John Garamendi Becomes First Prominent Dem To Endorse Lakoff Initiative Concept

John Garamendi appeared on Angie Coiro's Live From The Left Coast with Professor George Lakoff and our own David Atkins to talk about the California Democracy Act, Lakoff's one-line initiative which would change all legislative actions on budget and revenue to a majority vote. Listen at around 13:00 for Garamendi's remarks endorsing Lakoff's approach.

Garamendi: Well, if you put a proposition or a Constitutional amendment on the ballot, and it says, gives the legislature a majority vote to raise taxes and a budget, or one or the other, it's likely to be turned down. You know, that's, the polling indicates that, there are issues that have come up before, there was one I think two years ago that was on the ballot, it was turned down (it was 2004 -ed.). That was 55% for budgeting. The fundamental problem is, we're not framing the issue, we're not putting the proper issue to the people, and I think that was the common error from just a moment ago. If you make it about the budget, if you make it about taxes, I think you're sure to lose. If you make it about the very nature of democracy, all the way back to the Greek, the Greek civilization and the start of democracy, it was a majority. It was a majority situation, and here we are in this day and age in America where we really have thrown majority out, and we, in California at least, we are faced with minority rule, and some would say the tyranny of the minority. Which is exactly what's happened in the last two or three decades now, when it's come time for tight budgets and tight situations, urgency bills, as well as budget or tax bills. So I think we need to have a new discussion about what is the nature of our democracy.

While not an explicit endorsement, this mirrors Lakoff's theory on how to properly put together this kind of initiative. The majority rule theory is fairly rooted in the American imagination, and that's really the only way to explain this to people. There isn't enough of a sense that we have minority rule right now, and that this tyranny of the minority is largely the cause of the state's dysfunction over the last several decades. This is more than anything an education project, and Garamendi appears to understand it.

We're a democracy, we elected these people, let them do their jobs, and if we don't like what they do, we'll throw them out the next election.

Majority rule is an accountability measure. People currently have everyone and no one to blame for the problems of the state. Democrats can blame the rules, Republicans can blame the Democrats. Majority rule would make things much clearer for the public.

This is an important turning point, to have someone like Garamendi openly siding with the concept of the Lakoff initiative in what is fast becoming a grassroots/establishment split. The folks at CA Majority Rule are still raising money for a poll to prove their concept as one that can work with voters. I suggest you give it strong consideration.

Will The Spotlight Ever Fall On Jerry Brown's Ideas, Not His Image?

With the Rasmussen poll numbers filtering through the traditional media, the idea of Jerry Brown being the favorite at this moment to return to the Governor's mansion is taking hold outside of California. Talking Points Memo has a piece marveling at how strange it is to see the "colorful" Brown back in this position, recalling the time-worn stories about Linda Ronstadt and "Governor Moonbeam," although they do acknowledge that "this all contributed to a somewhat inaccurate caricature of him as a left-winger." Indeed, the TPM profile notes that Brown was a fiscal conservative in office and ran on the flat tax in 1992. Clearly, the author was informed by Joe Mathews' cover story in this month's American Prospect, which delves further into Brown's un-campaign for Governor and the puzzling question of what in the heck he's planning to do once he gets there:

But a little talk about the big picture is in order. Outside Brown's news conferences, California is coming undone. This summer, unemployment reached 11.9 percent. Tens of billions of dollars have been cut from the budget in the past year. Thousands of teachers have been laid off. State offices are now closed three Fridays a month. University tuition has been hiked. Thousands of elderly and disabled people are losing their state-provided health insurance.

The crisis is so profound that it may present an opportunity for California to fix its badly broken government. Coalitions on the left and in the center (the right is sitting on the sidelines, enjoying the Armageddon) are drafting plans to change the way the state is governed. They hope to get several measures on the 2010 ballot that would reshape the state budget, call a state constitutional convention, and perhaps unwind much of Proposition 13, the 1978 initiative that severely limited the government's ability to raise taxes -- a major contributing factor to the budget hole California finds itself in today.

If any candidate should be talking about this, it's Jerry Brown. After all, Prop. 13 passed during his governorship. But Brown has yet to engage the would-be reformers. In the rare moments when he's asked how the state might be fixed, he talks vaguely of the need to forge compromise and invokes older, better times in California, when he and his father, former Gov. Pat Brown, were in power. "We can talk about 'restoring the dream,'" he told a union conference in Palo Alto during an explicitly political appearance this summer. "Well, I was around when the dream was here."

This is a dodge -- not only of the present questions about what he might do as governor but also of lasting concerns about Brown's own role in diminishing the California dream. Pat Brown was a great builder of the highways and waterways and schools that made the state prosperous, but his son Jerry announced "an era of limits." Since that declaration 33 years ago, the state's population has grown from 22 million to more than 38 million. The state government has not kept up. If Brown has specific ideas on what to do about all of this, he is keeping them to himself.

Brown clearly has a blueprint for winning the election - say as little as humanly possible about the problems that grip the state, and hope that tangerine dreams of the halcyon 70s push him to victory. You cannot blame him - it's a winning formula. With a pathetically thin state political media, it's fairly difficult to run on any issues to begin with, at least ones beyond the bumper-sticker variety. Arnold Schwarzenegger got elected by saying pretty much nothing that wouldn't fit as a movie slogan, and a celebrity-obsessed media let him get away with it. So I don't begrudge Brown the lack of specifics. That's the way the game has been played in recent years.

Indeed, I don't worry about what we don't know about Brown, but what we do know.

Progressives, both then and now, argue that Brown's brand of anti-government liberalism fueled the Prop. 13 fire. If government isn't all that important, what does it matter if you cut taxes? Brown had frozen highway construction, criticized funding for adult education and food stamps, and slashed social services. "I am going to starve the schools financially until I get some educational reforms," he said in one encounter with reporters.

What reforms, governor?

"I don't know yet." [...]

Brown, in the midst of running for re-election, called himself a "born-again tax cutter" and immediately reinvented himself as Prop. 13's champion. (He maintains now that he had to support 13 after its victory because of his oath to defend the state constitution.) Brown went so far as to befriend the legislation's co-sponsor, the anti-tax crusader Howard Jarvis. "It seemed like he went over to Jarvis' house frequently," says Joel Fox, who would later serve as an aide to Jarvis. "Mrs. Jarvis would tell stories about serving lunch to the governor with Howard in his pajamas. Howard voted for him for re-election because Jerry convinced him he would implement Prop. 13 in the right spirit."

As it happens, the only thing worse than Prop. 13 itself was its implementation. Brown and the legislature bailed out cities and counties that lost revenues under the law -- and thus established the dysfunctional system of budgeting that plagues California to this day. Tax and spending decisions once made by city councils and school boards were centralized in Sacramento. The state Capitol became a giant piggy bank, with interests on the right and left using lobbying muscle -- and the initiative process -- to carve out special protections for their funds, leaving less for broad public investments. At the rare moments when Democrats tried to make such investments, Prop. 13's two-thirds requirement for taxes allowed Republicans, even when they were in the minority, to block them.

Indeed, the Jerry Brown of recent public comments shows no sign of understanding the present state of the state. He has supported the current Governor in various accounting tricks and tough-on-crime stances that have blown a hole in the deficit. He has stated an unwillingness to take a leadership position on any even remotely controversial issue. He hasn't strayed from that "born-again tax-cutter" mantra. As our own Robert Cruickshank says in this very good article:

"The problem with Brown is that I'm not convinced he's moved past 1978," says Robert Cruickshank, who works for the progressive 700,000-member network Courage Campaign and is a frequent contributor to the blog Calitics. "The lesson he drew from that is that he has to adapt to a more conservative reality. ... I'm concerned that it's not going to be the kind of governorship where you see significant changes in the way California operates."

