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.

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.

Budget By Sunrise

Maybe you've been following along at Calitics, but if you haven't, the Senate essentially passed all of their budget bills, albeit with difficulty, and adjourned a session that started last night around 7:30pm at 6:16 this morning. The Assembly is still working through some of the final trailer bills, including the local government raids and the offshore drilling proposal at Tranquillon Ridge. Here's an incomplete roundup from the LA Times.

The worst elements of the bill were passed while everyone was asleep. They must be very proud of their work.

And of course, this is a rolling, perpetual crisis. Dan Walters is correct today when he says that the state now operates on 5-month budget cycles.

There have been some discussions about shifting to a two-year budget cycle to ease the one-year cycle's tight – and usually unmet – timetable. In reality, though, the state has shifted to a five-month cycle, with the latest version of the budget, which was undergoing the dreary drill of adoption Thursday night, being the latest example [...]

If the five-month cycle holds true, the deal's deficiencies will be acknowledged in October, when the state must redeem the IOUs it's sending to creditors. And then legislators will return to Sacramento to be entertained by lobbyists, plug the new holes and collect about $1,200 a week in tax-free per diem checks.

In January, the governor will propose a 2010-11 budget and the game will begin again.

It's as much that they cannot fathom the extremity of the real budget problems as that the cumulative effect of kicking the can becomes greater with every kick. Of course, there's a way out - you could reduce useless tax breaks to corporations and increase revenue. But that's deeply unserious and verboten.

If ever the need for a Constitutional convention to fix the broken system in Sacramento has become clear, it's now, when 40 years of progress has been reversed in the dead of night.

Exclusive: Mark DeSaulnier Voting No on "Most" Of The Budget

I interviewed Sen. Mark DeSaulnier just a few minutes ago for a series on CA-10 candidates. But I took the opportunity to ask him about the budget deal. Un unusually blunt and what I would characterize as irate language, DeSaulnier blasted the budget and the process that created it. "It's all awful," he said. "On a majority-vote level, with votes that require a majority vote, California still leads the nation. But on a fiscal level, we're living in the Dark Ages. The system is completely dysfunctional and maybe the only good thing is that people will finally see the kind of change we need. Sadly, too many people are still in denial about that change. But we can't go on like this. It's just a mess."

DeSaulnier thinks that the economy is unlikely to change dramatically to bail out this budget, and it will take a long time for General Fund revenues to get to a point to pay off the money borrowed from education. And so we'll remain in this dark place for some time.

The Senator is carrying a bill in the legislature to put together a Constitutional convention, and he is "more convinced than ever" about the need for it. He believes that, after the budget is put the bed, there is an urgent need, recognized by the leadership, to turn completely to reform. Sen. Steinberg has said to him that the message will be nothing but change, change, change. And the caucus wants to work, whether through a revision commission or reforms that could be put together with majority support, to do a "Constitutional convention in the building." Unfortunately, DeSaulnier said, everyone on both sides of the aisle immediately goes to the worst-case scenario of a convention, thinking that their gains and protections will be lost. But that's no excuse. DeSaulnier hoped he could get with Republican leaders like Sam Blakeslee to find common ground on a few reform issues, but he's not sanguine about those choices. "They're individually good people, but put them together and they're a cult, not a party. Milton Friedman's dead, move on."

When I asked what he would vote for on Thursday, he said "I will probably vote against most of it." DeSaulnier singled out two pieces that could not get his support: the offshore drilling in Tranquillon Ridge, and the raid on local governments. On the drilling, he doesn't understand why Democrats would approve such a proposal for a paltry $100 million dollars in this budget year. "I don't know why the Governor would do that. Whatever environmental record he claims to have will go down the tubes. I never thought he was particularly green to begin with, he tried to slow-walk AB32 and all sorts of environmental initiatives. He's the worst Governor in state history, just like George W. Bush was the worst President in history.

On the local government raid, DeSaulnier said that as someone who came from local government, he could not see clear to essentially bankrupt them. Those takings don't take place until December, according to him, so he would rather get the LAO involved, score the kinds of tax credits at the local level, things like enterprise zones that don't work and other giveaways to corporate interests, and suspend them to make local government whole. I think it's an interesting strategy, though I don't know if it could succeed. Tying it to local government needs is smart.

And by the way, the crazy redevelopment money scheme, to borrow against those future funds and securitize 10% of property taxes for 10-20 years? DeSaulnier called that "insane" and "illegal," and just a shadow play by Republicans "so they can go back to San Diego and Riverside and say they tried to save their local money and failed."

DeSaulnier has an election coming up, and thus an incentive to take a bold stand. But this is pretty darn bold. And if there are enough Democrats to go along with him, Republicans may indeed be forced to own this budget.

Should CA Progressives Challenge Members To Vote Against The Budget?

What I'm hearing from grassroots progressives in this state is basically unadulterated anger at the craptacular budget deal passed. If they're not out in the streets they're calling representatives and finding every opportunity to make themselves known. Karen Bass posted a statement on her Facebook page about the budget deal and it has been hammered by critics. Some negative comments have been deleted. I'm getting practically an email a minute from some progressive group or another talking about stopping this budget.

