March 19, 2010
The Kern County Taxpayers Association is pleased to endorse SCA 19 (Desaulnier) which embodies the non-partisan reform principles crafted by California Forward to overhaul our state's budget process and empower local governments to work together and better plan for the future of the people they serve.
As one of the leading authorities on the state budget, you know how urgently we need this legislation to give California the modern tools it needs to make best use of taxpayer dollars, set firm priorities for programs and pass responsible budgets on time.
California Forward's reform principles are based on proven practices that businesses and other states have used to improve decision-making, deliver better results and improve public confidence in their government.
Like most Californians, we are justly proud of our great state, a state that has always led the way, in technology, protecting the environment and providing our citizens with a quality of life that is second to none.
The fiscal crises we've faced in recent years have put California's leadership in jeopardy. The status quo simply isn't working. The California Forward plan offers a way to make real and lasting reform that will help restore our state to its leading role in the world and help Californians achieve and thrive in the global economy.
"Nothing in the California Forward plan makes it easier to raise taxes or fees. The plan keeps the two-thirds vote requirement to raise taxes, and prevents lawmakers from replacing a tax with a fee to dramatically increase revenue. There's no doubt in my mind that if the California Forward plan had been in effect years ago, our state would be in far better financial shape," said Tom McKernan, California Forward's Republican co-chair.
"The California Forward plan would introduce a key reform to our budget process - performance-based budgeting. That means the Governor, the Legislature and every state agency would have to determine what taxpayers are getting for their money, and how they could do a better job. Many states and local governments have used this practice to balance their budgets and get better results. Why should California get left out?" said former State Senator Bruce McPherson (R-Monterey).
I was no fan of California Forward's version of the change to majority vote rules. It simply gave up too much ground on the revenue front in exchange for the budget vote. Yet, it looks like it's going the way of Repair California:
Officials from the reform group California Forward said today that unless deep-pocketed donors come through with pledges for big support, the campaign to qualify a package of their budget reform proposals for the November ballot could be put on ice.
California Forward Co-Chair Robert Hertzberg, a former Democratic leader of the Assembly, said today the group needed to secure a "few hundred thousand dollars" by week's end in order to move forward with an initiative campaign to qualify two budget reform measures, which include lowering the vote requirement for passing a budget from two-thirds to a majority vote. (CapAlert)
Seeing it die the same death as Repair California's (also flawed) efforts, does leave a bad taste in one's mouth about the initiative system even if I didn't like the measure itself. It leaves our governance up to a few rich people.
We desperately need to end the supermajority requirements, but it's becoming painfully clear that we need to do far more than that. We need big ideas on how to reform government, completely unrestricted. We need a convention that can take up any idea, is built upon thousands of democratically elected representatives. Give them a month, and they'll figure something out.
But, hey, I'm just rambling. Perhaps it's the sheer scale of all the money that is needed for real reform. It makes my head spin.
In the con-con vs initiative reform debate. California Forward is the heart of the initiative side of the argument. So, their proposals, which are likely to be followed up with some corporate cash, carry some importance.
Now, many of these proposals are things you have heard before. And the target of today's news is a measure that would adjust some of the supermajority requirements. Sounds good, right? Well, maybe not, as CalBuzz's birdogging of the measures uncovered a teensy-weensy issue: the original measure required basically all fees to get a 2/3 vote. In other words, they wanted to subsume the Sinclair Paints decision. Sure, progressives would get a majority vote budget in exchange, but that's kinda like getting a lump of coal in your stocking. Sure, you can use it to heat the room for a while, but it's really lame and you end up depositing a bunch of chemicals in the air.
Now that they got some negative attention from the left, CA Forward is trying to do what they try to do best. Get some more squishy love from the squishy middle. They've changed the proposal's language. You be the judge as to how much difference this change makes:
Option 1) Their proposal still cuts into the Legislature's ability to use raise fees by majority vote - which will still infuriate progressives - but only when fee revenues would "replace funding for specific programs, services or activities previously funded by a tax that is repealed or reduced in the same or the prior fiscal year."
Option 2) The proposal said a two-thirds vote was needed for "any bill that imposes a fee that replaces revenue that in the same or the prior fiscal year was generated by a tax.
Option 2 is the old language, with option 1 being the replacement language. Now, this clearly makes a big difference. A majority could still pass a new fee to bring revenue into a specific program that was receiving general fund revenue. However, the tax couldn't have been otherwise reduced.
So, why is this a problem you ask? Why would we want to reduce the taxes? Ah, that brings us into the "Majority vote revenue package" that was placed up for discussion last year, and that Arnold said no way to. Essentially, that plan repealed one part of the gas tax to replace it with a majority vote gas fee as well as a tax to go directly to the general fund. That would be a revenue neutral tax increase, but end up bringing additional revenue to the table.
Under California Forward's current plan, that is still killed. So, pretty much any substantive revenues will have to go through the supermajority. Whether you think the majority vote budget is worth that trade-off is a value decision. Given the painful budgets we'll be seeing over the next few years, I'm a bit skeptical.
