Newsom's Channel 5 interview last week revealed a Mayor defensive about his recent behavior, and it suggested he will lash out against critics by making vindictive budget moves. It's only November, but Newsom has already ordered every Department Head to propose 30% in cuts - alarming those who rely on City contracts to provide front-line services to the poor. At the same time, the Mayor and his spokesman both said they will avoid touching the Police and Fire Departments - neither of whom got cut this year, while Health and Human Services were slashed. Rather than react to another round of cuts, now is the time for progressives to step up and offer their solutions to a very real budget crisis. With Newsom not running for Governor, why does he still need five press secretaries - or his "pet projects"? And if the Mayor is really thinking about quitting politics (as the Wall Street Journal implied), why is he still sucking up to the Police and Firefighters Union - or the real estate lobby by pushing a dangerous proposal that will lead to mass evictions?
• CapAlert reports that Karen Bass will try again to get some of the more spineless members of her caucus to support a prison reform bill better than the scaled-back effort it already passed. Bass talked about adding the "alternative custody" provisions into the bill, which would get it to the proper level of cuts, but not the sentencing commission, which still looks dead, sadly.
• One bill we know to be dead is SB88, which would have forced localities to get permission from the state before going into bankruptcy. This was a union-backed bill to protect their local contracts, but city governments balked. Sen. Mark DeSaulnier says he'll try to broker a compromise for next year. Those bankruptcies are probably right down the pike, so he'd better hurry.
• The bill that the Governor arrogantly vetoed earlier in the week, in a hissy fit because he wasn't getting his way on water or prisons, was a bill to initiate a Vietnam Veteran's memorial day. It was authored by Republican Assemblyman Paul Cook, and he's whipping support to undergo the first legislative veto override in Sacramento in about 30 years, which is truly a sad legacy. Only in California could securing an override on an uncontroversial bill be something that could end a political career, as Cook acknowledged today. An override would be at least a sign of life in the Legislature.
UPDATE: And that's going to fizzle, because the Yacht Party in the Senate won't go along with an override. What point is there having the law on the books? Paul Cook is going to us a gut-and-amend to put the same bill up tonight, anyway.
• A lot of rumbling about the water bill, which is being written completely in secrecy, and without the input of politicians who represent the Sacramento Delta. Bass hinted at a bond issue to finance whatever comes out of conference, which would cost $600 $800 million in debt service annually without any consequent gains in revenue to pay for it.
UPDATE: The Fresno Bee has more. The bond issue seems to be the sticking point.
Could be another long night...
UPDATE: Here's some actual good news. SB13, the bill to fund $16.3 million for domestic violence shelters by shifting some budget accounts, passed the Assembly on a bipartisan vote of 63-1. I wrote yesterday about how the loss of this funding was simply devastating and indeed, a death warrant, to domestic violence victims across the state. It moves to the Senate for concurrence.
There's lots of significant news in the Legislature's last week regarding various bills, and it's extremely difficult to keep up with it all, probably by design. I should point out that, while the legislative calendar has an end date, there's no actual reason for some of the forced bottlenecks that result in hundreds of bills being passed at the last minute. It creates a shroud of secrecy in which special interests rule, and saps the public trust. A Democratic leadership actually interested in positioning government as somewhat decent would remove these forced bottlenecks from the internal legislative rules and allow bills to be approved on a rolling basis. That said, this is the system we have now, and here's a bunch of news about various bills:
• A new bill would exempt non-General Fund workers from furloughs. This would reverse one of the dumbest provisions in the budget bill, the practice of forcing furloughs on workers not paid by state government, saving almost no money and depriving people of needed services. Of course, the Governor will probably veto this one, because he hates admitting how wrong he is.
• Democrats on that vaunted water committee have decided against floating a bond to pay for any restoration or overhaul of the Delta. This means Republicans won't vote for it, and very little will come of this very important committee thrown together at the last minute. Some conference committee reports are here, but a deal looks remote, as it would need votes from some of the empty chairs in the Yacht Party.
• One bill that has cleared both chambers would set up "Education Finance Districts", "in which three or more contiguous school districts can band together to try to increase local taxes." This is a small step to make it easier for districts to pass parcel taxes to fund schools, but at this point every little bit helps. The 2/3 rule for approving such taxes would remain.