I think what we have here is, to analogize, a union shop steward bargaining without the support of its rank and file. Whether that will matter to the legislators who vote on this on Thursday is unclear. But if you took the pulse of the activist community, they would argue for one of three things:

(1) send the leadership back to the negotiating table with the mandate that this deal isn't good enough.
(2) send new leadership back to enforce that message, fire Steinberg and Bass
(3) only agree to a deal if Republicans ensure every one of their members will vote for it, so they can own the policy

I don't want to really speculate on what will happen. But I can pretty confidently say that the movement which has become engaged over this budget fight will not be likely to shut up if the Democratic rank-and-file goes along willingly with the leadership and votes this budget into law. They will want to fight and it will probably be those same rank-and-file lawmakers that bear the brunt of it, perhaps even with primary challenges.

As I've said repeatedly, the current structure of government in the state is designed to produce bad outcomes. We can get mad about it, we can mourn the real suffering this will extend throughout the poor and middle class, or we can organize. And the desired end state, IMO, is not just to get a marginally better near-term budget, with maybe an extra billion for an oil severance tax here, or a reduction of borrowing to local governments there, but to get a far better structure inside of which to run government responsibly. I don't think that can possibly end with a fight on this budget, though it may begin with it. Because at some point, progressives do need to reject being taken for granted.

Anyway, thought I'd open it for discussion.

...here's Dave Johnson arguing for option #3, which I think is among the best practices. We have this assumption that any deal must be voted on by all Democrats, with just enough Republicans for passage slinking along. That's not etched in stone.

In addition, let me remind everyone that this budget does NOT require a 2/3 vote. The budget has already been passed; revising it requires only a majority. However, that means it would take effect after 90 days, and only a 2/3 vote will allow it to take effect immediately. Obviously, delaying by 90 days reduces the savings of the deal. But we're probably coming back to this soon enough anyway. And without all Republicans in support, I think you have to allow some Democrats to vote their conscience.

(In addition, budgets are voted on in various multi-bill packages, so any one vote could go down as well. That could be a consideration.)

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."

Get The Circus Out Of Town

The latest Big Five meeting is underway, and we could see a yay deal as soon as tonight. Digby, who I'm lucky enough to call a colleague over at Hullabaloo, has a great post about the budget debacle and the collective lack of perspective in politics. She references the 2003 special election freak show and how the media became seduced by marketing and reality-show gamesmanship into cheering on the "Who Wants To Be Governor Of California" spectacle (side note - I actually almost worked on the actual "Who Wants To Be Governor Of California" TV show produced at the time by Game Show Network). And while turning the recall into a game, everyone forgot about the insanity of the associated issue:

The "issue" that supposedly precipitated this little tantrum was the required restoration to earlier higher rates for car registration, brought about by a weakening of the economy. The media went wild, even friends of mine who know absolutely nothing about politics pretended to be enraged that they would be forced to pay $30.00 more a year and they all went out and voted to recall the Governor and replace him with The Terminator.

That recall was a political sideshow of epic proportions, featuring porn stars, Gary Coleman and even Arianna. It was great fun. Standing in line to vote that day -- the longest line I'd ever experienced at the ballot box --- was like being at an American Idol party.

But check it out. In an otherwise terrible George Skelton column, he does make one interesting observation:

Schwarzenegger had campaigned full throttle against Gov. Gray Davis' "outrageous" raising of the vehicle license fee. His favorite stunt was using a wrecking ball to smash an old jalopy that symbolized the tax.

Davis really had only bumped the fee back to its historic level: to 2% of a vehicle's value, rather than a recently enacted 0.65%.

Schwarzenegger's canceling of the fee hike actually amounted to the single biggest spending increase of his reign. That's because all the revenue from the vehicle license fee had gone to local governments, and Schwarzenegger generously agreed to make up their losses by shipping them money from the state general fund.

The annual drain on the state treasury was $6.3 billion until February. Then the governor and Legislature raised the fee to 1.15% of vehicle value, saving the state $1.7 billion. But it will revert to its lower level in two years.

Cutting the car tax plunged the state deeper into debt just as Schwarzenegger was taking the wheel. To cover it -- at least temporarily -- the new governor went on a borrowing binge. It didn't take much to persuade the Legislature and voters to authorize $15 billion in "economic recovery bonds."

Passing those bonds and a companion spending "reform," the governor promised, would mean "no more deficit financing." They'd live within their means. Sacramento would "tear up the credit card and throw it away."

The only thing thrown away was all the bond money, spent long ago on daily expenses -- the equivalent of borrowing to buy groceries.

I'm not saying the car fee issue is the reason the state is currently in chaos. It's far deeper and more complicated than that. But I do believe that the simplistic, downright silly approach Americans take to politics is largely to blame. It long ago became more about marketing and entertainment --- and preening, shallow self-gratification --- than serious consideration of responsible governance.

I would be remiss if I didn't total up the $6.3 billion a year in lost revenue from the vehicle license fee, along with the interest on those needless economic recovery bonds, and note that the total is surely more than the current budget deficit or even the last two combined.

