The California Supreme Court handed down a stay of the Alameda County court’s order blocking the furloughs.  Here’s the text of the order:

The petition for review is GRANTED. Because the issue whether the Governor has the authority to direct the unpaid furlough of state employees is pending before this court and is scheduled for oral argument on Wednesday, September 8, 2010, in the related case of Professional Engineers in California Government et al. v. Arnold Schwarzenegger et. al., S183411, and without expressing any view on the merits of that issue, we conclude that it is appropriate to grant review in this matter and defer further action pending our resolution of the currently pending proceeding. Pending further order of this court, further proceedings in the Alameda County Superior Court in case number RG10494800 (and in consolidated cases numbered RG10507922, RG10507081, RGI0503805, RGI0501997, RGI0516259, RGI0514694, and RG10528855), as well as the temporary restraining order of the Alameda County Superior Court issued on August 9, 2010, are stayed. Votes: George, C.J., Kennard, Baxter, Chin, Moreno, and Corrigan, JJ.

What this means for the time being is that the upcoming furloughs, as defined by the Governor will go ahead until further notice.  The Supreme Court will directly review the decision (bypassing the court of appeal) and render a decision, which you would assume would come in a fairly speedy manner.  

Stay tuned for more on this, but this is a big win for Arnold’s furloughs and will probably control through much of the budget fightin’ season.

Well, this is a smack to the back of the head for Arnold and his short-sighted “furlough them all” policy:

An Alameda County judge has ordered furloughed state employees in nearly 70 departments to return to a regular work schedule next month, but he spared the state from immediately paying hundreds of millions of dollars in back pay while Gov. Arnold Schwarzenegger appeals the ruling.

Service Employees International Union Local 1000, the state’s largest civil service union, figures Roesch’s decision affects about 53,000 of its 95,000 members.

Judge Frank Roesch’s decision this morning underscored his Dec. 31 ruling that Schwarzenegger should not have furloughed workers in 69 “special fund” departments. Those departments get a significant portion of their budgets from sources outside the state’s general fund, which is the shrinking pot of money at the center of the government’s serial budget crises. The judge later ordered back pay for the furloughed workers. Schwarzenegger asked Roesch to postpone implementation of the ruling pending his appeal.

Ruling this morning, Roesch said furloughs should end now.(SacBee)

The way the budget generally works is that most of the big ticket items come from the general fund, K12 and higher ed, much of our debt service, most social programs, etc.  However, these special funds support a plethora of other programs where either voters (usually) or the Legislature has provided for a specific funding source. Most of these funds are doing ok. So ok that Arnold wants to raid those funds to cover for the general fund. Why not just have 3 headaches when you have one gaping axe wound from the head now, right?

Well, anyway, most of these funds are semi-sacrosanct. So, they aren’t so easily tapped, at least without a vote of the people. And that’s what much of this has to do with legally.  At the very least, it’s a slap on the nose.  

For the duration of the furlough craziness, I’ve had a particular definition of “Stupid.”  (Capitalized, that is.) Specifically, the furloughing of workers paid entirely by federal dollars that ends up losing the state money.

Here’s how it works in one example.  State worker A reviews disability claims. Worker A is a state employee, but his or her salary is paid by the federal government. Arnold, concerned as he is for simplicity over touchy issues like “facts” furloughs Worker A despite the fact that the state saves no money.  Further, the work that Worker A would have done would have pulled down federal dollars into the state, but instead they go unspent.  See…Stupid.

Now, Speaker Pelosi weighs in on all that Stupid:

While California must make tough choices as it works to close its budget deficit, furloughing workers whose salaries are fully-funded through the federal government results in the loss of millions of dollars for our state while harming our neediest citizens.

The Social Security Administration’s Inspector General has found that furloughs of Disability Determination Services workers would cost our state $30.6 million in lost federal funds while delaying $98.5 million per year in disability payments to disabled Californians. California is also dead last among all 50 states when it comes to paying unemployment insurance claims within 21 days, according to the Department of Labor.