If this is the Jerry Brown we can expect to "lead" in 2010, I know that progressives will have far better outlets for their advocacy, be it the Lakoff Initiative or the Constitutional convention. As I've said many times, you could elect Noam Chomsky governor and he would still be constrained by the same structural factors that resist true democracy and responsible governance. And Jerry Brown is most certainly no Noam Chomsky.

The Real Story On The Lakoff Initiative

You may have seen me live-tweeting the events last night at SEIU Local 721 in LA, where Professor George Lakoff and the folks behind CA Majority Rule met with around 200 activists, union members, elected officials, legislative candidates, representatives from Speaker Bass' office, and more, to talk about the just-released proposed November 2010 initiative on majority rule. If you read through both the live tweets and Dante Atkins' notes on the meeting, I think you get a picture of a potential split inside the California Democratic Party, one that could have major implications for all elections next year.

It should be noted that CDP Vice-Chair Eric Bauman was there to offer support. He gave a typical stump speech and said very plainly that "the reason you're here tonight is the solution" to the problems that grip the state, problems he laid out very carefully and completely. He was honest in saying that any Democrat who opposes this kind of measure will be told that "vertebra are available for installation... I think the chiropractor's lobby can help us with that." He made clear that we don't have a spending problem, "we have a common sense problem," and he pushed everyone in the room to work toward a real solution.

But Professor Lakoff's speech seemed to capture the dynamic between the grassroots and the establishment much better. Lakoff opened by talking about the origins of the initiative that he filed yesterday:

I got into this last spring when Lonnie Hancock invited me to speak to a group of State Senators. And I said, what's the problem, you're the majority! And they said they don't have any power. And they explained the whole 2/3rds rule, and how the leadership has to work with them because we want to lose as little as possible.

And I asked, why aren't you in every assembly district explaining this problem? It's about schools, healthcare, everything, and there's no answer. I went back and said that there's something really wrong. Its name is democracy [...] Which is more Democratic? Majority rule, or minority rule? You knew the answer from the 3rd grade on. Even Republicans know the answer but they don't like to. We know there will be a blowback if we try to change things, but the hardest blowback is coming from our side. The reason that Loni Hancock invited me was that there was a poll done by a progressive organization, and it asked the wrong question.

This is my business. Studying language and the framing behind language. If someone presented you with the poll question: would you rather have more taxes and higher services, or fewer taxes and less services. Obviously, it went with the latter. And the legislature concluded that they shouldn't put anything about taxes on the 2010 ballot. Why do they think that? Because they think that polls are objective, and that language just floats out there. They're wrong. Language is not neutral. There's a truth here that that language hides. It's the truth that we don't have Democracy in this state. We have minority rule.

In response, because nobody else would do so, Lakoff's initiative reads: "All Legislative actions on revenue and budget must be determined by majority vote." It's tweetable and it's fairly simple to understand. It's framed as a democratic action to return the state to democratic rule. And it appeals very much to those interested in preserving democracy.

Which is the consensus opinion inside the Democratic Party. We know this because, back in July, the state party passed a resolution calling for majority rule for budget and revenue. And it didn't pass with contentious debate - it passed unanimously. One of the very few people to speak out against it was the Party Chair, John Burton. But the rank and file supported it utterly.

It was something of a reversal for Burton, who when he was trying to get the votes of those rank and file supported a majority vote position. Now he's seen some polls and decided to take half a bite out of the apple. Lakoff described his exceedingly short meeting with Burton last night.

Burton wouldn't talk to me for more than a minute. He just said that he saw the polls, and it said 55% on budget and nothing on taxes. How many of you were at the state convention? You voted on a resolution about this. How did that resolution come before you? The resolutions committee. And that was the point. We got the resolutions committee to do it and got a standing ovation. The rank and file Democrats know it's the right thing to do and they have to tell their leaders. So how do you change this? You have to have a poll, but you have to have pressure. The major donors have to call Burton and say, if you want any money from me, you get behind this. And he has to hear that from donor after donor and organization after organization. We have to win in our own party first. I think John Burton is a good person, same with Bass and Steinberg. It's the good people that we have to win over first.

Later, a woman from AFSCME asserted that Willie Pelote was willing to give $1 million dollars to a majority vote campaign until Burton called him and told him to forget it.

You can argue about what the most effective approach is to deal with California's budget dysfunction. We've been doing that all week. You could say that leaders must prepare the ground by tying things Californians want to revenue, and tell the story of Republicans thwarting the popular will. You can say that we need to throw out the Constitution and move straight to a convention. But what becomes incredibly clear is that there is a groundswell of support inside the party for a simple move to restore democracy to the state, and if the establishment in Sacramento rejects that, in particular John Burton, the subsequent outrage will have a major impact on grassroots support for all Democratic candidates next year. There's just no question about this. The grassroots already feels disrespected and abused by the leadership. They got Hillary Crosby into a statewide officer position based on just this kind of frustration. They feel that one of the richest economies in the world is run like a third-world country, and they know that they will never change that when procedural rules force Democrats into a defensive crouch, where they see their role as losing as little as possible. This split will grow and branch out into statewide officer races, legislative races, etc. The grassroots workhorses won't be very inclined to work so hard for a Party that disrespects them and fails to act in their stated interests. Not to mention the fact that everyone knows that, while we wait another Friedman Unit until the electorate figures out the problem on their own, people will suffer from budget cuts, people will go bankrupt, and people will die.

The CA Majority Rule team has a multi-pronged strategy. One, they are raising money for this poll, to try and prove that a properly framed set of questions will elicit the desired results. Two, they will put Speaker's Bureaus together in every district in California with people who can talk about majority rule and restoring democracy, complete with real-world examples of the fruit of the state's dysfunction. Three, they will seek to pass endorsements of the one-line majority rule initiative in every Democratic club and county committee in California. There's an executive board meeting coming up in November where this will probably come to a crescendo, too.

The real story of the Lakoff initiative is a story about rank and file Democrats wanting their leaders to follow their will. You can argue about tactics or strategy or approach, but that's what it boils down to. And the party leadership had better take heed.

The Friedman Unit Strategy For Perpetual Minority Rule

The deadline for filing an initiative that would make the November 2010 ballot is Friday. The initial measures to repeal the 2/3 ballot initiatives filed by Maurice Read failed at the end of July. There is currently an initiative to lower the threshold from 2/3 to 3/5 in circulation, but it does not have any backing.

And that's it. There is no pending initiative regarding any two-thirds rule, with the institutional support needed to get on the ballot, and the deadline is Friday.

As has been mentioned in a Contra Costa Times article, the political leadership in the CDP appears to be moving away from it.

A split between Democratic activists and the political pros who run the party may be growing over how to approach the issue that has bedeviled the party for years: the two-thirds vote required to pass taxes and budgets in the Legislature.

Most Democrats in the upper echelons of the party apparatus are convinced it's a fool's errand to try to persuade voters to hand the majority party unchecked power to raise taxes. Instead, they're gearing up for a campaign next year to lower the threshold — from two-thirds of both legislative bodies to a simple majority — on budget votes only, a path they believe voters can embrace.

But some grass roots liberals say they're frustrated with the caution of party leaders and believe, if sold right, voters would hand over both taxing and budgeting powers to the majority party.

"This is a doable thing, but it requires getting Democrats together and deciding to really do it," said George Lakoff, a UC Berkeley linguistics professor who has become a de facto leader of the cause and is preparing to submit by next week a ballot measure for the November 2010 election that would drop the two-thirds requirement on both taxes and budgets. "Either they want to give the state a future or they can let Republicans continue pushing it into disaster." [...]

But party leaders see him as quixotic, and dismiss his position as misplaced and uninformed.

"People are not ready to pass it," said John Burton, the Democratic party chairman and a former Senate leader. "He's got a theory. Good luck to him."