But Digby's main point is correct. When the media in this state bothers to pay attention to politics, it's as a freak show, and they ascribe the same kind of reporting available in the sports section rather than give anyone the information they need to make serious choices about what kind of state they'd like to live in. The so-called "car tax" was the kind of populist pitchfork-fest that was perfect for Schwarzenegger, and he repeated enough movie quotes and manipulated enough emotions to prevail. Along the way, almost nobody challenged the thesis, nobody provided the truth about the VLF, nobody slid the debate from the zaniness of the recall - porn stars! - into the serious business of a government that works.

Digby thinks that "we are going to have to reform more than the state constitution to fix things. We need to reform politics itself somehow, convince people that it isn't American Idol or the World Series, or the ruling class will always be able to afford to put on a show whenever they need to manipulate the folks and the folks will probably fall for it." And I agree with that to an extent: for one, the system cannot be reformed without a responsible citizenry understanding the reasons why. But I'm enough of a goo-goo to believe that enough people can become energized by taking back their government so that the seriousness and the structure will be injected back into California's system. That's why I believe sweeping constitutional reform is in the end the only option - because a status quo system will only empower the types of shenanigans that brought us both the Governator and hundreds of thousands if not millions of residents left with no help and no hope. To get the circus out of town, we must offer an alternative to the sideshow that is our government. If enough of us wish to be a laughingstock no more, it can be done.

Schwarzenegger Admits That California Is Broken

As David Atkins discusses today, the decision on Prop. 8 by the State Supreme Court basically elevates the people as a Fourth Branch of government that cannot be countermanded by the judicial branch, no matter what their whims decide. The Court said, "the system may be broken - depending on your perspective - but that's the system we have, and we're powerless to do anything about it."

Thoughts at this point turn to the need for a transformation of this Constitution, to restore the balance of representative democracy, with a judiciary enabled to determine Constitutionality, with a legislative branch given their mandate by the people to reflect the popular will, with an executive secure in his or her role. While I do not believe that "the people" should be endlessly demonized for the options they have been given by a flawed process, I do believe that the verdict has been delivered on this form of government, and delivered as a failure. In an extraordinary discussion unrelated to the Prop. 8 case, the Governor today basically admits California is ungovernable even while vowing to follow the "will of the people," a will which he fails to properly define. Most of the rant Arnold made today involves him whining that he's not allowed to be a dictator. But some of it is brutally revealing.

Gov. Arnold Schwarzenegger considers himself a glass-half-full guy, and he ended his California Small Business Day speech in Sacramento with a dose of optimism. But it seemed clear the governor has just about had it with California's governance system, especially after last week's special election was a colossal failure. Though he blamed many of the state's budget problems on the current economic collapse, he said part of our woes are "self-inflicted."

"California hasn't had a responsible fiscal system since Earl Warren in the late '40s and early '50s," he said.

The governor ticked off a number of complaints about the system this morning:

• The state relies too much on personal-income and capital gains taxes.
• The state doesn't have a spending cap, nor a "rainy-day fund" (the latter point is questionable given that Schwarzenegger asked voters to establish a "rainy-day" reserve in 2004, albeit one with weak restrictions).
• Federal judges tell California how to run its prison health-care system.
• Federal stimulus rules restrict how California can cut from its budget.
• California requires a two-thirds vote to approve the budget.
• An "endless list" of ballot-box budgeting requirements, including Propositions 13, 42, 49 and 1A, all of which he has championed in the past.

"Until we fix our system, nothing will ever change," Schwarzenegger said. "This is no way, of course, to run a state."

He's crying about "federal judges" who merely enforce the Constitutional right of prisoners not to be allowed to die as a cause of their incarceration. And the federal stimulus rules don't restrict a damn thing, they merely require a certain threshold of service to qualify for federal funds. Waah waah waah. But the last two are truly amazing. Schwarzenegger ADMITS the two-thirds rule has completely hamstrung government, and that "an endless list" of ballot-box budgeting have distorted the balance of power in California. Prop. 49 is the after-school program initiative that SCHWARZENEGGER HIMSELF put on the ballot prior to his tenure in office.

Arnold's press people tried to walk this back today, but this was a Kinsleyan gaffe where he made the mistake of telling the truth. Schwarzenegger has always wanted to claim to know the will of the people, and he pretty much got it right when he let his guard down today - Californians want a functional government with a basic level of services funded equitably, and they want lawmakers to do the job they were elected to do. "The people" are a Fourth Branch who want no part of being elected or serving.

The next batch of gubernatorial wannabes have a mixed record on Constitutional reform. Some reports claim that they are more interested with the rhetoric of change than offering anything specific and incurring the wrath of the unelected Fourth Branch. If in fact candidates run in this fashion, they will discover an electorate actually more interested in solutions than mantras, more interested in fundamental reform than careening along this unsustainable path. And 19 months later, when one of them sits in the office in Sacramento and actually looks deeply at the situation in which they find themselves, they'll have wished longingly for a whole raft of specific reforms they could implement right away. Because otherwise, they will sink under the weight of a top-heavy, broken governmental system.