The California Congressional Delegation and I met earlier this year with Governor Schwarzenegger and state legislative leaders to ensure that California will continue to receive the federal funds it needs. Enacting this bill, which passed the Legislature with large, bipartisan majorities, is one simple way to strengthen California. I hope the Governor will sign this bill and end all furloughs for workers funded by the federal government.

So, to summarize…state saves $0 Dollars. State loses $30.6 million.  How is this helping the state?  Now, the Legislature has approved a bill to end these furloughs.  Of course, if Arnold had just not pushed for them in the first place, we wouldn’t be in this position. Nonetheless, here we are. Arnold, sign the damn bill, and at least eliminate this one, small bit of Stupid.

In my long running series of anti-stupid posts, here is yet another remark on the stupid furloughs. You know, the ones that end up costing us more than we save. Yes, that kind of incredibly ridiculous stupid that can only come from the ideological black hole that seems to have taken up residence in the Horseshoe.

Furloughs of the state workers who carry out federally-funded benefit programs have delayed delivery of monthly checks to people with disabilities and impeded an already slow system for getting cash assistance to jobless Californians, according to a new report by the Senate Office of Oversight and Outcomes.

The oversight office found great frustration among federal officials, one of whom decried the furlough policy as a “ridiculous” impediment to benefits that can keep the most vulnerable Californians from homelessness.

The report analyzes the effect of furloughs on the unemployment insurance program and two Social Security Administration programs that serve people with long-term disabilities.

All three programs are paid for with federal dollars.  So cutting by 14 prercent  the pay of the state workers who administer them does nothing to help the state’s general fund or cash flow.  In fact, the report concludes, the three-day-per-month furloughs will cost California an estimated $18 million to $31 million in lost state worker salaries by July 2010, when furloughs are scheduled to end. (CapWeekly)

Of course, Arnold will come back with something like this: we can’t shield state workers from the hard economy. Yada, yada, yada. Yet, this isn’t about shielding anybody, it is about delivering services that Californians desperately need. And if these federally funded workers are furloughed, they can’t provide these services.

We save no money, none, zip, zilch, by having these furloughs, yet we reduce the capacity of our state government. Sounding pretty Shock doctrine-y there, isn’t it? Long story short, we have Arnold once again putting his ideology over the best interest of the state. Same ol’ story, I guess.

       California needs a knight in shining armor to deliver it from the forces of budget shortfalls, program cuts, and sub-15% legislative approval ratings.

       At first, I thought our hope was Gavin Newsom, but his departure from the Governor’s race leaves a handful of candidates on both sides that seem inherently opposed to doing the one thing that could save this state: raising revenue.

      So, who is going to carry the baton? Where is our saving grace, and when will he/she hurry their butt up and save us from sinking further and further into debt and depression?

     One person who could posthumanly save the State of California is Saul Alinsky. Deemed by many as the “father of community organizing”, Alinsky helped organize the Back of the Yards area of Chicago introduced to the national stage by Sinclair’s “The Jungle”.

      Alinsky passed away in 1972 (in Carmel-By-The-Sea), but his revolutionary tactics for mobilizing the masses have time and time again generated the true catalyst for change: Friction. Given the current economic situation in this state, Lord knows we need something.

       

       According to PPIC, the average income for a family of four in the lowest 10% bracket dropped 24% to just above $11,000 between 1967 and 1994, while the income for a family of four in the top 10% rose 35% to over $110,000. This was the situation in 1994. I don’t have numbers for more recently, but one can only imagine.  

       In times like this, when the gap between rich and poor is widening at an increasingly alarming rate, it is imperative that we create some friction. We are now beyond the point of using words like “if” and “should”. Rather, we need to use democracy to our advantage to get rid of the anti-tax BS that, to use a strong but justified word, oppresses working Californians and limits their access to life, liberty, and slows their pursuit of happiness.

       The goal, then, needs to be to educate Californians that revenue supports the programs that provide and create more diffusible social classes, and hence, that make the California Dream a reality.

       We’re not asking for a miracle, we’re only asking that people who are hurt by program cuts recognize this and mobilize to protect their interests!