Mind you, that another guy had a theory before he entered the CDP Chairmanship: John Burton. At the time he committed himself to repealing the 2/3 majority for the budget and taxes, and listed it as a top priority. But I don't even know that the Burton fallback position is being considered; as of now, they have a little over 48 hours to file a 2/3 repeal on the budget. And of course, this would immediately put half of what a budget is - revenues - off-limits, while taking responsibility for bad budgets that cannot be fixed.

What I have heard now is that, with statewide offices being decided in 2010, party leaders don't want to put revenue on the ballot and increase GOP turnout against it, threatening their statewide officer candidates.

This is nothing more than a Friedman Unit strategy. We cannot put such a proposal on the ballot in 2010 because it might hurt candidates, so we move it to the next election. Which has candidates in it as well, so we have to just hold off past 2012. But our Governor's up for re-election/trying to defeat the Republican in 2014, so we have to hold off then, too. As a result, nothing proceeds.

And it's worse than that. We hear constantly that the public is not ready for a conversation about changing the rule, but in the meantime nothing is being done to prepare the ground for that shift in public opinion. It's not that we have to give the war a few more months to succeed, as in the Friedman Unit; it's that we have to give NOTHING more time for voters to, I guess, come up with their own ideas about state government.

The inescapable conclusion you must come to is that everyone in the system actually likes the system as it is. For Democrats, they personally prosper by getting elected and re-elected, and they can always blame the 2/3 rule for whatever failures occur. It's accountability-free government complete with a scapegoat, and it rocks their world.

We can talk about how Democratic leaders tend to view the electorate as static and unchangeable, rather than the starting point from where opinion can be shaped. We can talk about how small-bore goals or a major crisis can provide the spark for the change the state so desperately needs. But this isn't a failure of imagination. It's a general contentment with the status quo.

Which is why change will have to be imposed upon the system from the outside. The most intriguing initiatives to date are the one pushed by Lenny Goldberg to repeal the $2 billion dollar a year corporate tax breaks, and the proposal for a Constitutional convention (though that has also not gone into circulation by the Bay Area Council, but only through an independent effort from Paul Currier). This obviously cannot be left to anyone in Sacramento - they will always find a convenient excuse for delay.

Palace Sentries Dispatched To Guard The Drawbridge

The establishment in Sacramento has manned the barricades, battened down the hatches and gone on the offensive to prove their own worth. They sent their best man in the media, George Skelton, out to prove that no, despite your lying eyes, the California Legislature had a real banner year. After all, they managed to bring suffering to the lives of hundreds of thousands of state residents with consensus and bipartisan elan!

The current Legislature, regardless of Duvall and despite ideological polarization, has had a better year than it's getting credit for.

Its main accomplishment was keeping the state afloat amid a flood of red ink, created primarily by the toughest economic times since the Great Depression. OK, so it did use some bailing wire and chewing gum! The bills got paid, even if briefly with IOUs.

With great difficulty and pain -- at least for Democrats -- the Legislature and Gov. Arnold Schwarzenegger slashed programs by roughly $30 billion. They also struck a major blow against "auto-pilot" spending by permanently eliminating all automatic annual cost-of-living adjustments, except for K-12 schools. And they summoned enough courage to temporarily increase taxes by $12.5 billion.

In the end, they found a way to restore health insurance for 660,000 low-income kids.

The tax increases hit the more vulnerable elements of society disproportionately, of course. They actually found that way to restore children's health insurance by lowering industry taxes and increasing the co-pay and deductible burden on the low-income families themselves, while reducing the covered care. And anyone who adds cutting $30 billion in programs and eliminating COLA as an accomplishment is a bit of a social deviant. But there are probably no lengths to which Skelton will go to defend the palace walls from the rabble who think, based on the evidence, that the system is horribly broken.

Steve Maviglio wisely steers clear of the more horrific achievements of this year's Legislature, and offers a slightly more defensible outlook of the '09 Legislative session. Still, there's a lot unsaid:

Looking back, getting the measures on the May ballot was a significant early success that required 2/3 votes. And toward the end of the session, in addition to the renewable energy bill, Speaker Bass pushed through measures on childrens health and domestic violence that won broad bipartisan support. (The Speaker also got a standing ovation, and she appears to have strengthened her support in Caucus. Compare that to the ouster of the two Republican leaders).

Okay, so the grand water deal didn't get done. Big deal. Nothing like that has been done for a generation. Perhaps Senate President pro Tem Steinberg set the bar too high when he said he'd get it done. In any case, all parties agree that they got close and can pick up the pieces and get it finished in short order.

So for all those crying for major reforms, put it all into perspective. Sure, improvements could be made, and things could have been better, but this is not reason for drastic action. Far from it.

Of course, the renewable bill is veto bait, as are many of the other major bills pending the Governor's signature. And the domestic violence bill didn't pass the Senate, so, um, that doesn't count. The prison bill offered decent parole reforms but stopped well short of a real solution. Everyone keeps saying the water bill will happen but the two sides remain far apart, and the fact that they'll have to go into overtime to reconcile it kind of proves the point, no?

But Maviglio tips his hand with the line "this is not reason for drastic action." Of course he would say that. He's profited well from the status quo. Anything that messes with it could hurt him professionally, and what's more, could stop the endless blaming of outside factors to account for stunning failure.

There is no shame in stating that this was a failed legislative session. Just about everyone in California would agree with you, particularly the ones who are suffering the most from the destruction of social insurance caused by the most heartless cuts. Simply put, the Great Recession dominated legislative activity, and the conservative veto from various 2/3 requirements restricts the Legislature from fulfilling the expressed will of the people through their votes (NOTE: This does not only come into play with the budget; late last Friday Republicans blocked over 20 bills that required 2/3 votes for one reason or another, probably because they knew they could get away with it). That's not something to explain away, it's actually something to fight, every single day until the problem is rectified.

Skelton and Maviglio may want to tell themselves all is well, but the public knows better, and they're going to demand major structural change. Those who think that the Legislature can still be a force for good in the state can get aboard and provide the best ideas to break the supermajority gridlock and get the state moving again. Or they can defend their narrow interests. Their defense will fail, and it would be a shame not to see them on the right side of history.

Yacht Party Member Equal In Value To An Empty Chair

As Robert notes in an update, OC Assemblyman and noted utility lobbyist spanker Mike Duvall resigned his seat effective immediately.

Looking past for a moment the hilariousness of the family values Republican bragging about his multiple mistresses, and the very serious allegations of sex-for-favors with lobbyists, which should be investigated by the Ethics Committee and state prosecutors, there's a point to be made about the 2/3 requirement here.

Duvall's resignation reduces the number of lawmakers in the Assembly by one. Democrats now hold 50 seats, Republicans 28, with Juan Arambula as a Dem-leaning independent. However, because you need 2/3 voting affirmatively to pass a budget or tax increases, not 1/3 voting negatively to block it, this changes nothing in Sacramento. Duvall's seat being empty is pretty much the same as him voting no on everything. So unless Democrats can capitalize and win the seat (and I highly doubt it in that district), it's not useful from a voting perspective.

Just thought you should know, being a Yacht Party member is literally the same as not existing.

Japanamania!

Japan is often referenced when talking about their "Lost Decade" in the 1990s, a time when growth stagnated and economic activity flatlined. For ten years. And after that, the ruling party was STILL in power. So when the opposition party actually captures control of the government in the Land of the Rising Sun, it's a big deal.

Japan's opposition swept to a historic victory in elections Sunday, crushing the ruling conservative party that has run the country for most of the postwar era and assuming the daunting task of pulling the economy out of its worst slump since World War II.

A grim-looking Prime Minister Taro Aso conceded defeat just a couple hours after polls had closed, suggesting he would quit as president of the Liberal Democratic Party, which has ruled Japan for all but 11 months since 1955.