In The End, Just The People Left

The hopes of receiving loan guarantees backed by the federal government to help California secure borrowing to cover short-term cash issues dissipated the moment the media started calling something that wouldn't cost the government a dime a "bailout." With Democrats essentially mimicking their Republican counterparts and the rhetoric of a fiscal reckoning predominant, a solution based on massive program cuts and eliminations appears inevitable to everyone in Sacramento. Only regular citizens - the same ones demonized by elites for daring to vote against what elites call "their own interests" - hold legitimate interests in stopping the drive to cut our way out of this crisis. Students in Los Angeles are holding walkouts over proposed firings of teachers. The families who would be most directly hit by canceling programs like Healthy Families (California's SCHIP), CalWorks (serving poor families) and Cal Grants (student grants-in-aid for college) are speaking out about the real-world effects of those cuts. And a growing movement of activists from across the political spectrum are looking to the future by trying to turn this crisis into a tipping point for a Constitutional convention to get the state onto a sounder fiscal course.

The silence from the political leadership on these fronts is deafening. And yet, absolutely everyone knows the remedies to perpetual crisis and long-term dysfunction, remedies that too rarely cross the lips of leadership so that such opinions could actually make it to the minds of the electorate. Evan Halper today provides some relief in this desert with an oasis of an article, explaining in clear language exactly what steps can be taken to transform California into something other than the failed state it is. I don't agree with all of it - Halper asserts that the richest 1% of the state contribute half of the income tax, which is simply a function of inequality and frankly irrelevant; he leaves out that the effective tax rate for the top 1% (around 7% of income) is LOWER than that for those with the state's lowest incomes (around 11%) - but it's still worth reading. An excerpt:

The oft-cited waste and abuse is a problem, but the deficit is bigger than the entire state bureaucracy.

California could fire every state employee -- including well-paid prison guards and university professors -- close every government office, stop all travel and even cease the purchase of paper clips without closing the budget gap. The government would be gone but the deficit wouldn't [...]

The runaway spending is caused largely by an ever growing group of Californians making use of basic state services as the cost of those services escalates. Since Gov. Arnold Schwarzenegger took office, for example, the amount the state spends on Medi-Cal health insurance for the poor has grown more than 40%, from under $10 billion annually to more than $14.4 billion. Spending on community mental health services has nearly tripled, and the state's program that provides services for the disabled leapt from a $1.6-billion annual expense to nearly $2.4 billion.

This has happened despite efforts by the state to contain costs. Primary care doctors, for example, are paid just $26 for an office visit with a Medi-Cal patient. There is no simple way to seriously limit these healthcare costs short of eliminating the benefits for hundreds of thousands of Californians.

Halper's five steps - updating the tax structure, eliminating the 2/3 rule, reining in citizen initiatives, building a real rainy day fund and instituting a performance review - are a mixed bag IMO, but they take a legitimate, serious approach to reforming the governmental structure, coming from the position that the current system is exactly how not to run a state. Regardless of these solutions, a debate on which we can and should have, that viewpoint makes me hopeful. I believe people are starting to understand the intractable nature of the current process, a thought echoed by Jean Ross in her special election post-mortem:

So why do I believe that the May 19 results can be viewed as a triumph of hope over fear? I spent the better part of the last two and a half months traversing California, talking about the budget, the special election, and California’s future. From San Diego to the North Bay, I spoke before diverse audiences ranging from Orange County PTA activists to Silicon Valley community leaders, from philanthropists to East Bay nonprofit leaders and community organizers in Los Angeles. While California faces tremendous challenges — the worst economic downturn in the post-World War II era and budget crises that show little prospect of abating — I found a new level of interest, concern, and commitment to building a better future for all Californians.

While I am not going to argue that the thousands of individuals that I met are a representative sample, they do represent the best that the state has to offer. Parents who volunteer to improve the quality of their children’s schools and public education more broadly; nonprofit service providers who struggle in the face of tight budgets and rising demand to care for the state’s most vulnerable; and interested voters who got up early or stayed out late to learn the about the state’s finances, how we ended up in the mess we’re in, and how to get out. Almost universally, I met voters deeply dismayed by, but profoundly interested in fundamentally addressing, the state’s budget challenges [...]

In the midst of all this doom and gloom, I found an underlying sense of optimism. The afterglow of the November election has brought new activists to the table and rekindled a belief that change is possible. There is also a sense of realism and an understanding that tough choices lie ahead. The ambitious federal efforts to stem the economic downturn, stabilize financial markets, and rein in the excesses of private markets are beginning to help voters see government as a solution to, rather than the cause of, economic malaise.

Our leaders have failed. Our people have not. In fact, they're just getting started.

De-Mythologizing

Via OC Progressive, Assemblywoman Noreen Evans, Chair of the Budget Committee, spells out slowly for everyone the structural problems and false assertions about the California budget process. If you have non-political junkie friends who want to understand this in a quick and easy way, pass them this link.



