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Wednesday, September 17, 2008

A Budget That Nobody Wants--And We're Probably Stuck With

Despite a veto from the Governor, this is likely going to be the budget. The legislature expects to override the Governor's Veto this is coming on Friday. If that happens, California will finally have a budget. The Governor will shown to be a powerless figure who occupies the statehouse of the nation's largest state.

As the Bee Editorial says:
"Gov. Arnold Schwarzenegger will reclaim the high ground on the issue that propelled him into the Governor's Office five years ago but has bedeviled him ever since: the state's badly broken finances."
Of course it's hard to feel for this governor after some of the antics he has pulled including threatening the livelihood of tens of thousands of state employees, laying off thousands of temporary state employees, and now threatening to have a temper-tantrum and veto every bill that comes before his desk.

Polling shows that Governor Schwarzenegger is at an all-time low in his approval, but most of the public does not have the stomach for recall. Heck, recall did not work last time and it will not work this time.

No one is really happy about the budget.

Jim Sanders of the Sacramento Bee on Monday reported:
"A key element of the deal would increase by 10 percent the amount of income taxes withheld from workers, and from taxpayers who earn income from investments.

Much of the $15.2 billion budget shortfall would be bridged by advancing revenues to be collected in future years, shifting or borrowing money from other state funds and employing accounting maneuvers. The plan would generate immediate revenue but leave gaping holes in future budgets."
Dan Walters, who I rarely agree with, blasted the budget deal:
"Nobody could have dreamed up a less responsible, more gimmicky, sure-to-backfire state budget than the one California's political leaders cobbled together and were jamming through the Legislature on Monday night to end a months-long stalemate...

"They violated every principle of fiscal responsibility by conjuring up billions of dollars in sham revenues - basically money borrowed from corporate and personal taxpayers that would have to be paid back later - to cover a huge deficit so they could blow town."
Assemblywoman Lois Wolk's comments were surprisingly and refreshingly honest.
"The best you can say about this budget is that it's done. We have managed to keep our schools funded without raiding funds from local government and transportation. That's good.

"The disappointing part is that we have only, as the Governor says, kicked the can further down the road. We failed to address the structural deficit and next year's budget will be even more difficult to solve than this one. Yes, this is a compromise, but it's not one that anyone should be especially proud of. I'm not.

"On the plus side, in addition to avoiding teacher layoffs, I am satisfied that we were able to keep our local law enforcement and rural sheriffs fully funded and prevented some of the most onerous cuts in health services for children and seniors.

"This experience has reinforced my belief that we need to reform the budget process as soon as possible. Allowing a minority of legislators to hold the Governor and the entire state hostage is unacceptable. I am currently working with an independent bipartisan reform effort going on right now called California Forward. This is the most serious reform effort in decades and I am looking forward to supporting their recommendations."
On the other hand, what has the Assemblywoman done to change the outcome? She voted for the compromise.

Basically what the legislature is doing is kicking the can down the road to the next legislative session. They have not done anything to solve the problems that underlie the budget. Schools will face budget cuts again next year. Worker's will face uncertainty about their job security and their benefits. Millions still have no health insurance.

One thing this whole mess has convinced me to do is take another look at the redistricting reform bill. Personally, I think term limits have been a disaster. As this process unfolded, it was clear that there was no big five who could get together and hammer out the details of the budget and then get their members to support it. It was also clear that Governor has absolutely no influence in his party. Some might say that's a good thing, but the problem with it is that he cannot get the membership of his party to agree to his proposals. That leaves the Republican party with the power only to hijack and to negotiate and bargain.

Why might the redistricting plan help? For starters we can hold politicians accountable. Right now, 90 percent of the legislators live in safe districts. It is difficult to hold politicians accountable when they do that, except in the rare condition when one of their own party members can take them out like what happened with Mark Leno defeating Carole Migden.

If you look at the groups supporting Prop 11 there are some pretty good reformist groups on the list--League of Women Voters, AARP, Common Cause, ACLU, advocates from blacks, Hispanics, children, and seniors, among others from the other side which includes Chamber of Commerce, Police Chiefs Association, Taxpayers' Association, Business Roundtable, the list goes on.

I have not decided to support the measure, but I am looking again. Some have suggested that the two-thirds vote is a problem--it is but it is not going to go away. The only way this gets solved rather than postured is if both sides go into negotiations and recognize that they have to do things that they do not want. For Republicans that means some taxes have to go up, perhaps they can decide which ones. For Democrats that means there has to be cuts. If you do not want education cut--and they should not--then you have to find some cuts.

If I were they, I would appoint a six member bipartisan group of legislators at the beginning of the session to come up with a way to reform the system and avoid this trouble from the start. Go through the budget and figure out what can be cut and then agree on revenue enhancements. When both sides hate it, then you know that there has been a good job done. Until that happens, we are going to keep repeating this year's scenario.

The worst part is that the people who get caught in this are not the legislators. Last night on the news they showed all of these state funded senior housing care centers where people have had to borrow from their own savings in order to keep them afloat. If these centers go under, thousands of senior could be put on the street. That would look good right before an election.

---Doug Paul Davis reporting