"The results are very severe," Aso said. "There has been a deep dissatisfaction with our party."

Unemployment and deflation — and an aging, shrinking population — have left families fearful of what the future holds.

Fed up with the LDP, voters turned overwhelmingly to the opposition Democratic Party of Japan, which ran a populist-leaning platform with plans for cash handouts to families with children and expanding the social safety net.

"This is a victory for the people," said Yukio Hatoyama, leader of the Democrats and almost certainly Japan's next prime minister. "We want to build a new government that hears the voices of the nation."

The new party plans for real economic stimulus and appears to be far more interested in reversing the effects of climate change. It looks like the Democratic agenda includes practically everything but the kitchen sink, so there are bound to be disappointments. But they actually have a two-thirds majority needed in their lower House to pass bills (I'm thinking about Japan's perpetual economic troubles, and the similarity to California, based mainly on that process obstacle).

Meanwhile, here's a look at Japan's health care system, among the best in the world (though lifestyle plays a big role in that).

...interesting op-ed from the likely new Prime Minister Yukio Hatoyama, arguing for a new progressive economic structure and not "unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation, in order to protect the finances and livelihoods of our citizens."

A Budget Made Of Straw

Among the sketchiest of budget solutions passed last month was the plan to sell the State Compensation Insurance Fund for $1 billion dollars. This would be a perfect plan, if anybody actually wanted to buy it. But they don't, and so later this year, there will be this $1 billion dollar hole in the budget, and oh-so-sincere Yacht Party types will assume that it's just the cause of overspending, or something.

"This isn't going to happen any time in the next three to four years because there would be one court case, if not many," said Frank Neuhauser, a University of California, Berkeley, researcher and expert on workers' compensation. "There's no money coming from this in the short term that would resolve a budget problem. I think it's no better than smoke and mirrors."

The list of problems with the proposed sale is long.

The authorizing bill requires that State Fund's board of directors agree that assets identified by the state are appropriate to sell. Whether that gives the board veto power is already under dispute, a key point since the board opposes any sale.

The board's right, by the way, since the only way you could sell off any of the assets of the worker's compensation insurer of last resort is by selling off low-risk policies to private interests, essentially saddling the SCIF with the worst policies and driving premiums up. This from the Governor who supposedly "slashed" worker's comp.

Meanwhile, there's this inconvenient set of facts:

A major question is whether the state even owns State Fund assets. Policyholders likely would argue that the assets belong to them, not the state.

When Colorado lawmakers this year attempted to take $500 million from its workers' compensation fund, Colorado's attorney general concluded the money was not the state's to take and would incur extensive litigation. A Utah judge in 2005 ruled that Utah likewise had no ownership in its workers' compensation fund "other than as a policyholder."

"I don't see where that money is the state's to take," said Neuhauser, the UC Berkeley workers' compensation expert. "When the reserves are more than necessary, they are given back as dividends. I've always thought of that as the employers' money and never understood how it's possible the state could sell it."

We see here, once again, the practice of breaking the law to balance the budget. Because the Yacht Party refuses to properly fund government, and because the current rules allow them a minority veto, the only avenues left are raiding special funds and illegal or unworkable gimmicks. It's a budget built of straw.

(By the way, John Chiang, attributing the problem to "irresponsible spending" doesn't really help matters)

What A Constitutional Convention Means To Me

People seemed to really engage with this post about a Constitutional convention, so I wanted to follow up with some of my thoughts for what a convention could tackle and what it could look like. As it happens I attended a town hall meeting about a proposed ConCon a couple weeks ago in Santa Monica, featuring Bob Stern of the Center for Governmental Studies, Jim Wunderman of the Bay Area Council, Steven Hill and Mark Paul of the New America Foundation, Asm. Julia Brownley (AD-41), Santa Monica Mayor Pam O'Connor and LA City Councilman Bill Rosendahl.

At the root, a Constitutional convention must concern itself with restoring confidence in government. Right now, that's at an all-time low, especially after budget agreements hashed out in secret that defy the will of the people and an erosion in the public trust in lawmakers to do the right thing in Sacramento. Government is not responsive, in fact in many cases it cannot Constitutionally be responsive to the popular will. The institutions have become paralyzed and captive to special interest lobbying. We have ten lobbyists for every legislator in Sacramento. And we have turned over the reins to a new branch of government, the ballot, and anything significant must be mandated by a vote of the people. As Julia Brownley, now in her second term, said, "Government structure is broken and we need to fix it... I didn't understand until I set foot in the Legislature the paralysis and gridlock that kills the system." I think Sen. Mark DeSaulnier, who is carrying Constitutional convention legislation in the Senate, put it well when he said that California remains at the vanguard with anything that can be accomplished on a majority-vote basis. Anything with a 2/3 threshold, in other words anything fiscal, is a mess. And it needs to be solved.

So how would a convention, the first of its kind since 1879, be structured? Right now, only the Legislature, with a 2/3 vote, can call for one. But the Bay Area Council and others who have studied this believe they can go to the ballot with two measures - one changing the Constitution to allow the people to call for a convention, and another to call for one. These can even be accomplished on the same ballot; while some have raised legal objections to this, this is pretty much how a recall election works, with the recall and replacement on the same ballot. Those who want to maintain the status quo because it works for them may disagree, but the California Supreme Court has clearly shown very wide latitude on votes of the people under the current system.

Other major issues to be hashed out with a convention are the scope and the delegate selection. Jim Wunderman of the Bay Area Council has said that everything within government should be on the table, which worries some that a Pandora's box will be open, an opportunity to mess with fundamental rights. First of all, that's the case right now, as last November proved. Second, I do believe there would be eventual problems with any document that nullified rights granted by the federal Constitution (the basis of the current Prop. 8 lawsuit). What we're really talking about with a convention is a process to create a more sustainable structure, dealing with electoral issues, governance issues, fiscal/budget issues, and direct democracy issues. That's a fair bit of territory, and I don't see any need to expand beyond that.

Then there's the thorny issue of delegate selection. Steven Hill explains in a study of the issue that there are three basic means for selecting delegates: through appointments, through elections, or through a random selection consistent with state demographics. There are plusses and minuses to all of them, but Hill reasons that the appointment process could wind up looking like patronage, and the election process mired by our useless campaign finance laws. Both would fall to the whims of the current broken process and could be hijacked by special interests seeking input in the results of a convention. They would also wind up looking a lot like the Legislature, which doesn't go far to renewing confidence and trust in government. So Hill falls on the side of random selection as the "least worst" option.

Pros: Random selection would be the best method for ensuring a representative body; random selection of "average citizens" brings a sense of grassroots legitimacy to the process, which would give the proposals of the constitutional convention credibility with the voters; random selection might be the best process for shielding delegates against special interest influence; random selection has the gloss of being something new and different, never been tried, and therefore may have the greatest potential to capture the imagination of the public and the media.

Cons: Random selection of "average citizens" would not necessarily guarantee sufficient expertise on the part of the delegates. A thorough educational process would be necessary, and it would be important that the educational process for delegates was designed to prevent "capture" by any particular special interest or perspective. The selection process would also need to weed out any delegates who are not are sufficiently committed to participate for many months.

I don't think capturing the imagination of the media is a good reason to do it, but Hill has cited examples of citizen's commissions in New Orleans after Hurricane Katrina, and in New York City dealing with the World Trade Center redevelopment, with fairly positive reviews.