This is a very good place to start. Evans puts the lie to three big myths about California:

1) The "runaway spending" assertion. Um, no. Population and inflation accounts for 68% of the increase. I LOVE how Evans cites the tough on crime sentencing laws as a key element of over-spending, in this case on prisons (20% of the inflation and population-adjusting spending increase). Ballot-box budgeting with no dedicated funding stream (separate from the initiatives voters stopped lawmakers from raiding yesterday, which have funding sources) also contributes to the problem. And there are the prior tax cuts like Prop. 13 and Arnold's VLF cut (which would have filled this ENTIRE current deficit). To cover for this we sell bonds and now have to pay out interest to service that debt. The problems beget more problems, and necessitate more cuts because the conservative veto resists taxes.

2) There's all these "waste" in the budget. Again, no. The Performance Review of 2004 found virtually nothing that would save the state any real money.

3) It's just all that messy partisanship from both sides. No. The Democrats have made $40 billion in cuts over the past several years. The Norquistian Yacht Party won't budget because they don't have to. Evans details the 2/3 requirement and the conservative veto, and cites Norquist himself!

Seriously, pass this to your friends. Facebook it and Twitter about it. If you internalize these concepts, the solutions are obvious - we need to restore democracy and give our elected officials a budget process and a Constitution they can actually navigate.

And while we're at it, let me debunk one other myth. The one that says all California has to do is sell San Quentin and all that surplus property and save the state. Well, the money raised from selling state property would not be able to be used to balance the budget.

Under the terms of Proposition 60A, approved by voters in November 2004, proceeds from the sale of any state surplus property can only be used to pay the interest on $15 billion in budget-balancing bonds sought by the GOP governor and approved by voters in March of the same year.

Once the bonds are paid off – the Legislative Analyst estimated at the time that cash from the sale of surplus property would speed retirement of the 30-year notes by a “few months” – sale proceeds would be deposited in the state’s reserve account for emergencies.

Oops.

CA-10: Field Clearing For DeSaulnier

Tom Torlakson took himself out of the running for the seat that will soon be vacated by Ellen Tauscher, and in the process he endorsed his friend Mark DeSaulnier:

Assemblymember Tom Torlakson, D-Antioch, said today he will continue his campaign for state schools chief and not run for a congressional seat currently held by Rep. Ellen Tauscher....

In making the announcement, Torlakson, who has held elective office in Contra Costa County for 30 years, said he would endorse Senator Mark DeSaulnier, D-Concord, to succeed Tauscher....

"The East Bay has been fortunate to have been served by Congresswoman Ellen Tauscher the past 12 years, and I wish her well as she prepares for this important new position with the Obama Administration," said Torlakson. "Mark DeSaulnier is the best person to continue her tradition of strong and effective leadership in Congress. He has the experience, intelligence, and character necessary to represent the residents of the district. I am pleased to endorse him and offer my full support for his upcoming campaign."

DeSaulnier isn't the most vocal member of the state legislature, but he is the chair of the Senate Labor Committee, and has been talking about the urgent need for reforming the insane state budget process since last October, including through a Constitutional convention. He's been a reliably good Democratic vote at all levels. Based on what I've been hearing, the unions are ready to line up behind DeSaulnier and they have a decent amount of fundraising power in this district.

Can we do better? In a shortened election cycle, I don't know. It's pretty clear to me that DeSaulnier is better than Joan Buchanan. I would rather see someone not in the legislature for the selfish reasons of having to pass another budget deal.

...CapAlert is floating Brent Jones as a candidate, which apparently is a tradition in this district stretching back to when he was still with the 49ers. Na Ga Happen.

Does The Next California Governor Matter?

Several weeks back, during the deepest throes of the budget crisis, I wrote that the problems of the state are not a matter of personality but process, and you can reason that out to understand that a change in the personalities without a concurrent change in process will accomplish absolutely nothing on reforming the state and getting a functional government again in California. This thought occurred to me again last night, as I sat in the press section during Gavin Newsom's "conversation with California" as part of his tour of the southern part of the state. Newsom's description of the challenges the state faces - and his solutions - gear more to the idea that a different person, dedicated to solving the same problems in a new way, can overcome any obstacle, rather than the reality that no individual under the current system of rules could possibly thrive. And while the San Francisco Mayor shows a recognition of the structural impossibility of California, his relative nonchalance about how to reform it shows he believes for more in himself to overcome the rules than the demonstrable history of the rules overcoming everyone in their path.

First, let's be clear that Newsom is running with someone else's platform. The first policy mentioned last night as a reflection of his record is the Healthy San Francisco effort toward universal care for the uninsured in his city. That is not his plan to tout, and the simultaneous description of it as a savior for the state's residents while cutting $100 million dollars from the city's Department of Public Health and programs aimed at the needy is nothing short of troubling.

"It's not that Healthy San Francisco is wrong its the mayor's obvious ..." (Tom Ammiano) pauses. "Look, he's running for governor and taking full credit for it. It's not true. The labor community, my office, community activists, health people -- some of the same people who are unhappy with him now -- worked with him on this. When he goes out there and claims full credit, that pisses people off, especially people who are dealing with [health care in the city] every day. ... The reaction is really based on the mayor boasting and overselling Healthy San Francisco." [...]