The California Chamber of Commerce and 33 other business groups have basically stuck a knife in the Parsky Commission with a coalition letter opposing most of the tax reforms proposed. I'm sure they'd still love to see a flat income tax and the elimination of corporate taxes, but since they have basically refused all revenue-raisers in this document, that won't happen.
The coalition doesn't like removing Proposition 13's property tax limits from business property and a proposed new "carbon tax," both of which have been promoted by the tax commission's liberal bloc. But it also is warning about the potentially negative effects of a "net business receipts tax," similar to a European-style value-added tax, that commission chairman Gerald Parsky champions [...]
"The California business community has consistently stated that the solution to California's revenue problems will only come from robust economic growth and job creation," said today's letter to Parsky. "We believe the proposed split roll property tax and the energy tax would be extremely detrimental to California's economy. As for the business net receipts tax, we believe it is risky and inappropriate to move forward with dramatic changes to the tax structure without first fully vetting their impact on California jobs and the economy."
The only way for the Parsky Commission to get an up-or-down vote for its recommendations is by making the package revenue-neutral. The CalChamber document opposes all of the tax hikes while saying nothing about the reductions. California Democrats can be squishy, but not squishy enough to eliminate corporate taxes in exchange for nothing. Sen. Steinberg never agreed to bring the commission recommendations to a vote in the first place. And without an offset, they will never see the light of day.
Arnold Schwarzenegger is a wholly owned subsidiary of the Chamber of Commerce. Even in the unlikely even that the legislature ignores this letter and passes some plan including split-roll or a carbon tax or a business net receipts tax, there's no way the Governor signs it. The Parsky Commission is dead.
And I'm not really shedding a tear for it. Forcing a revenue-neutral standard on how to fix the tax structure inevitably was going to shift the tax burden from the rich, who have the clout to shield themselves from the predations of lawmakers, to the middle and lower classes, who don't. The very structure was flawed, and the reforms sought of a lesser order than being able to properly fund government according to the wishes of the majority.
So we can move on to the next challenge. Calbuzz has a good scene-setter on that, referring to something that Jean Ross mentioned in our Netroots Nation panel last week. California Forward's reform package may include, as a condition of repealing the 2/3 rule for passing a budget (and only the budget), a raising of the threshold to 2/3 for mitigation fees on businesses, which may extend to fees on alcohol, oil production and "anything else that carries a nexus to a public problem." In other words, while the budget would require a majority vote, revenue (which is 1/2 of a budget) would be subject to an even higher standard than it is now, and the legislature would be constrained in their ability to respond to the impact of corporate actions that harm the public good. Actually it could go even further than that:
But Chairman Bob (Hertzberg) insists it would be a mistake to focus only on Sinclair as the key to business support for CF reforms. The only way some of the conservatives and business people on CF would "even consider" allowing 50% to pass the budget is if there's a whole panoply of budget reforms - pay-as-you-go provisions, controls on one-time expenditures, two-year budgeting, performance reviews, sunset provisions AND limits on what can pass with 50% as a "fee," he said.
But will liberals - on CF and in the Legislature - agree to circumscribe their current authority to impost fees with a majority vote? Will they agree that there has to be a "clear nexus" between charges allocated to a polluter or manufacturer of polluty stuff?
As Jean Ross puts it, ever so succinctly, "California Forward?" I concur.
So while we appear to have sidestepped the Parsky Commission (for now), California Backward's set of "reforms" still lurk in the distance.
I'm having some computer issues, but I have been able to notice that Leon Panetta, former White House Chief of Staff under Clinton, has been tapped for the CIA Director position. Digby references this article from Panetta from this year:
Even though we now know that there were intelligence officials who questioned the assertion, few leaders were willing to challenge this argument for war because they knew it might undermine public support for the president's decision to invade Iraq.
More recently, President Bush vetoed a law that would require the CIA and all the intelligence services to abide by the same rules on torture as contained in the U.S. Army Field Manual [...]
all forms of torture have long been prohibited by American law and international treaties respected by Republican and Democratic presidents alike.
Our forefathers prohibited "cruel and unusual punishment" because that was how tyrants and despots ruled in the 1700s. They wanted an America that was better than that. Torture is illegal, immoral, dangerous and counterproductive. And yet, the president is using fear to trump the law.
I hope he gets cracking on putting the CIA under the Army Field Manual. That would be a very good start.
As a side note, Panetta has been leading one of the most insufferable organizations in California's history, a high Broderist effort called California Forward, which thinks the biggest problem in the state is that lawmakers from both sides don't have drinks together anymore, or something. At least Panetta's influence on the state will be lessened. He's not my favorite guy by any stretch, but if he can manage to not have the CIA kidnapping and torturing anymore he can hold his head up high.
"I was not informed about the selection of Leon Panetta to be the CIA Director. I know nothing about this, other than what I've read," said Senator Feinstein, who will chair the Senate Select Committee on Intelligence in the 111th Congress.