I think where you fall along these lines can be best determined by your theories of government. If you think that the system needs to be gamed for particular outcomes, you probably want an election that would allow the participation of various special interests. If you believe that good government and progressive government are analogous, that an iron-clad structure itself need not be partisan, but just allow the prevailing philosophy of the majority to have sway over the results, you may be interested in a random selection based on demographics (and, I would add, party ID). Right now, we have a progressive legislature and a conservative system, which frustrates efforts at accountability. A small-d democratic system would not only be more fair than the current system of minority rule, and it would not only be more helpful for the voters trying to determine who is responsible for what happens in government, but it would actually be more fiscally responsible. The Two Santa Claus Theory that dictates we can have robust services and endlessly low taxes forces government to resort to borrowing and accounting gimmicks to cover deficits, which lead to larger deficits pushed out to the future. Spending mandates like Prop. 98 haven't even worked to protect school funding - we've become the worst state on spending K-12 under that mandate. A clear set of rules that resists enshrining policy but allows policy to work unimpeded through a framework of government seems to be the best practice here.

Then there's our failed experiment with direct democracy, which brought about many of the constrictions under which current government now labors, such as the crazy 2/3 requirements, which allow the majority to say that the minority blocks their wishes while allowing the minority to claim that they have no power because they're in the minority.

What do I think a Constitutional convention needs to include?

• ending the 2/3 requirements and restoring democracy to the fiscal process over the tyranny of the minority, and returning decisions for spending and taxation to elected representatives
• two-year budget cycles and performance-based budgeting to try and engender a long-term approach
• indirect democracy, where the legislature can either work out the item on the ballot with proponents and pass it through their chamber, or amend items that reach the ballot. In addition, we need a higher barrier for Constitutional amendments and changes to the process of signature gathering.
• any ballot-box budgeting must include a dedicated funding source - "paygo for initiatives"
• smaller legislative districts, either by expanding the Assembly or moving to a unicameral legislature with 150 or more members.
• elimination of the current term limits, the tighest in the nation, with more of a happy medium
• instant runoff voting for state legislative vacancies to speed the process of filling them
• local government gets the local resources they collect without them routing through Sacramento

Those are a few of the things I'd like to see addressed, and I'm sure people have additional ones. The crisis we currently have in California presents an opportunity for new thinking about government and how to manage the largest state in the union and one of the largest economies in the world. Despite the doom and gloom, California retains its vibrancy, its diversity, its abundance. Only the structure under with it governs itself has failed, and that failure has seeped into everyday life. Lifting that structure will be like lifting a heavy weight off the backs of the citizenry. We can lead a path to a better future.

Related - Repair California

The Conservative Vision Of A Constitutional Convention

In the wake of the latest, but by no means the last, budget mess in California, I continue to believe that the only way to break the deeply negative cycle of fiscal dysfunction and budgetary gridlock is through a Constitutional convention that restores democracy and provides sensible, workable government in the state of California. You'll be interested to know that this belief actually transcends party lines. Tom Karako directs the Golden State Center at the Claremont Institute, one of the nation's most conservative think tanks. And even he agrees that the state's Constitution needs to change to better serve the public. I haven't previously seen a conception of what a conservative vision for a Constitutional convention would look like, and so I think it's worth analyzing it to see their preferred options. Karako first says:

If Californians do rewrite the Constitution, it should be revised to resemble more closely the concise federal Constitution: more responsible legislators and executives, stronger control of the bureaucracy and less direct democracy.

Then he comes up with several issues that appear nowhere in the federal Constitution. Here are his six proposals:

1. Part-time Legislature
2. Hard spending cap
3. Two-year budgeting cycle
4. Eliminate the two-thirds supermajority requirement for budgets
5. Unified executive branch
6. Repeal ballot-box budgeting

The first four are either irrelevant to the federal Constitution or in direct conflict to federal Constitutional provisions. But I will soldier on and take them in kind.

Karako clarifies that his vision of a "part-time legislature" would not be a citizen legislature, and would include the same salaries and responsibilities as today. With all due respect, then, we already have this. State legislative sessions, in theory, open in January and end on August 31, and there are numerous recesses in between those dates. The only reason it seems lately like the legislature is always at work is because four extraordinary sessions have been called in the past year and a half to deal with the budget mess. Our legislature works around six months out of the year in less extraordinary circumstances. That sounds part-time to me.

This notion of a hard spending cap has been soundly rejected by the voters twice in the past four years. It is certainly not a feature of the federal Constitution, and it does not take into account emergency spending needs, the outpacing of inflation over wages in areas like health care, and multiple other provisions. States with spending caps have seen their quality of life suffer and their state rankings plummet (see TABOR in Colorado). This would in my view be disastrous, and obviously it's the major bone of contention between liberals and conservatives.

A two-year budget cycle actually sounds prudent to me. I would supplement it with an advisory long-term budgeting benchmark that would bring the concept of long-term planning back into state government, but anything that looks beyond the horizon could improve the quality of state budgets.

Conservatives have begun to relent on the 2/3 rule for passing a state budget, while keeping in the requirement for taxes, for somewhat selfish reasons. I agree that the current system eliminates accountability for both sides of the aisle, and letting the majority rule on these issues would allow the people to decide the results of that course of action. But Karako doesn't take this to the logical conclusion, that a budget is composed of taxes and spending, and that only with a full repeal of both of these 2/3 provisions would we have representative democracy in this state. He wants to hold one party responsible for budgeting while tying their hands on how to go about instituting that budget.

After citing positively how other states have part-time legislatures, and negatively how only two other states require a 2/3 vote to pass a budget, Karako calls for a "unified executive branch" without mentioning that practically no other state has its Governor appoint all additional Constitutional officers. Some states have Governors appoint certain various members, but not the entire slate. This and the next idea show a typical conservative contempt for the will of the people. Democracy, even direct democracy, is not the problem with California. (This "unified executive branch" is also a cover for vesting greater authority in the executive to engage in, as Karako says, "firing and controlling non-elected bureaucrats and public employee unions," or union-busting, in the vernacular.)

And that leads us to Karako's idea to repeal all ballot-box budgeting, where he does not specify between different types of ballot-box budgeting. Those measures with funding sources provide no strain on the budget process because they do not impact the General Fund. Unfunded mandates do represent a problem, and reformers have devised a solution, essentially "paygo" for ballot initiatives, requiring that they include a funding source before presenting them to voters. Karako, instead, wants to repeal all voter-approved measures and place them under the General Fund. I also believe in the indirect initiative, allowing the legislature a crack at either passing a ballot measure themselves in consultation with the proponents, or changing the language with amendments to better reflect current priorities.

On one thing I agree with Karako; "California needs constitutional reform before we can expect sustained fiscal reform." I don't think his ideas hold to his belief in drawing on the wisdom of the US Constitution; however, I do see some common ground, on two-year budget cycles, on the need for democratic rule, on initiative reform. My belief is that a Constitutional convention could bring together the entire rich diversity of the state to discuss, debate and decide on these issues, coming to a decision that will improve representative government in the state. I'll see Mr. Karako there.

Into The Ocean

Among other places, I write at Calitics, the progressive site covering California politics. This is often a punishing experience. Since 1978, Proposition 13 has tilted the very structure of government in an unassailably conservative direction - 2/3 votes are needed to raise taxes, but only a simple majority to cut. As a result, politicians invariably take the path of least resistance, and as the Norquistian right rose to prominence in the state GOP, they learned that they could simply hijack the budget process for their own ends. State leaders compensated with borrowing and various gimmicks to put off the costs until after they left office. Servicing the debt became a bigger and bigger slice of the budget pie. Stakeholders who couldn't rely on the state used the ridiculously easy initiative process to pass unfunded spending mandates for themselves and all sorts of ballot-box budgeting. In good times, this uneasy balance worked... sort of. In even the most mild recessions, it would collapse.

That sets the stage for yesterday's horrendous budget deal, which closes a $26 billion dollar deficit with almost no new revenue, making steep cuts that amount to a reinvention of government's promises to its people, along with the usual gimmickry and a harsh, counter-productive set of raids on local government resources.

A local government official made a comment Monday afternoon, a few hours before the $25 billion deficit deal was reached, that seems to encapsulate everyone's feelings.