"Healthy San Francisco -- I think people should be very proud of it. I think it's going to meet its full potential. The rollout is going to be incremental and there's going to be little tweaks that it needs. But, you know, that's not the target [...] Unfortunately, it's getting tainted because of the mayor's boasting and overselling of it."

The neighborhood clinics at the heart of the Healthy San Francisco plan are at full capacity while funding is being slashed, and additional "woodworking" - residents coming out of the woodwork to seek services. The revenues aren't meeting the expenses, and the General Fund of the city, now facing a $590 million dollar shortfall (less per capita than Los Angeles'), has to make up the difference. As the economy continues to slow and the ranks of the unemployed swell, those at the bottom of the income ladder are already seeing service cuts. I would simply call it bad politics to put so much emphasis on a program you can barely claim ownership to and are cutting funding for at the same time as more services are desired. And this is sadly part of a pattern of the whole story being left out.

But let's set aside the issues for a moment. As focused as I am on process, I awaited Newsom's response to the inevitable questions about budget reform. He asserted support for a 50% + 1 threshold for the budget process, using the line "You need two-thirds of the vote to pass a budget, but only a simple majority to deny civil rights," referring to marriage equality. It's a good line, but he leaves out that he was shamed into changing his position after the initial proposal for a 55% threshold was slammed by just about everyone. The first instinct was to half-ass reform. There was also no explanation that there are two thresholds requiring two-thirds, the budget and tax increases, leaving his answer fairly vague, as it has been in the past.

But far worse than this was his flippant approval of Prop. 1A, the draconian spending cap that would effectively eliminate what amounts to half of the state school budget within a few years, and his dishonest rendering of the initiative as "a rainy day fund," without explaining how the rainy day fund is created. On the other ballot measures like 1C, 1D and 1E, which would privatize the lottery and raid voter-approved funds for children's programs and mental health, he gave a Solomonic "on the one hand, on the other hand" soliloquy and ended saying that he would be a bad spokesman for them.

This, then, is what needs to be kept in mind when Newsom urges a call for a constitutional convention. We see by his stances on the May special election what he would reasonably be expected to get out of that convention - a constitution that includes a "rainy day fund" created by a spending cap, coming at it from a right-wing perspective and ultimately resulting in a fake reform. This is essentially the position of Arnold Schwarzenegger, clueless media elites, bipartisan fetishists who assume without evidence the midpoint of any argument is automatically the best option, and most tellingly, the Bay Area Council, which makes perfect sense.

Meantime, the Schwarzenegger-sponsored political campaign in support of the six measures announced today an endorsement from the Bay Area Council, the business-centric public policy organization that is the impetus behind calls for a constitutional convention. Last week, Schwarzenegger made it quite clear that he supports the first convening of a state constitutional convention in some 150 years... a way to focus on multiple ideas for government reform at one time.

These two announcements certainly play to the idea of another "business vs. labor" narrative in California politics. Another possible fuel for that storyline comes in a $250,000 donation to the pro-budget measure committee on Friday by wealthy Orange County developer Henry Segerstrom. The donation from one of his companies is easily his largest campaign contribution in recent years, which saw smaller checks written to both the guv's 2006 reelection efforts and to the California Republican Party.

I support a Constitutional convention because I know what my principles are. I don't support mealy-mouthed calls for "reform" that are essentially corporate-friendly back doors to advance the interests of the powerful over the people.

Ultimately, Randy Shaw has this right - the people of California could elect Noam Chomsky, Warren Buffett or Howard Jarvis, and nothing would fundamentally change until the structures that restrict anyone in Sacramento from doing their jobs are released. And our assessment of who would be best to lead that reform should be based on deeds and not words.

If California’s future is measured by our education system, we are in deep trouble. And we are in this difficulty because the state’s Democratic Party and progressive activists have allowed right-wing Republicans to exert major control over the state’s budget.

I say “allowed” because there is no other explanation for elected officials and activists failing to put a measure on the November 2008 ballot removing the 2/3 vote requirement to pass a budget. Although state Republicans made their opposition to new taxes clear, progressives passed up a large turnout ballot whose voters would have approved such a reform. Passage of such an initiative would have avoided the billions of dollars in cuts we went on to face, with more cuts slated for future years [...]

If we have learned anything from the past months, it should be that putting money into state candidates will accomplish less than passing the budgetary reforms and tax hikes needed to return California to its leadership in education and other areas [...]

It’s time for the people to say “Yes We Can” to a new progressive future for California. Once the people lead, the politicians -- particularly those seeking their votes -- will follow.

It is senseless to discuss candidates for a race into a straitjacket, which is the current dress code for Sacramento. Anything less than fundamental reform will not solve the enormous set of problems the state faces - and it will take more than charisma, but an actual commitment, to make it happen.

Will IOUs Wake People Up?