• With all the talk of health care reform, it's notable that an anti-rescission bill has once again passed the legislature. The bill would also simplify insurance forms. Last session, Arnold Schwarzenegger vetoed it. There's something you don't hear much about from the Democratic leadership - Arnold Schwarzenegger vetoed a bill that would have banned insurance companies from dropping patients after they get sick. He sided with the forces of insurer-assisted suicide. This is your modern Yacht Party on this issue:
"Any of those who have read the various exposés in the Los Angeles Times and others . . . is aware that health insurers have admitted and acknowledged they engaged in a form of post-claims underwriting," said Sen. Mark Wyland (R-Escondido). "It is unethical and, considering what some of these people have endured, it really borders on the immoral."
However, Wyland said he would not vote for the bill because the Department of Insurance has proposed new rules to solve the problem, and he wants to see how they work.
Hey, give 'em a chance to see if the immorality stops! If not, we can think it over.
• The Legislature may extend a homebuyer's tax credit passed in a previous budget agreement that was nothing but a bailout for developers. It only credited new construction, and was structured only to benefit high-income households who could afford new construction. By the way, sales of new units have fell since this was enacted, so it's not even meeting its intended purpose. But it's a giveaway to a special interest, so off the money may go, even though we cannot afford it at this time.
• A bill to ban bisphenol A (BPA) from children's products was delayed after the Assembly couldn't muster 41 votes. The debate in the Assembly last night was pretty fierce.
• Cities and counties reacted angrily to a proposed bill to slow local government bankruptcies until vetted by the California Debt and Investment Advisory Commission. On the merits this looks to be a bill that would install more control on locals from Sacramento, although there are arguments on both sides. But mainly it's about the fate of union contracts in local bankruptcies, I don't think either side would deny that.
• A roundup of other bills passed yesterday can be found here.
Before you sign on to the theory that California just spends too much and cannot afford the generous services it used to provide, take a look at this excellent work from OC Progressive. These kinds of fiscally maddening deals are a dime a dozen in the failed Schwarzenegger era, because he refused to talk straight with Californians and make them understand that ponying up at the beginning would save tens of billions in the long run.
When the state decided to borrow 1.935 billion from local governments, the local governments were pretty damn skeptical that the state would have the money to pay them back in four years. So the legislature passed a bill, ABX4 15, that authorized bonds with the state's highest rating, and agreed to pay the fees and interest to issue the bonds so the cities and counties wouldn't have to try to borrow the money individually.
I was sure I misheard the terms when Noreen Evans was introducing the bill to securitize the borrowing from local government. It just couldn't be possible that the state was authorizing 340 million in issuance fees on 1.935 billion in four year bonds and authorizing up to 8% in interest.
That would be almost a billion dollars in interest to borrow 1.9 billion for four years. That's just batshit crazy.
Holy Shit. I heard right, and I calculated it right.
Those are rates that would make a loan shark blush. And it's not the first time. You can go back further, but reducing the vehicle license fee in 2003 (remember Arnold's campaign events where he would smash up a car) led to an orgy of borrowing, with interest payments piling up on the back end. Over time, as credit becomes harder and harder to access and people become less and less trusting of the state's fiscal structure, they have to design elaborate deals like this that just give away billions at a time for no reason. Servicing debt is the fastest-growing segment of the budget, along with prisons.
And these stupid schemes get forced on the public by a process where radical "go into debt and spend" conservatives hold a minority veto over sensible revenue solutions. We handed out two billion a year in corporate tax breaks in February, the repeal of which would have negated the need for this local government borrowing which costs an extra billion dollars on top. The Yacht Party and the Governor refuse to be honest with the public, and tell them "we're saving your money" while wasting a billion dollars in interest without blinking. This is why we desperately need reform and the restoration of representative democracy where the legislature can reflect the will of the people.
So the Assembly is wrapping up their budget session, and it turns out that the Assembly came up $1.1 billion dollars short of the Senate's solutions. Oil drilling failed, and the local government raid on HUTA (gas taxes) failed as well.
So where does that leave us? These bills will go to the governor, and since there isn't concurrence, it will be roughly a $23 billion solution rather than $24 billion. But, the Governor has a line-item veto. He can make various cuts with his blue pencil. But $1.1 billion? Who knows. That seems like a tall order.