"As this budget hits the street today and people look at it," said San Mateo County Supervisor Rich Gordon, "I think Californians are going to say, 'How did we get in this mess?'"

It relies on about $15.5 billion in cuts and $11 billion in, well, other stuff (more on that in a moment).

Almost two-thirds of the cuts are in K-12 education, colleges, and universities (though it also includes a one-time supplemental payment to K-12 and community colleges of $11.2 billion). Other sizeable cuts are in corrections ($1.2 billion), state worker salaries ($1.3 billion in the current furloughs) and Medi-Cal services ($1.3 billion). Welfare assistance, health care for low-income kids, and in-home support services (IHSS) would also see cuts.

Also cut: funding for state parks, though nowhere near the level Governor Schwarzenegger proposed in May. Legislative staffers say a few parks would close, and the ones in question will be picked by the
administration.

In addition, the state will steal borrow $4.3 billion from already strapped local governments, leading to probable bankruptcies and in all likelihood more expenses for the state to pick up. California workers will see an extra 10% of their state withholding taxes taken as an interest-free loan. The state will delay paychecks to state workers by one day, from June 30 to July 1, to push $1.3 billion into the next fiscal year. Governor Robot added non-budget related items like anti-fraud prevention measures to IHSS, so that when you try to access social services, you get fingerprinted like a common criminal. And one of the only revenue producers? A $100 million annual lease for offshore drilling off the coast of Santa Barbara, the first new drilling on the California coast since a massive oil spill in that area 40 years ago.

A lot of this stuff is illegal; almost all of it is immoral. And yet the system is designed to produce bad outcomes. The 2/3 requirement enforces the structural revenue gap, led by the comically low property taxes, in particular for commercial properties (many paying the same rate since 1978). State Democrats have shown no leadership to change the system for 31 years, leading to policies that kick the can down the road, at a higher eventual cost. And Republicans get their wish of drowning government in the bathtub. California is dead last in state spending in almost every meaningful category, and this profoundly damages the state's future.

I have become convinced that the only way out of this is through a Constitutional convention, the enactment of which has been suggested by some who are trying to build a movement for it. This is not a problem of personality but process. We could elect Gavin Newsom, Meg Whitman, Noam Chomsky or John Birch governor, and the structural problems will still be with us. The structural problems are so vast, so widespread, that only dealing with them completely, and returning the state to responsible governance, has any hope of succeeding. It's going to take a long slog, but ultimately, we have to Repair California or else we will continue this long march to nowhere.

California's problem, by the way, is by no means unique. In the US Senate we have a smaller undemocratic threshold, but only slightly so. The minority Republicans are fanatical here, but not so much more than the rump conservatives in Congress. We have almost no state political media, what does exist pushes meaningless bipartisanship masquerading as a solution, and the electorate pays little attention to politics anyway, unless a sideshow like the recall election takes place; not all that different at the national level. California has throughout its history been seen as a bellweather for national economic and social change. As Paul Krugman said in a column several months ago, "This could be America next."

A Lawsuit Challenges The Two-Thirds Rule

It seems thirty years or so too late, but a former UCLA chancellor and director of the MOCA in Los Angeles named Charles Young filed suit against the provision in Proposition 13, passed in 1978, that requires a two-thirds vote in the Legislature to raise taxes. The legal theory behind the case mirrors the theory behind the attempted repeal of Prop. 8 this year, which was ultimately unsuccessful.

The legal theory of the suit, which names the Legislature's chief clerks as the technical defendants, is that when voters passed Proposition 13 in 1978, cutting property taxes and requiring a two-thirds vote for tax increases, it was a "revision" of the state constitution rather than an "amendment."

The constitution allows amendments to be made by initiative petition but allows revisions - generally a more fundamental change - to be made only through a constitutional revision commission or a constitutional convention.

It's essentially the same argument that opponents of Proposition 8, the 2008 measure that outlawed same-sex marriages, made in attempting to persuade the state Supreme Court to void that measure. But the court, which had earlier sanctioned same-sex marriages, ruled that Proposition 8 was valid.

I'm a bit surprised that Young didn't include the single-subject rule in his charges, as the property tax rules and the two-thirds requirement for taxes don't seem to bear much relationship to one another. Of course, that has already been argued before the state Supreme Court, along with the revision argument, equal protection concerns and about a half-dozen other charges, four months after passage, in Amador Valley, and the Supreme Court upheld the initiative. Here's the way the revision argument played out back then.

The California Supreme Court held that although Proposition 13 would result in various substantial changes to the constitution, it was only an amendment because the changes were narrowly tailored to the objective of changing the taxation system. Id. at 228. According to the Court, a change in the voting requirement did not amount to a revision of the constitution. The Court further stated it was not uncommon to have similar voting requirements for financial matters, and that the Proposition would not effect home rule. Id. The Court cited Article XIII, Section 20 of the State Constitution that authorizes the legislature to set maximum property tax rates. Id. at 228. The Court concluded this new article, implemented by Proposition 13, would be no more threatening to home rule than Article XIII, § 20. Id. The Court, while not endorsing the Proposition, did state the initiative process was a direct form of government from the people. Id. Finally, the court held that it would not limit the ability of people, through the initiative process, to achieve such a limited purpose of a new system of taxation. Id.

The Court upheld every aspect of Prop. 13 at that time, and the law has withstood multiple legal challenges over the years. Like with Proposition 8, the Court seems loath to overturn a vote of the people, and now we're 31 years down the road. Of course, this forms the core of Charles Young's argument, that the effects of Prop. 13 are powerful evidence that it is not merely an amendment, but a major revision affecting the lives of all California's citizens.

I'm skeptical that this can get off the ground, but I see little harm in it. And maybe putting Prop. 13 on trial, and laying out the effects in sharp detail, could lead to closing the loophole and building a sustainable revenue base.

Ah, The Good Old Days

Just a précis on budget negotiations today: the Big Five leadership has met over the last couple days, with more heat than light. The Governor remains committed to adding unrelated policy changes into any budget deal, items like changing contributions to public employee pensions, and tightening eligibility and rooting out fraud in programs like in-home supportive services for the disabled, Medi-Cal and Cal-Works. These items will do nothing to affect the current budget numbers, a fact Schwarzenegger has acknowledged, but he continues to leverage the impasse to capture long-sought goals. The Governor also has taken to lying about how these issues suddenly appeared in the negotiations, claiming that "reform issues were very clear" from the start, which is true if you define "reform" as "whatever Arnold wants it to mean." Karen Bass signaled her frustration with the Governor's clear unwillingness to close a deal by inserting unrelated items, boycotting today's meeting and questioning the Governor's figures on what reducing "fraud" would actually reap in savings (and since he's been consistently wrong on this front in the past, it's a good bet). The Governor did concede that suspending the Prop. 98 education funding mechanism would not be viable, but he keeps pushing for the amorphously defined "reform", no doubt because he thinks it plays well with the public (Matier and Ross transcribe that private polls show a jump in Arnold's approval ratings). This speaks more to the Democrats' inability to clearly explain reality than anything else, though Bass gave it a try today:

But Bass said she believes talks have gotten worse, not better. And she publicly blasted the governor for comments he made in Sunday's New York Times Magazine, in which he said he explained why he doesn't go home depressed by budget woes.

"Someone else might walk out of here every day depressed, but I don't walk out of here depressed," Schwarzenegger told the Times. Whatever happens, "I will sit down in my Jacuzzi tonight," he said. "I'm going to lay back with a stogie."

"He said he's happy to just go home and sit in his Jacuzzi every night," Bass said Monday. "I'm very, very concerned about this. He doesn't seem to be concerned that people are getting IOUs, and all he has to do is go out and blame the Legislature."

With squabbling and posturing like this, you'd think I'd agree with the Calbuzz take of why this crisis has dragged on for so long.