I just heard Will.I.Am on NPR talking about education cuts in California. The budget crisis has gone mainstream. And once everyone gets the news that tax refunds, welfare checks and student grants will be suspended because the state is out of cash, a whole lot of other people might get some awareness as well. The dirty little secret about "liberal bastion" California is that we are not a civically engaged people, generally speaking. The budget has been in "crisis" for decades but not enough Californians have mustered up the interest in it. We have right-wing astroturf movements that play to base emotion, but not really citizen's movements that ask for basic fairness. Californians are 45th in the country in volunteering, 44th in attending community meetings and 45th in working on community problems. Chalk it up to traffic or self-absorption or what have you, but the general take is that Californians don't see much beyond what is in front of them. IOUs would change that. Well, maybe. It depends on if the banks will accept them, which is still being negotiated.

The payments to be frozen include nearly $2 billion in tax refunds; $300 million in cash grants for needy families and the elderly, blind and disabled; and $13 million in grants for college students.

Even if a budget agreement is reached by the end of this month, tax refunds and other payments could remain temporarily frozen. Chiang said a budget deal may not generate cash quickly enough to resume them immediately [...]

State officials have already designed an IOU template, Chiang said, and have been negotiating with banks over whether taxpayers could cash or deposit them if they are issued. The state could be forced to pay as much as 5% interest on delayed tax refunds if they are not paid by the end of May, Chiang said.

The last time the state issued such IOUs -- the only time since the Great Depression -- was in 1992.

In other words, the only way this delayed tax refund is going to work is if it causes MORE debt for the state. But let's go back to 1992. This was the last big recession in the country, and California again found itself unable to pay its bills. Tell me again how the budget problems aren't structural. Anyway, the state issued about $350 million in IOUs that year, about 15% of what is being prepared today. The process was not smooth:

IOUs have caused headaches for the state in the past. California issued $350 million worth of IOUs to 100,000 recipients in 1992 during a budget impasse between then Gov. Pete Wilson and the Legislature.

A four-year legal battle ensued after some workers had trouble cashing them. The dispute was settled in 1996 with some state workers getting paid time off for the inconvenience they experienced.

Beth Mills, a spokeswoman for the California Bankers Association, said individual banks statewide haven't decided yet whether they will accept the state IOUs this time.

Banks are barely willing to lend money, I just don't think they're going to be interested in accepting $2.3 billion in IOUs when the process was so difficult last time, and there is more uncertainty in the financial markets now. And even if they do, it will not be uniform across all banks, and customers are going to have varying experiences.

The State of the State speech that nobody watched proved the need for fundamental reform, but it generated barely a blip among non-elites. Having trouble cashing your disabled mom's assistance payment, that's a whole different story. Not to mention the fact that the continued erosion of jobs and the 5,300 public works projects that have been delayed by the state will create a lot of angry and idle minds.

Pitchforks and torches may be at a premium. And while it's hard to write a new Constitution in a riot, something needs to shake up this decayed and dysfunctional system.

We're Going To Need A Bigger Boat

I appreciate Bob's sentiment that the time is now to fight the Governor and the Yacht Party and bring some sanity into the fiscal process, but my fear is that the time for that was three years ago, when the successful fight against the special election should have been built upon, and at this point, we're already swirling in the bowl.

Let's just get you up to date. All infrastructure projects are currently shut down. Unemployment nudged up to 8.4% in November, the state lost 41,700 jobs last month, and up to 200,000 more jobs are on the chopping block from the public works freeze if it continues. Meanwhile the Governor is ordering up layoffs and furloughs for state workers, so just add those on top of the pile. You're likely to see a 10% cut in state employees, and a 10% reduction in the salaries of those who remain. More job loss means less income tax and probably less sales tax, as well as more need for public assistance.

And that's before a budget which could have further reductions to state employee paychecks, elimination of overtime and meal breaks, etc., is signed. Not to mention the billions more in cuts that the Democrats included in their work-around plan which the Governor threatened to veto. Schools, which were slated for $4 billion in cuts in that budget, have already gotten the jump on the state by cutting back their local budgets. After-school sports, libraries, and new teachers are probably all going to go.

This is a nightmare beyond the ability of many, even myself, to comprehend. It's so big that it'll affect everything, and the idea that a ragtag band of liberals have the power to stop the freight train from coming down the track is precious, but I think wrong. This is the accumulation of 30 years of bad policy and worse government structure, and that's not going to be turned around in the time it needs to be to avoid catastrophe. Even George Skelton, poohbah of all poohbahs, admits that the Yacht Party is so nakedly ideological that they have made the state dysfunctional. This work-around budget is good for the time being, but Schwarzenegger is clearly committed to hijacking that process. It's a large game of chicken that none of us can afford. And as I've noted, even balancing the budget - which the work-around does not do - will not necessarily restart infrastructure spending, and even federal help might not be able to do that.

Changing the constitution with a convention is a nice idea, but not so easy in practice, as we all know.