This is the struggle that encompasses almost all Californians. The middle class suburban family in the Bay Area relies on K-12 education just as much as the immigrant family from the Imperial Valley does. The elderly couple that lost their eligibility for Medicare is hurt just as badly as the state worker who is furloughed four days a month and on top of that has to pay 32% more to send their kid to a UC, CSU, or Community College. Why are these people given the bill while Chevron pays $0.00/year to drill oil from the earth and Bank of America is able to raise interest rates at their own whim? More importantly, why are Californians letting this happen when it so obviously against their best interests?

       So, what do you think, Saul Alinsky?

       Sacramento has made it apparent that it isn’t going to make any real attempt at reforming itself. That said, we live in a democracy, and if we can make the point that change isn’t an option, it is a necessity, then maybe we’ll see some action from our electeds.

       So, it’s not Saul Alinsky we’re waiting for; we’re waiting for the People of California to wake up and take their state back. I’m ready.

With news that the Frankenstein budget and budget revisions of 2009-10 are still generating deficits, it’s worth looking at some of the effects of some of the cuts now that they’ve had time to sink it.

The Riverside Press-Enterprise reports that their projected furlough savings are approximately $4m short of their projections and that in some cases, the furloughs are actually driving up the costs of operation. And so, of course they are asking the workers to take a haircut.

Meanwhile, the Los Angeles Times reports that L.A. County Superior Court operations have been devastated by the cuts, and that civil trials may now take up to 4 years to go to trial. Lots of people laid off.

Under current court rules, most civil cases are supposed to be set for trial within one year of filing. This so-called “fast track” system created in the 1990s is now basically dead. The law requires that at trial begin within 5 years, though back in the pre-fast-track days, there were ways around this, such as empaneling a jury and then declaring a mistrial.

Leaving aside the lost jobs within the courts, this will lead to a serious lesson in “justice delayed is justice denied.” The big guys can often stomach a fight for that long, but your average civil plaintiff may not. Along with this are hard to quantify costs that will be thrown out into the world due to litigation expenses when it would be so much cheaper to fully fund the courts.

Also, I have read that the courts have put on hold until the 2020s their effort to implement the kind of online filing and calendaring system that you might have expected in the 1990s. The federal courts have a somewhat decent system, but nothing like what could be set up in one night with a good LAMP server today.

I submit these two instances as further evidence of the penny wise pound foolish approach the dysfunctional California government has taken towards the budget.

There’s lots of significant news in the Legislature’s last week regarding various bills, and it’s extremely difficult to keep up with it all, probably by design.  I should point out that, while the legislative calendar has an end date, there’s no actual reason for some of the forced bottlenecks that result in hundreds of bills being passed at the last minute.  It creates a shroud of secrecy in which special interests rule, and saps the public trust.  A Democratic leadership actually interested in positioning government as somewhat decent would remove these forced bottlenecks from the internal legislative rules and allow bills to be approved on a rolling basis.  That said, this is the system we have now, and here’s a bunch of news about various bills:

• A new bill would exempt non-General Fund workers from furloughs.  This would reverse one of the dumbest provisions in the budget bill, the practice of forcing furloughs on workers not paid by state government, saving almost no money and depriving people of needed services.  Of course, the Governor will probably veto this one, because he hates admitting how wrong he is.

• Democrats on that vaunted water committee have decided against floating a bond to pay for any restoration or overhaul of the Delta.  This means Republicans won’t vote for it, and very little will come of this very important committee thrown together at the last minute.  Some conference committee reports are here, but a deal looks remote, as it would need votes from some of the empty chairs in the Yacht Party.

• One bill that has cleared both chambers would set up “Education Finance Districts”, “in which three or more contiguous school districts can band together to try to increase local taxes.”  This is a small step to make it easier for districts to pass parcel taxes to fund schools, but at this point every little bit helps.  The 2/3 rule for approving such taxes would remain.