The constitutional requirement for a two-thirds vote of the Legislature to pass a budget is clearly the single most important reason why the Capitol is in a state of near-permanent political gridlock. But the two-thirds rule has been around since the New Deal and budgets used to get passed. So what’s the hang-up?

Power: Nobody’s got it.

The governor and the Legislature fulminate and flounder simply because no one in the Capitol in 2009 has the stature, clout or influence to cut a deal like Ronnie and Jesse or Pete and Willie once did.

Actually, the budget has ALREADY been passed once this year, closing a $42 billion dollar deficit. The new $26 billion dollar problem points to the unique nature of the current deep recession. I'd like to see good ol' Ronnie and Jesse and Pete and Willie deal with a $68 billion shortfall in the space of six months.

But beyond that, what is also missing from this analysis is the lengths to which the "big bully" theory of how to manage California government, where Democrats and Republicans get together and "cut a deal," is in a real sense RESPONSIBLE for the problem we now face. Take the assessment of the 1992 budget in the midst of a recession:

Contrast this year’s with the budget meltdown of 1992, the last time California issued IOUs. Although many of the same conditions applied, the big difference was that both Gov. Pete Wilson and Speaker Willie Brown wielded enough political authority to sit down in a room and cut a deal: Wilson took responsibility for rounding up Republican votes for tax increases and Brown for putting a lid on Democratic caterwauling over program cuts.

Somehow the inability of these major players to avoid a situation where IOUs had to be issued gets put to the side. But what Willie Brown did not use that clout to do, what no Democrat has done since 1978's Prop. 13 opened the structural revenue gap enforced by the 2/3 requirement for budgets and taxes, is actually solve the real problem. Instead he cut a deal, relying on a future asset bubble to bail him out again and again, and setting the table for today's crisis.

The 1980s saw the construction of the model. Sprawl was used to provide affordable housing. Special tax systems were set up to pay for suburban schools - the 1982 Mello-Roos Act - which were funded as long as there was enough credit to sustain sprawl. The loss of property tax revenue led cities to shift toward retail, further promoting sprawl (big box stores, malls). The jobs and spending created by sprawl provided enough prosperity to keep voters happy and the politicians in power. For those who were left behind - those living in the city centers, people of color, and the poor - 1978 had been partly about their political and economic marginalization, and the majority of Californians embraced it as part of the deal.

The ideal feature of the centrist system, from the view of its practitioners, is that it apparently neutralized the right-wing revolt of 1978. Low taxes could be paired with preservation of core services, albeit at a slightly reduced level, and thereby avoided another Jarvisite outburst. Well-paid consultants could run statewide TV campaigns to force the public to accept the consensus, without having to do the messy work of engaging a grassroots that would challenge the centrist status quo.

When the system came crashing down in 1991-92, the centrists found it possible to cut a deal to keep things going. Pete Wilson and Willie Brown had much in common, and were able to hammer out a package of tax increases and spending cuts that got a 2/3 majority. I don't romanticize that deal, but instead use it to show that it confirmed to the centrists that the system they'd built in 1980s could withstand crisis as long as everyone was willing to sit down and make a deal, damn the consequences.

However, the right-wing wasn't sleeping. In 1990 they managed to convince a bare majority of voters to approve Prop 140, a radical term limits measure that should have fallen afoul of the "revision" rule. But the real moment of change came in 1994, when the far-right in the Republican Party grabbed control of the agenda and launched a massive attack on Latino Californians. Pete Wilson wholeheartedly embraced the attack, and although it brought Republicans gains that year, it was a victory to make Pyrrhus jealous. Latinos registered for citizenship and to vote in massive numbers, and beginning in 1996 what had once been a state whose politics were fairly balanced shifted massively to the Democrats.

As long as Republicans stood a reasonable chance of winning control of California's legislature or its electoral votes, Democratic deal-cutting with Republicans could be sold to the base as a necessary move to stave off the Jarvisite hordes. But after 1996 this became less and less plausible. The California Republican Party became a captive of the extreme right, even more than usual, and in one of its last acts before leaving power in 1998, pushed through a massive and reckless series of tax cuts.

I don't disagree at all that we currently face a lack of leadership and clout to get deals done in Sacramento. Arnold Schwarzenegger has no role inside his own party, and Bass and Steinberg preside over a dysfunctional set of rule requirements and are term-limited out of gathering political capital. My point is that such leadership has ALWAYS been lacking from the Democratic side of the aisle, at least since 1978. When prosperity waned, it was clear that California's political structure would resist responsible governance at every turn. But instead of preparing for that eventuality by changing the rules, those good old boys of the past cut deals that exacerbated the problem. They forced the current crop of non-leaders into ringing up the state credit card and enabled the right-wing faction that holds a veto over economic policies. The center did not hold - but it could never hold. And the centrists who ruled California in the years after Prop. 13, the timid types who ran away from real solutions and put the state in the position to fail, should not be lauded. They should be ashamed.

Gary Kamiya On The California Crisis

I'm sure many political observers will laud this New York Times magazine article on California's crisis and the men and women who seek to solve it, but I found it oddly pedestrian. The profiles of the candidates reveal little of substance, and aside from displaying the salient fact that Arnold has no interest in the well-being of his constituents, I didn't see the point.

“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.”

Overall, I saw too much focus on personality in dealing with what is essentially a problem of process.

Actually, while I didn't agree with all of it, I thought Gary Kamiya had a much smarter take, and it didn't mention Arnold Schwarzenegger or the names of any of his potential replacements more than once. The headline, "Californians are sinking themselves," doesn't seem to match the bulk of the article, which focuses on the dysfunctional governing process.

The immediate source of California's financial problems is a lethal combination of ideology and rules. It is deeply politically divided, and its governmental mechanisms are completely broken. Bay Area leftists stare at Orange County conservatives across an unbridgeable abyss; a large and potent group of anti-government libertarians faces off against an equally powerful group of pro-tax, proactive government liberals. If California, like most states, required only a simple majority to pass its budget, the disagreements between these camps could be worked out; after all, the Democrats control the Legislature. But California requires a two-thirds majority, which gives the GOP, now dominated by anti-government, anti-tax ideologues, veto power over the process. The result is deadlock.

Compounding this problem is California's notorious initiative process, which allows voters to bypass the Legislature and place initiatives directly on the ballot simply by gathering enough signatures. The initiative process was originally passed by voters in 1911 to circumvent the power of the oligarchic railroad trusts by restoring direct democracy. And it still offers citizens a chance to take control of important issues. But it has gone out of control, abused by powerful interests who hire people to collect signatures and ram through bills that no ordinary citizen can be expected to comprehend. By sidelining elected officials, it achieves the worst of both worlds: It gives ordinary citizens, who lack requisite expertise, institutional memory and accountability, too much power, and then forces legislators to clean up their mess -- except that because of ideological gridlock and the supermajority requirement, they can't.

Kamiya looks at the three strikes law and in particular Prop. 13, which he views as the ultimate manifestation of the Two Santa Claus theory, that California can have endlessly lower taxes with endlessly more social services.

This was, in effect, a mass outbreak of cognitive dissonance, an up-yours delivered to government with the public's left hand, while its right hand reached out for Sacramento's largesse. Now, 31 years later, the bill has finally come due. There is no free lunch. If you want good roads, parks, decent schools (California's schools, once the best in the nation, are now among the worst) and adequate social services, you have to pay for them.

Out of this, Kamiya points his finger at the people who voted in Prop. 13 and failed to modify it over the ensuing 31 years, who are "self-centered" and have "not decided what it thinks about the New Deal, or government itself." They need to "grow up," Kamiya says.