Considering what Schwarzenegger did the last time a partial solution was handed to him, I guess there's an outside shot that he'll just say no and open a new extraordinary session. But he'll probably just line-item some, and maybe make up the difference by eating into what is now a $900 million dollar budget reserve.
Is everybody ready to be back here in October?
...We'll have a couple days for final analyses, but let's remember that this is a terrible budget and a dark day for California.
...Let me clarify. The Governor can make line-item cuts but he doesn't necessarily have to, because this is a budget revision. He can also shift around the size of the reserve. In the end, he doesn't actually have to be in balance for a revision; that's a Constitutional need at the beginning of the process, as I understand it, not now. Clearly from the Governor's remarks, he's not going to veto the whole thing, so this is the "solution," for now. There also may be Constitutional problems with some of the stuff passed.
...Apparently, the Governor said, jubilantly, "We missed the iceberg". First, WE didn't miss anything, YOU dumped the iceberg on poor people. And second, if you really think you're in the clear, um, don't look behind you.
The current budget compromise's "borrowing" of money from state and local governments could trigger a wave of municipal bankruptcies. There is no provision for states going bankrupt. Inasmuch as states are sovereign entities under our federal system, and protected from suit by sovereign immunity and the Eleventh Amendment, states can simply refuse to pay. However, such a move would certainly trigger a crash in the state's credit rating and might permanently hamper the state's ability to borrow money. Just like some banana republic, California would require an IMF-style bailout. That may yet occur, but what is happening now will likely trigger municipal bankruptcies across the state.
Maybe you've been following along, but if you haven't, the Senate essentially passed all of their budget bills, albeit with difficulty, and adjourned a session that started last night around 7:30pm at 6:16 this morning. The Assembly is still working through some of the final trailer bills, including the local government raids and the offshore drilling proposal at Tranquillon Ridge. Here's an incomplete roundup from the LA Times.
The worst elements of the bill were passed while everyone was asleep. They must be very proud of their work.
And of course, this is a rolling, perpetual crisis. Dan Walters is correct today when he says that the state now operates on 5-month budget cycles.
There have been some discussions about shifting to a two-year budget cycle to ease the one-year cycle's tight - and usually unmet - timetable. In reality, though, the state has shifted to a five-month cycle, with the latest version of the budget, which was undergoing the dreary drill of adoption Thursday night, being the latest example [...]
If the five-month cycle holds true, the deal's deficiencies will be acknowledged in October, when the state must redeem the IOUs it's sending to creditors. And then legislators will return to Sacramento to be entertained by lobbyists, plug the new holes and collect about $1,200 a week in tax-free per diem checks.
In January, the governor will propose a 2010-11 budget and the game will begin again.
It's as much that the legislature cannot fathom the extremity of the real budget problems as that the cumulative effect of kicking the can becomes greater with every kick. Of course, there's a way out - you could reduce useless tax breaks to corporations and increase revenue. But that's deeply unserious and verboten.
If ever the need for a Constitutional convention to fix the broken system in Sacramento has become clear, it's now, when 40 years of progress has been reversed in the dead of night.
I interviewed Sen. Mark DeSaulnier just a few minutes ago for a series on CA-10 candidates. But I took the opportunity to ask him about the budget deal. Un unusually blunt and what I would characterize as irate language, DeSaulnier blasted the budget and the process that created it. "It's all awful," he said. "On a majority-vote level, with votes that require a majority vote, California still leads the nation. But on a fiscal level, we're living in the Dark Ages. The system is completely dysfunctional and maybe the only good thing is that people will finally see the kind of change we need. Sadly, too many people are still in denial about that change. But we can't go on like this. It's just a mess."
DeSaulnier thinks that the economy is unlikely to change dramatically to bail out this budget, and it will take a long time for General Fund revenues to get to a point to pay off the money borrowed from education. And so we'll remain in this dark place for some time.
The Senator is carrying a bill in the legislature to put together a Constitutional convention, and he is "more convinced than ever" about the need for it. He believes that, after the budget is put the bed, there is an urgent need, recognized by the leadership, to turn completely to reform. Sen. Steinberg has said to him that the message will be nothing but change, change, change. And the caucus wants to work, whether through a revision commission or reforms that could be put together with majority support, to do a "Constitutional convention in the building." Unfortunately, DeSaulnier said, everyone on both sides of the aisle immediately goes to the worst-case scenario of a convention, thinking that their gains and protections will be lost. But that's no excuse. DeSaulnier hoped he could get with Republican leaders like Sam Blakeslee to find common ground on a few reform issues, but he's not sanguine about those choices. "They're individually good people, but put them together and they're a cult, not a party. Milton Friedman's dead, move on."