• With all the talk of health care reform, it’s notable that an anti-rescission bill has once again passed the legislature.  The bill would also simplify insurance forms.  Last session, Arnold Schwarzenegger vetoed it.  There’s something you don’t hear much about from the Democratic leadership – Arnold Schwarzenegger vetoed a bill that would have banned insurance companies from dropping patients after they get sick.  He sided with the forces of insurer-assisted suicide.  This is your modern Yacht Party on this issue:

“Any of those who have read the various exposés in the Los Angeles Times and others . . . is aware that health insurers have admitted and acknowledged they engaged in a form of post-claims underwriting,” said Sen. Mark Wyland (R-Escondido). “It is unethical and, considering what some of these people have endured, it really borders on the immoral.”

However, Wyland said he would not vote for the bill because the Department of Insurance has proposed new rules to solve the problem, and he wants to see how they work.

Hey, give ’em a chance to see if the immorality stops!  If not, we can think it over.

• The Legislature may extend a homebuyer’s tax credit passed in a previous budget agreement that was nothing but a bailout for developers.  It only credited new construction, and was structured only to benefit high-income households who could afford new construction.  By the way, sales of new units have fell since this was enacted, so it’s not even meeting its intended purpose.  But it’s a giveaway to a special interest, so off the money may go, even though we cannot afford it at this time.

• A bill to ban bisphenol A (BPA) from children’s products was delayed after the Assembly couldn’t muster 41 votes.  The debate in the Assembly last night was pretty fierce.

• Cities and counties reacted angrily to a proposed bill to slow local government bankruptcies until vetted by the California Debt and Investment Advisory Commission.  On the merits this looks to be a bill that would install more control on locals from Sacramento, although there are arguments on both sides.  But mainly it’s about the fate of union contracts in local bankruptcies, I don’t think either side would deny that.

• A roundup of other bills passed yesterday can be found here.

Despite the assumed end to the prison crisis, there’s still no bill to clarify the $1.2 billion dollars in savings assumed from cuts in the July budget.  The Assembly passed a bill that fell $200 million dollars short and had almost no prison reform in it (some parole reform, but no prison reform), and the Senate has yet to take that bill up.  After word yesterday that the Senate would do so, Darrell Steinberg backed away from it, seeking to give more time to the Assembly to add more reform and more cuts into the bill.  Because the bill only requires a majority vote, it takes effect 90 days after passage.  Which means that every day with no bill costs the state $3.3 million dollars.  This is the consequence of so-called fiscal conservatives in the Yacht Party, as well as their higher-office-seeking bretheren in the Assembly Democratic caucus, wanting to look tough on crime.  As the State Worker notes, this delay is taking a daily hit on the savings gained from furloughs:

Here’s one way that furloughed state workers could look at this: The CDCR budget impasse is whittling away at savings from furloughs. If you take that $3.3 million and multiply it by the 70 days from July 1 through today, you realize the state has burned through $231 million.

A single furlough day cuts about $61 million from the state’s payroll, although not all of that savings is in the general fund. (The rounded math: $2.2 billion divided by 36 furlough days in the fiscal year.) If you narrow it down to just salaries that the administration defines as being in the general fund, one furlough day equals about $35 million. (Double check our rounded numbers: $1.3 billion divided by the 36 furlough days.)

In other words, this budget-stalemate-in-miniature has squandered the equivalent of about four furlough days for everyone or nearly seven furlough days if you look only at general fund employees.

Other states have used smart on crime policies to reduce spending without any loss in public safety.  They are taking new looks at non-violent offenders, relaxing draconian sentencing policies, targeting parole resources to those who need supervision and concurrently lowering recidivism rates through rehabilitation.  Right now, California has the exact wrong set of policies on prisons.

In fact, California is nationally known “for having the most dysfunctional sentencing and parole system” in the country, according to Stanford University professor Joan Petersilia, a criminologist who has spent years working with state officials trying to implement reforms.

“We’re too harsh and too lenient. Simultaneously,” Petersilia said.

Our mix of tough laws and fixed terms doesn’t give prison officials the flexibility to push low-risk offenders toward rehabilitation and keep dangerous criminals behind bars.