I think this ignores the fact that Californians have traditionally been offered precious few choices to rectify the broken system. The Democratic Party essentially has made a pact with themselves to nibble around the edges for three decades instead of confronting the great unmentionable crisis of governance. People see the dysfunctional politics play out year after year and become rightfully disaffected with the system. And they are never told anything from anyone in a position of power to counteract the Two Santa Claus theory, and so they necessarily believe it. I don't blame citizens for responding to their leaders. The problem lies with the leadership itself, or more to the point the lack thereof.

I was 5 years old and on the other coast of the country when Prop. 13 was passed, and I'm not about to bear the brunt of the blame for that decision. I would blame myself if I continued to live with the failure of the political leadership to confront the root causes. But Californians are starting to use movement politics to go around the leadership and force the necessary solutions. The sheer enormity of the problem and the size of the state makes this a difficult option. But the alternative, to acquiesce and wait patiently for the leadership to figure things out, is unthinkable.

The Inevitable Tax Drop

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.

P.S. You'll be thrilled to know that Schwarzenegger still sleeps well at night.

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.

The Search For An Endgame

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.

I cannot disagree with Greg Lucas' analysis.

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.

Republicans Refusing To... Cut?

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.

A Tale Of Two Polls

Dan Walters is touting a UC Riverside poll on budget issues that interviewed 276 respondents, 63% male, with a 42-38-11 split among Democrats, Republicans and independents. He does this with a straight face.

It barely matters what such a flawed poll shows, but I'll mention it anyway. According to 276 people, 57% support the 2/3 requirement for passing a budget, 24% preferred a simple majority, 6% in between, 4% other (?), and 6% don't know. Given the bad methodology, these numbers mean nothing.

But I'll tell you who has historically taken numbers like these as the gospel's truth and used them to mute themselves about any reform efforts for thirty years. That would be the leaders of the California Democratic Party. And they latch on to any poll numbers showing a view like this as a blunt instrument to kick hippies, not a starting point for the political advocacy and opinion leadership that can and should be done to change perspectives.

Meanwhile, the David Binder memo, with ten times the poll respondents and a clear majority favoring a broad swath of tax increases over spending cuts to deal with the deficit, goes unmentioned by virtually everyone in this state. And in that desert, voters go vainly on a futile search for leadership. They find nothing but shell-shocked politicians.

Jarvisism - A Tale Told By An Idiot

George Skelton has a punishingly absurd column today. He has in the past recognized that Prop. 13, and more importantly the Trojan horse of the 2/3 requirement for revenue hikes embedded inside it, has foisted much of the problems upon the state that it now faces. He recognizes that again here. But he then goes on to suggest that Arnold Schwarzenegger should take the attitude of "born-again tax cutter" Jerry Brown and treat our current "tax revolt" (which he takes as gospel from the results of last week's special election) by slashing services for all manner of struggling Californians. Skelton hints at a tactic of merciless cuts as a means to show the public the painful reality of Howard Jarvisism, but really he just sort of agrees with the conventional wisdom, which he plays a role in setting, that the voters rejected tax increases of any kind and now the Governor must do the serious thing of cutting all manner of state spending.

Let's take a look back in time and be clear about who's driving this conventional wisdom. California's political observers have been stuck in a post-June 1978 mindset for the past thirty years, scared to death of the terrifying spectre of Howard Jarvis, himself a bundle of contradictions. He was a Mormon who drank vodka. An anti-government crank who nonetheless ran for US Senate and Mayor of Los Angeles. A supposed defender of homeowners when at the time of Prop. 13 he was employed by the Los Angeles Apartment Owners Association. Jarvis was a liar and a fool. In the ballot argument for Prop. 13 in 1978, he claimed that school funding would not be affected by the amendment, and responded to the possibility of library services being cut by saying that "63 percent of the graduates are illiterate, anyway.” He had a disdain for the average Californian, and probably took up the mantle of property tax revenue caps after seeing his home at 515 North Crescent Heights Boulevard in Los Angeles increase in value from $8,000 to $80,000 in 35 years.

Prop. 13 addressed one specific problem - property tax assessments were growing faster than wages. But grafted onto the measure designed to slow down that growth were a series of proposals - shifting the balance of power from local to state government, capping commercial property with residential, and establishing the 2/3 requirement for revenue - that have gradually but steadily eroded the quality of life that previously made the state the envy of the nation and the world. In 1978 the state had enough of a surplus to paper over the immediate effects of Prop. 13. The measure was practically designed to drain that, and put an end to effective governance in the state. Today, businesses and homeowners benefit from public investment in infrastructure - sewers, roads, electrical lines, freeways, mass transit - without having to contribute to the improvements. And to get a true sense of how that attitude of, basically, selfishness, can be traced back to Jarvis himself, read this flashback from the 1979 budget crisis, and the anti-tax champion's march on Sacramento.

Into the volatile political atmosphere parachuted Howard Jarvis, the irascible co-author of Prop. 13 and the cranky embodiment of the tax cut movement. Jarvis and his posse came to Sacramento on June 7, the one-year anniversary of the measure; 30 years later, the episode offers a look back in time at some hints of what was to follow.

Jarvis, a burly and profane spud of a man, had come to deliver 150,000 computer-generated letters sent by tax-cut supporters to warn the Legislature, “We’re not going to let anybody get away with a new plot to circumvent Proposition 13.”

One target of his ire was Assembly Bill 8, which radically restructured California’s system of public finance and sent $5 billion from Sacramento to local jurisdictions. Still in effect in 2009, it cast the framework for many of today’s structural budget problems, by putting the state in the permanent business of financing schools, cities and counties.

Surrounded on the east steps of the Capitol by dozens of boxes containing the letters, Jarvis accused then-Speaker Leo McCarthy of a “plot” to undercut Prop. 13, and got into a beef with a reporter who asked him to be specific about the alleged conspiracy.

As a daily report of the incident had it: “Jarvis snapped angrily: ’I’m not going to list all of them. I don’t carry the bill numbers around in my pocket.’” [...]

As Jarvis spoke, a group of mothers who’d come to Sacramento to lobby for more spending for pre-schools began shouting at him: “What about the schools? They’re ending programs to help,” a woman from Azusa hollered.

“That would be your problem, not mine,” Jarvis yelled back. “It’s absolutely not so. Prop. 13 didn’t have any effect on the schools at all.”

Jarvis then walked into the Capitol, where he and his backers dropped off boxes of letters in legislative offices. All went well until he called on Assemblyman, later Congressman, Doug Bosco, who was meeting with a county supervisor and three fire chiefs from his district.

“We were discussing why there isn’t enough money to put out the fires,” Bosco said later. “In walked Howard Jarvis and I said, ‘Good, you can explain it to them.’”

“Jarvis insisted that reduced property tax revenues allowed by Proposition 13 were more than sufficient to finance essential services,” a future Calbuzzer reported. “When the chiefs asked Jarvis what specific cuts he proposed, he told them, ‘that’s up to you,” which set off “a heated exchange that lasted 10 or 15 minutes before Jarvis left…in a bit of a huff.”

“A short time later, Jarvis wandered by Governor Brown’s office, where he received a considerably warmer reception.”

Howard Jarvis had no interest in governing and even less interest in people. He treated budgeting only in the abstract, without detail and certainly without any projection of a human face on the consequences of his actions. He was a miserable, selfish old coot.

Only in California can this man be transformed from guy-shouting-at-the-end-of-the-bar status into a figure worthy of any respect, both by politicians like Jerry Brown and the political media. The assumption is that he led this grand movement that persists to this day, but his stature only remains because so few dared to challenge him on the basic facts. We have a government with the structural architecture of that selfish old man, but a population that simply doesn't think that way. Yet nobody has the courage or the leadership to actually point out that architecture, the main stumbling block to returning California to anything approaching fiscal sanity. Howard Jarvis, like a headless Ozymandias statue surveying a wrecked land, became a king because of the vacuum of leadership into which he stepped. His reputation is unassailed, and we are all poorer for it.