When I asked what he would vote for on Thursday, he said "I will probably vote against most of it." DeSaulnier singled out two pieces that could not get his support: the offshore drilling in Tranquillon Ridge, and the raid on local governments. On the drilling, he doesn't understand why Democrats would approve such a proposal for a paltry $100 million dollars in this budget year. "I don't know why the Governor would do that. Whatever environmental record he claims to have will go down the tubes. I never thought he was particularly green to begin with, he tried to slow-walk AB32 and all sorts of environmental initiatives. He's the worst Governor in state history, just like George W. Bush was the worst President in history.
On the local government raid, DeSaulnier said that as someone who came from local government, he could not see clear to essentially bankrupt them. Those takings don't take place until December, according to him, so he would rather get the LAO involved, score the kinds of tax credits at the local level, things like enterprise zones that don't work and other giveaways to corporate interests, and suspend them to make local government whole. I think it's an interesting strategy, though I don't know if it could succeed. Tying it to local government needs is smart.
And by the way, the crazy redevelopment money scheme, to borrow against those future funds and securitize 10% of property taxes for 10-20 years? DeSaulnier called that "insane" and "illegal," and just a shadow play by Republicans "so they can go back to San Diego and Riverside and say they tried to save their local money and failed."
DeSaulnier has an election coming up, and thus an incentive to take a bold stand. But this is pretty darn bold. And if there are enough Democrats to go along with him, Republicans may indeed be forced to own this budget.
Robert Cruickshank pretty well covers the disaster that will be the upcoming budget "deal" between legislative Democrats and Arnold Schwarzenegger. By the way, this is BEFORE the Yacht Party tries to enact a few more goodies for the privilege of letting Democrats vote for $26 billion in cuts, gimmicks and raids on local government. We'll see a big sigh of relief from lawmakers over the next few days that will be wholly unwarranted.
Particularly galling is the targeting of city and county budgets to cover the state gap. By siphoning off almost $1 billion in gas tax funds slated for cities and counties, not one pothole in California will get filled this year. With the loss of $1.7 billion in redevlopment funds, not one project like affordable housing will get initiated. And by taking $1.3 billion in local property taxes, lots of city and county employees, particularly in public safety, will end up out of work. It's really robbery on a pretty grand scale, and it will offset any economic recovery through stimulus funding throughout the state.
One of the major consequences of this cuts-only budget will be, paradoxically, higher costs for individuals and the state. When you eliminate or severely restrict social services programs, those individuals who rely on them will have to go elsewhere for those services. The alternatives are more expensive for everyone.
Irene Steinlage has trouble walking, getting dressed, making her bed, taking a bath. She has stayed in her Folsom home with the help of a health aide, one that Gov. Arnold Schwarzenegger says the state can no longer afford.
The governor's plan to take away such care is meant to save money. But it could end up costing California more by forcing the 85-year-old, who has Parkinson's, osteoporosis and other ailments -- and thousands like her -- into nursing homes.
"I couldn't possibly afford a nursing home," Steinlage said. So the state could be saddled with a Medi-Cal tab that is triple the cost of her home care worker, who receives $10.40 an hour five days a week [...]
Others say the experience of governments that have closed gaping deficits with deep program cuts suggests that the price of doing so is hefty.
"It's pay now or pay later," said Nicholas Freudenberg, who co-wrote a study of the long-term effects of service reductions made in the aftermath of New York City's fiscal crisis of 1975.
His 2006 study, published in the American Journal of Public Health, found that less than $10 billion in cuts to healthcare, education and law enforcement in New York City over four years led to at least $54 billion in additional costs over a 20-year period, using 2004 dollars and adjusted for inflation. Consequences included higher rates of HIV, a worsened tuberculosis epidemic and a spike in homicides.
"Those potential epidemics that are being seeded by Gov. Schwarzenegger's cuts will not come in his term or the terms of people who are making these decisions," Freudenberg said. "It will be several years down the line."
