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

Tuesday, February 17, 2009

Maldonado Holds California Hostage to his Flights of Fancy

About the last person I expected to be talking about on the Vanguard was Senator Abel Maldonado. Maldonado represents among other places my former hometown of San Luis Obispo. I remember him as the Mayor of Santa Maria, the moderate Republican who defeated the right wing racist Mayor of that town. He rose to prominence as a moderate, often casting the decisive vote on budgets.

He's about the last person I expected to be holding up the budget, but here he is doing just that. And it appears to be all personal from where I sit. It has nothing to do with policy. Nothing to do with what's good for this state. It is all about what's good for Abel.

I watched yesterday, while outside of his office, as he laid out his asking price in order to release California from its hostage crisis.

He listed off four things--and they were are all about him. You see in 2006 he wanted to run for Controller of the State of California, but he was not supported by the Governor. And he was unable to win in the primary. Now he wants to run again. This time, he wants to create a primary system where a moderate Republican can win; therefore, he wants an open primary system which would allow the top two vote-getters, regardless of party affiliation, to run in the general election. This of course would have to be approved by the voters and presumably placed on the May special election ballot with a number of other items that would be passed in this budget.

Next, he wants to pass a law that would prevent legislators from being paid if there is no budget on time. He also wants to ban pay raises for legislators and per diem increases during years of budget deficit. Finally, he wants to remove pork spending from the budget package, most notably, his little feud with the Controller where he wants to block the Controller's office from $1 million to complete its office upgrade to make it ADA (Americans with Disabilities) compliant for access to those with disabilities and and make it compliant for workplace safety rules. The upgrades were approved and money set aside before CA was in a fiscal turmoil.

The four demands have little chance of receiving two-thirds support in the Legislature, so the Senator would accept perhaps one or two. "I think government reform is a priority. It could be one, it could be two, at the end of the day, I want government to be reformed."

Senator Steinberg said it was not possible to place an open primary election on the May ballot, that is certainly not something you would want to create in a day or two. The middle two might be more reasonable. We will have to see this morning at 10 am to see if the Senate agrees to them.

Meanwhile there is a cost for inaction and it is very high.

The Governor's Finance Director Mike Genest told a Senate Committee yesterday that there would be a huge cost for continuing to delay the budget. It would result in halting the remaining 276 public works projects which are roughly $3.7 billion in expenditure.

Moreover, the cost to stop these projects and then restart these projects would be roughly $400 million according to Will Kempton who is the director of Caltrans.

In December, state finance officials halted financing for 5,600 construction projects across the state. However they agreed last month to continue 276 projects that were either too far along in construction or would cost the state too much to halt and restart later.

These shutdowns would affect around 90,000 jobs across California. In addition, the Governor has threatened to send out layoff notices to 20,000 state workers today. That means that if there is no budget, there will be 100,000 people laid off this week.

Worse yet as Senator Cedillo said on the floor of the Senate last night, there is a ripple effect. On the low end 2.5 times, on the high end 5 times the ripple effect. What does that mean? It means that on the low end you could see 250,000 jobs impacted by this inaction, on the high end, 500,000 jobs impacted.

That does not even get into the issue of the state defaulting on loans. It does not get into what happens for counties that rely on state monies. It does not get into what happens for school districts that rely on state monies.

The response of Republicans like Senator Dennis Hollingsworth is how many jobs would the sales tax increase cost? He suggested 50,000 jobs. His colleagues asked him to site his data. I find it difficult to believe that paying one additional cent on the dollar in sales tax, which means one dollar for every $100 and $10 for every $1,000 is going to have that kind of effect.

The Republicans argue that their constituency doesn't want to pay anymore for the fiscal problems of California. No one does, but it is interesting that Republicans do not want to pay any more taxes, but have no problem if others pay by losing their jobs.

That is what we face right now. Moreover, no one has proposed a budget that is balanced with only spending cuts. Not the Republicans. Their only proposal was $20 billion shy of being balanced and that included $10 billion in cuts to education.

We ran through the math yesterday. If you want to fire all state workers including prison guards, release 160,000 inmates, close down the college system, fire teachers, close down all of the state parks, and stop all public assistance including unemployment insurance, you get close to that $41 billion mark. But is that really what we want to do? Is that the state we want to live in? What would that end up costing CA?

More immediately we face a fiscal crisis because there are not 27 votes for that scenario either. Republicans have to understand that there needs to be compromise. The Democrats believe me do not want this budget, they do not want these cuts, but what's the alternative? It is far worse. I spent most of my day talking to legislators and staffers who are sick about some of these cuts, but what's the alternative? They are doing what they have to do. They have come a long way in compromise to get to this point. The Republicans have on the other hand done almost nothing in compromise, only two have come off the no new taxes stance. None have proposed an alternative.

This is what Abel Maldonado apparently does not mind having happen this week if he doesn't get legislation that would make it easier for him to run for State Controller.

We're out of time, the consequences for inaction start this week and they are severe. If you think the economy is bad now, just wait until there is several billion less pumped into the economy.

---David M. Greenwald