Talk of calling a constitutional convention has been banging around California for at least the last few decades — maybe since 1851, for all I know — and it's gotten a lot louder recently. Here, however, is the rule for calling a convention:

The Legislature by rollcall vote entered in the journal, two-thirds of the membership of each house concurring, may submit at a general election the question whether to call a convention to revise the Constitution. If the majority vote yes on that question, within 6 months the Legislature shall provide for the convention. Delegates to a constitutional convention shall be voters elected from districts as nearly equal in population as may be practicable.

In plain English: you need a two-thirds vote of the legislature to put an initiative on the ballot and then you have to get it approved by the voters. The problem is that no matter how sweetly liberals might croon about what a convention could do, conservatives all know the truth: the whole point of the thing would be to get rid of our insane two-thirds requirements for passing budgets and raising taxes. Unfortunately, our whole problem is that Republicans control (slightly more than) one-third of the legislature. And if we can't get them to vote for a tax increase in the first place, what are the odds we could get them to vote for a constitutional convention called for the express purpose of making it easier to increase taxes? About zero.

OK, but how about a simple initiative? We could get rid of the two-thirds rule just by collecting signatures and getting a majority vote, right?

Right. And we tried that just a few years ago. Prop 56 was supported by all the usual good government groups and would have reduced the majority needed to pass budget and tax measure from two-thirds to 55%. A bunch of other fluff was added to make it more popular ("rainy day" funds, no pay for legislators if they don't pass a budget, etc.), and in the end.....

....it got whomped 66%-34%. No one was fooled for a second. Everyone knew the whole point was to make it easier to raise taxes, and so it lost in a landslide.

I think a similar proposition to 56 wouldn't crash so hard today, but it would certainly go in as an underdog, because the majority of the state still doesn't understand the consequences of all this failure. It's a "dysfunctional electorate," as K-Drum puts it, as well as a dysfunctional government.

Do we need to fight? Yes. But we need some arms shipments from Washington (metaphorically speaking) before we can do that. A rescue package for the state is desperately needed, and it got a whole lot more so yesterday when the Governor vetoed the work-around.

Budget Deal Sealed...Again

CapAlert sez it's all over, and it's marginally better, actually:

Legislative leaders said today that they have reached a deal on the long overdue state budget that will satisfy demands made by Gov. Arnold Schwarzenegger.

The Republican governor has said he would veto the $104.3 billion plan lawmakers passed this week. He demanded that a proposed rainy day fund to help the state though bad economic times be tightened to prevent its balance from being depleted in good times.

And he said lawmakers must remove a maneuver, worth $1.6 billion, that would have increased the amount of withholding tax paid by personal income taxpayers.

Republican leaders and Senate President Pro Tem Don Perata emerged from a meeting this afternoon saying they had agreed to the governor's demands. They have proposed making up the lost revenue by increasing penalties on corporations that underpay taxes. The leaders also agreed to lower the amount of the state's reserve fund from $1.2 billion to $800 million. Under the proposal, corporations who underpay their taxes by $1 million or more would see penalties rise from 10 percent to 20 percent. The deal also assumes a cancellation of a proposed tax amnesty program.

A mixed bag here. I think the rainy-day fund is kind of silly, and the worst part of this is that Schwarzenegger will now get to wield his blue pencil on the budget (last year he struck funding to treat mentally ill homeless people, you recall. How moderate!). But eliminating the interest-free loan all of us taxpayers were going to give to the state against our will is a good thing, especially in return for increasing penalties on corporate tax cheats. The withholding gambit wasn't going to pass the override, because Republican leaders wouldn't have gone along (they somehow snuck it into a party-line vote the first time around).

Of course, that isn't a reliable form of income. And there are still plenty of gimmicks inside this budget. And, the $8 billion dollar chunk that could be siphoned off by judicial mandate to rescue prison health care has yet to be dealt with. So this end result is not exactly wonderful.

The pundits who gave Arnold a tongue bath over having the post-partisan postpartisan-ness to veto the budget ought to take a look at the finished product. It's still a piece of garbage. And that's by design in the dysfunctional budget system, where you practically are destined to come out with an illegal finished product.

The Bay Area Council, a group of high-level executives from around the state, has the right idea - it's time for a Constitutional convention that can blow all of these contradictory and debilitating rules off the table and start anew.

A constitutional convention was used nearly a century ago to wrest California's government from the hands of railroad barons. Today, some say it could help the state out of its current political dysfunction.

The Bay Area Council, which represents the chief executives of Google, Yahoo, Chevron, Wells Fargo and other major San Francisco Bay Area businesses, is leading the charge for a state constitutional convention to revamp state government.

"This year's budget deadlock shows better than perhaps any other recent event that our state needs a constitutional convention to fix a governance system that is hopelessly broken," Jim Wunderman, president of the Bay Area Council, said in a statement.

Among some of the changes being proposed:

Adopt a two-year budget cycle.

California's taxing and spending systems, along with its ties to local government spending.

Remove the two-thirds vote requirement to pass a budget in the Legislature.

The devil's in the details, but the current system doesn't work, and we end up suffering. There are dozens of teachers, health care workers, managers of clinics, public employees, and countless other groups who get hurt every summer by the late budget. The legislators aren't currently allowed to do their job. Reform is desperately needed.