The sick thing is that the Governor, and maybe even some in the Yacht Party, know this. The consequences of program cuts are easily seen. Eliminating the Poison Control System, for example, means that people calling the emergency number (many of whom don't need to see a doctor based on poison accidentally swallowed) will instead go to the ER, and many of those visits will be from people on Medi-Cal, leading to higher costs. Cutting adult day care will send many into nursing homes, at a higher cost to the state. Losing Cal Works welfare funding will send children into foster care, at a higher cost. Cutting the meager drug treatment and vocational training in prisons almost assures an even higher recidivism rate, at a higher cost.
This is not a difficult calculation to make. We fund social services programs not only because we have an obligation in a developed society not to see people dying on the street, but because we can create programs that get people back to self-sufficiency at a lower overall cost. There is only one reason not to fund such programs - because an arrogant and entitled right wing refuses to fund these government obligations in the short term, preferring apparently to pay more in the long term. There has been enough money in the last few budgets to produce massive corporate tax cuts, but not enough to get someone with a chemical dependency the treatment he or she needs. There's been enough money to protect California's unique status as the only oil-producing state not to charge corporations for taking our natural resources out of the ground, but not enough to provide long-term care services that relieve the burden of nursing home funding over the long term. There's enough money to keep in place useless enterprise zones that create nothing but tax giveaways, but not enough to keep the state from becoming the first in the nation to put poor kids on a waiting list for affordable health insurance.
We hear about the "generous social services programs" in California that simply had to be cut, but they've been reduced to the point where they are almost unanimously the worst in the nation. That depresses the business climate, that moves bodies out of the state, that alienates the public. And Arnold Schwarzenegger knows this, and he did it anyway, to keep a promise to what little of his base he has left.
Ultimately, this system isn't designed to produce good budgets. Without a media that cares, no amount of activism or public pressure can be brought to bear on a shameless and unaccountable minority. If you need proof of the need for a complete rethinking of how to structure government in California in the 21st century, look at the last seven months.
There was a lot of excitement in the IAM (Int'l Assoc. of Machinists) union hall this morning in Huntington Beach, where DFA's Jim Dean and a host of local officials testified to the worthiness and strength of Debbie Cook, the Democratic candidate in CA-46, seeking to retire certified nutjob Dana Rohrabacher in Congress. But the best reaction was for the candidate herself, who gave a straight-shooting, no B.S. speech that made clear the stakes in this election.
"Do-Nothing Dana has been in Congress for 20 years and hasn't done a thing," Cook, the mayor of Huntington Beach, said to a pancake breakfast of around 120 volunteers who were ready to precinct walk for her. Referring to a claim from the campaign's latest ad, that Rohrabacher has sponsored a bill to protect the country from an asteroid, she said, "he needs to worry less about asteroids and more about planet Earth."
Cook has really matured as a speaker. She is great on her core issues - energy, the environment, and health care reform - but she's also endorsed the Responsible Plan to End the War in Iraq, and really foregrounds smart growth and development issues. State and local governments are so stressed by this financial crisis that it's incumbent upon us to send lawmakers to Washington who understand local concerns. I've heard again and again from local lawmakers in that district - and again today from Katrina Foley, running for re-election to City Council in Costa Mesa - that Rohrabacher is openly dismissive of any federal help for local governments, and refuses to work with his counterparts. At this point that's downright dangerous, creating choke points that will gut basic services and the smart policies we need - in mass transit, for example - to weather this economic downturn and create a 21st-century infrastructure.
You'll notice that Foley, the Costa Mesa city councilwoman, is a Democrat. Gus Ayer, the mayor of Fountain Valley, a Democrat. Debbie Cook, the mayor of Huntington Beach, Democrat. Orange County is changing, and those who ignore this reality and rest on their laurels, like Dana Rohrabacher, will live to regret it. "This is the first time he's had to get off his lazy a$% and campaign," she said. And he was slow to do it. He only spent $38,000 in the third quarter, but once internal Republican polls have shown the race to be a dead heat, he has swamped the district with money. He's got 4 positive ads on the air and a bunch of negative mailers attacking Debbie as an "extreme liberal" on various issues. If it's liberal to advocate for quality and affordable health care for all, as she has done in earning the endorsement of the California Nurses Association, because to ignore the crisis welcomes a "fiscal nightmare" that risks blowing a hole in the federal budget for good, so be it. If it's liberal to recognize that our current carbon-based economy is unsustainable, and that we must encourage policies and practices that move us off fossil fuels, there you are. If it's liberal to understand that smart density with mass transit can improve quality of life, the environment and the economy, well OK then.
