The Vanguard has a new home, please update your bookmarks to

Sunday, February 08, 2009

And Still We Have No Budget

I rarely comment in this space about comments to other posts, but given that I am trying to bring together multiple threads into a single article, it actually works quite well.

The anonymous commenter said:
"I agree the State Legislature is bad and has been that way for more than a few years. The self serving Nunez and Perata are gone and that helps. I think Arnold has been trying to get everyone to see the light for a couple of years now. But they all have their special agenda's to follow."
Having covered the state government for over two months now as my "day job," I have to strongly disagree with the Mr. Anonymous here. The Governor is the problem--he does not lead, he issues fiats and then goes on extravagant trips.

Let us for a few moments throw out politics altogether and forget about whose side we agree with and whose side we disagree with. Let us also throw out the fact that California's two-thirds requirements are unworkable. On a side note, the Public Policy Institute of California's poll shows for the first time ever a majority (bare as it is) support for reducing the two-thirds requirement to pass a budget to 55%.

But back to the problem. Everyone talks about how they do not like politicians. Let's face it, they are unsavory. They are often cold, calculating, and bent on scoring political points over sound public policy. But there comes a time when you just need to get things done. And let's face it, we are long past that in California.

When there is a budget deal, and there will be at some point, no one is going to like it. The Republicans are going to have to accept the fact that taxes have to go up because you simply cannot make enough cuts to balance the budget without causing more problems than you solve. Democrats are going to have to accept the fact that we are spending too much money and have to cut and that unfortunately they are not going to be able to just cut programs that they don't like, they are going to have to cut into programs that they do like and from their perspective, do work.

Everyone is going to hate something about this budget.

So back to the Governor. The Governor cannot do this by fiat. The Governor cannot try to do this from afar. If he wants to portray the severity of the problem, then he needs to be traveling around explaining the problem to constituents. He needs to park himself in Sacramento and he needs to roll up his sleeves and work. Until he is willing to do that, this budget problem is not going to be solved.

Moreover, the Governor has one primary responsibility in this process, he must get enough of his own party on board with him to strike a deal. This is a complete and total failure on his part. If Arnold were merely having to work with the Democrats, there would have been a deal a long time ago. The Democrats for the most part have been willing to compromise far more than the Legislative Republicans. I am sorry, but in my book that is Arnold's failure. All he needs is three votes from the Republican party. He should be able to offer enough inducements to get three members of his party to sign on, but he has not been able to do this so far.

There is a ripple down effect here that is going to be tremendously devastating. First, the governor is trying to balance the budget on the backs of state workers right now. Folks, most of these guys aren't like the Davis Firefighters making $150K per year in total compensation. These are people who make maybe $30 to $40K. A ten percent cut in their salary means somewhere between $300 to $400 per month in cuts for people who are largely living paycheck to paycheck.

Budget cuts are preferred by many over tax increases. Sales tax may be regressive, but think about it this way, a 1% sales tax increase means, one additional cent per dollar, it means one dollar additional tax per $100, it means ten dollars additional tax per $1000. You are telling me that people who make a $1000 purchase are going to notice $10 additional in sales tax?

On the other hand, budget cuts mean people will get laid off. One proposal for example had Republicans suggesting $10 billion in education cuts. Let us not forget what that would actually do to education, probably the most important thing we spend our money on, that's probably 20,000 teachers laid off. What would that do to the economy. We've had to suspend construction projects to the tune of $660 million per month. For crying out loud, the stimulus plan that Obama is looking at is trying to create construction projects to stimulate the economy. And we are cutting those jobs?

A lot has been made about furloughing state workers. People seem anti-state worker until of course they can't get their unemployment check or go to the DMV, because it's closed on a Friday when they should be open to collected revenue for the state. Then suddenly they realize that they need state employees to run our state. They provide a service. They are "public servants." We actually need them. Of course you say, private sector is laying off their workers, local government is also furloughing their workers. But wait, there is one big difference, let's start at Yolo County by way of example.

Remember as I said earlier, Arnold likes to govern by fiat. There is a process by which furloughs should be considered. It is the collective bargaining process. If the County cuts employee work days and salaries it occurs in negotiation. If the school district cuts employee work days and salaries it occurs in negotiation. If the city of Davis cuts employee work days and salaries it will occur by negotiation. That is how the rights of workers are protected. Almost every agency has been willing to sacrifice so that employees are not laid off. For all the perception out there, that is an amazing thing.

However, Arnold wouldn't and won't do that. This despite public employees groups publicly suggesting that they would be willing to work with the state to make things work to avoid layoffs. This despite what Speaker Bass said on New Year's Eve that the Democrats would be fine with holidays and furloughs as long as it was part of the collective bargaining process.

Yolo County is in many ways in deep trouble. They will be $18 million in deficit. That is one-third of their operating budget. There was a good story Friday in the Sacramento Bee on the relative success of Yolo County in instituting voluntary furloughs since May. That's right, voluntary furloughs. That is how job losses have been avoided. But this occurred with the help and consent of the bargaining units as opposed to forcing furloughs upon them.
That, at least, has been the experience of Yolo County government workers – for whom unpaid time off has become the norm over the last seven months.

Beginning last spring, when county officials realized they had to cut costs, Yolo County employees either volunteered to take time off or eventually faced mandatory furloughs.

Many say their experience has been surprisingly positive, despite the pay cut.
The Governor does not operate that way. He issues demands and fiats and expects people to comply. What he discovered is that that type of approach produces resistance rather than cooperation.

Let us not kid ourselves, the situation would be dire no matter what given the nature of the economic crisis before us, but had Arnold agreed to a budget in December, California would be in far better shape.

For one thing, we would be working with real budget numbers rather than assumptions. People's lives have been torn apart based on these assumptions.

Look no further than the school district. They are going to have to put people on pink slip notice once again because they cannot assume budget flexibility. If we had a budget, they might not have to do this. They are going to have to ask teachers to take a 2.5% pay cut. This will be negotiated. It is not preferred, but it will be done if need be in order to prevent job losses right now.

I actually think Sheila Allen summed it up the best:
"It's just so frustrating that we have deadlines that we have to meet and other elected officials are not. So we're working with 'fiction' and we're messing with real people's lives when it's based on fiction, it's very frustrating."
I agree. I'm sorry anonymous, but from my standpoint, Arnold doesn't know how to negotiate. He doesn't know how to lead. The departed President found himself in a similar situation. Oh he had conviction to the point of stubbornness, but like George Bush, Arnold never learned the most valuable lesson of all, you aren't a leader if no one is following you. Until Arnold learns that lesson, these budgets will only get more difficult and more and more people's lives will be torn apart.

Come on Mr. Governor, it's time to step up and solve the budget crisis not by will, not by fiat, but by cooperation and in true spirit of negotiation.

---David M. Greenwald reporting