But reform efforts haven’t gained public traction because we’re too busy trying to keep people behind bars — with Jessica’s Law, Megan’s Law, the three-strikes law — to take a hard look at whether locking up more people actually makes us safer.

“The public doesn’t understand how illogical the whole system has become,” Petersilia said. “We think that somehow we’ve created something that is able to call out the most dangerous people, send them to prison and keep them in for a very long time.

“And the public is willing to pay whatever it takes to get that type of crime policy.”

I disagree with the last sentence.  The public is willing to be frightened into initiatives that do nothing for public safety and just spend money needlessly, because they’ve seen no leadership on the other side for an alternative conception of how to protect the public sensibly and best manage our cirminal justice system.  Nobody has argued in public for a more intelligent system for so long, that the public willingness to believe in its possibility has atrophied.  We can keep the lock-em-up policies or we can look to a better future.  Either way, we’re blowing $3 million a day while some Assembly Democrats go on a desperate search for their spines.

Last week, Arnold Schwarzenegger’s administration, cut the furloughs for CHP dispatchers.  Apparently, the furloughs were causing extended delays in responding to 911 calls throughout the state.  In response, Arnold and his staff looked at the situation and determined that the furloughs were hurting the state.

Yet, still, the Governor insists on maintaining the otherwise blanket theory of furloughs.  Why just yesterday, he wrote a letter to DiFi saying how important the furloughs were, despite the fact that the furloughs in question were for state workers paid by federal dollars.

So, why the inconsistency? Why is it acceptable to make changes in the furlough policy for 911 dispatchers based on safety and not for tax collectors whose furloughs end up costing the state money.  This isn’t policy making, it’s just plain Stupid^TM. (Photo from WSJ. Arnold found some dumbbells in a burned out house…so he had to pump up a little bit.)

The Legislative Leaders have now submitted a kindly request to the Governor to cut one of the furlough days. You can read Senator Steinberg’s letter in full in this diary, he is simply asking for some reasoned policy analysis and to consider how it is affecting the state. It is a wonkish letter to be sure, but it highlights opportunities for cost savings and ways that the state can improve services to Californians. Of course, he is still a politician, and can finish with a rhetorical flourish with the best of them:

Information we have gathered indicates that California will lose hundreds of millions of dollars in our general fund at the state tax agencies alone. The current furlough policy has become a “penny saved, a dollar lost” approach that can be corrected immediately.

*** *** ***

You recently re-examined the furlough policy as it applied to dispatchers employed by the California Highway Patrol, and exempted these employees from the furlough.  I applaud you for that action.  Now is the time to re-examine the policy more broadly. Please find attached information the Senate has gathered on the furloughs.

On the flip side, the Governor’s policy goal seems to be simply punitive.  

“Senator Steinberg and Governor Schwarzenegger have a fundamental difference when it comes to furloughing state workers,” said Schwarzenegger spokesman Aaron McLear. “The governor believes they should cut back like all California families and businesses. Senator Steinberg believes state workers should be shielded from the economic realities the rest of the state faces.” (LA Times 9/3/09)

A few things here, first the role of government isn’t to punish its workers for the sake of punishing workers.  If we aren’t saving money with these furloughs, then why are we doing them? Why are we furloughing tax collectors, federally funded employees, and prison guards, when the furloughs will end up costing us more money in the long-run? This isn’t about shielding state workers, it is about providing services that Californians pay for. State workers don’t need to be taught a lesson that will cost the state millions of dollars to impose.

I would also point out that being a state worker is a trade-off. You take generally lower pay than you would in the private sector, but you get benefits and supposed job security.  Demonizing state workers will make it increasingly difficult to recruit quality state workers as we hopefully move beyond this crisis.

And beyond the fact that it causes inconvenience for Californians, it doesn’t really address the underlying problems with the budget: more money going out than coming in. We need a more flexible revenue and budgeting system to allow the state to respond to its needs.  But if we are going to furlough state workers, can we at least be sure that we are saving money in the process? Anything less would be, well, Stupid.^TM