The best part of the speech was when Cook talked about all the support she was getting throughout the district, and she mentioned that some people gave her their economic stimulus checks from the government. "To stimulate what? Buying more crap from China?" While a new stimulus is needed, rather than handing out money as a band-aid we need to direct that spending into something useful, something that will create jobs and get the economy moving again. We need to make things again in America.
After the speeches, the volunteers were sent out to walk precincts. CA-46 is a very long and narrow district that hugs the coast from Long Beach and the Palos Verdes Peninsula in L.A. County down to Costa Mesa in Orange County. Putting those blue areas up north into the district to neutralize their power is a big mistake in this wave election. As the Cook campaign finds new voters everywhere, turning out folks in Long Beach is part of the strategy. So I walked part of a precinct in Long Beach and got a very good response. Rohrabacher simply does not have a good reputation among anyone but the wingnuts, and his record on Social Security (pro-privatization), the military (voted against improving veteran's health care) and the environment (he's a global warming denier) is quite extreme. (There's also the dressing up in drag to solve the RFK murder and about a thousand other lunatic stories) I talked to people today who said "We're Republicans, but we don't like Dana." Very few people turned me away.
Cook's volunteer base is the edge in this election. But she also needs some financial help. The campaign estimates that they need $75,000 to meet their budget and get the last few targeted mailers into the field. Debbie is a Blue America candidate and a Better Democrat. You can donate to her on ActBlue. Please do - we have a real chance here. I'm hoping to get Debbie on Calitics Radio next week.
And if you're in the district, consider volunteering by visiting their website.
Legislative leaders are drafting a complicated scheme to help close the state's massive deficit by raiding funds voters have set aside for transportation and local government services, Gov. Arnold Schwarzenegger said Thursday, adding that it probably would force a state sales tax hike....
The legislative plan would balance the state budget with the help of $1.1 billion voters set aside for transportation projects and at least $1.4 billion earmarked for local governments under Proposition 1A, which was approved in 2004, Schwarzenegger said. State law requires that the money be paid back -- at a steep interest rate -- in three years.
To say this would be a bad idea is an understatement, and not only because it relies on a very bad form of borrowing to balance the budget. No, it is flawed because it would make the state's economy much worse. This plan is being floated to stave off a cash crisis in August, but is that crisis worse than cutting buses and trains from mass transit? At a time when Californians are flocking to transit to avoid gas prices we need to be increasing service, not cutting it and thereby turning away from a crucial opportunity to shift our state in a more sustainable direction. And of course public transit cuts will worsen the strain on working families.
The impact on local government is even more damaging. By raiding their funds there will be mass layoffs in cities across the state - libraries, street maintenance, permit approvals. Firefighting would also be hit, as during the last budget crisis when many cities balanced their budgets by cutting back on fire department staffing. Surely the fires in our state right now would suggest the risk of this approach.
Dems might respond that they have little choice because of Republican obstinacy on taxes. But that is absurd. Democrats have done almost nothing to sell their budget plan, which was agreed to rather late in the process. They haven't done the public work to explain why the budget cannot be closed via cuts. And make no mistake - raiding transit and local governments IS a budget that emphasizes cuts. It gives Republicans everything they want with little in return.
Republicans claim they don't negotiate in public but we all know that's untrue. Californians perfectly well understand what their stand is - no new taxes. What have Democrats responded with?
Democrats should not embrace this plan. All it will accomplish is increased distrust of the Legislature - if possible - and sour voters on Democrats due to their leadership failure. Dems will have difficulty generating the public support necessary for long-term fixes if they agree to a plan which will cause confidence in government to plummet. This will only hurt Democrats over the long-term and they would be smart to take a step back and consider what they're doing.
[Update] I wrote this in a panel here at Netroots Nation on building progressive activism to help the "middle class" that includes our own Juls Rosen and David Sirota. The panelists are making brilliant points about how tax reform is the key to addressing the collapsing middle class - and how the right has effectively used taxes to pass themselves off as populist. People want tax fairness. Democrats need to be forced to take a stand on taxes. California Dems are once again looking to punt and are going to hurt working Californians in the process.