"My position has consistently been that I believe the Agency is best-served by having an intelligence professional in charge at this time."
I happened to catch Which Way L.A., one of the few public affairs programs in California, and after about 20 minutes of listening I considered the unique method we have of running a 38 million-person nation-state with almost a total media blackout on government's inner workings to be maybe a good thing. Because this was the most fantastical 20 minutes of drivel you could possibly conjure, and I'm pained by the thought that anyone was exposed to it.
Warren Olney had his usual insider flaks on, with pollster Mark Baldassare, Fred Silva from California Backward Forward and Neal Johnson, Director of the "public performance" project at the Pew Center on the States. You can listen to it here, but please, please don't. Let me summarize. Basically the problem with state government is that nobody gets along. If we'd only all pitch in as a team and work together to move things forward, everything would be dandy. Also reviewing the performance of every single public program would eliminate the budget deficit, or something.
I don't remember the words "two-thirds requirement" in the 20 minutes I heard, or "tax pledge," or the sundry other characteristics that make California completely ungovernable. The idea that you're going to get people with the ability to hijack the budget with a tiny minority to willingly give up their power in the spirit of "working together," when they've organized themselves around precisely the opposite circumstance, is so ridiculous and unserious that I'm surprised anyone can make the argument when they're not teething.
Here's the extremely simple point. California isn't allowed to govern itself, by its own rules. If you want any possible solution without the same kind of gridlock and delays, CHANGE THE RULES and allow elected lawmakers to do their own jobs. It's not about being friendly or reforming on meaningless margins or "restoring voter's trust" (whatever the hell that means). It's about allowing government to govern. Talking about anything else is just verbal masturbation.
I mean, if Dan Walters can see the frickin' light on this, it's not locked away in some formula.
It is what those in the Capitol call - and what California Forward identifies as - a "structural deficit." This is, in brief, a unique situation and what any governor did in the past means absolutely nothing today. Until and unless California resolves its underlying crisis of governance, the budget crisis, along with the crises of water, education, transportation, housing and everything else, will continue to bedevil us.
That's the message that California Forward should be driving home.
Today's LA Times has an interesting series of op-eds by historians and authors examining how past governors dealt with budget crises. It's an interesting look not only at how those governors all helped build the prosperous state that we're living off of today, but also how the real problem with the budget isn't a lack of pragmatism or deal-making, but ideology. And since the articles were commissioned by California Backward they are particularly important in shaping how we will respond to this crisis.
The profile of Pete Wilson by Greg Lucas and Ronald Reagan by Lou Cannon both argue that pragmatism and a willingness to deal is the key to budget success. Lucas' portrait of the contentious 1991 budget negotiations is designed to make us wistful even for Pete Wilson's leadership (if you forget 1994, that is). Wilson understood that tax increases were going to be necessary to balance the budget AND to get Democratic support, so he outflanked them by proposing his own increases and then spending the summer cutting the deals necessary to get Dems to agree and to turn enough Republicans, one by one, to his view.
Cannon's portrait of Reagan emphasizes similar qualities - that despite their "novice amateur" abilities, Reagan and his advisors knew that a tax increase was necessary to balance the 1967 budget and avoid crippling cuts. Reagan did so, and therefore helped continue California's remarkable 20th century economic expansion by supporting the government services that growth depended on.
What both these portraits miss - alongside Jim Newton's profile of Earl Warren, an unconvincing effort to see Arnold as a latter-day Warren, is the role of ideology in the budget. Warren, Reagan and Wilson were able to negotiate budget solutions because they did not define their Republicanism by a virulent anti-tax conservatism - even in Reagan's case, and Reagan had spent the 1960s leading the right-wing takeover of the California Republican Party.
They also governed at times when Democrats had spines. This was particularly true in 1991, where Democratic intransigence and demands for a better deal were all that forced Pete Wilson to propose and stick to his tax plans. Most of those taxes survived until the late 1990s, when led by Tom McClintock, the state legislature - including Democrats - voted to spend that tax money on foolish and short-sighted tax cuts rather than putting it in a rainy day fund or investing in infrastructure. During Arnold's term Democrats have caved in to his demands so often that Arnold no longer sees Democratic demands as worth taking seriously.
The ascension of Tom McClintockism within the Republican Party goes to the heart of the budget matter, showing that it is about ideology, not deal-making. How can today's Republican cut deals on taxes when the Howard Jarvis Association, CRA, and other right-wing groups are ready to destroy a Republican legislator's career for doing so? The only Republican not in thrall to those folks, Arnold Schwarzenegger, is instead in thrall to Milton Friedman's shock doctrine theories.
So it was very welcome to read Ethan Rarick's profile of Pat Brown. Rarick is the author of the excellent California Rising: The Life and Times of Pat Brown. In his profile Rarick refuses to emphasize Brown's leadership qualities and instead focuses on the underlying ideological and structural contexts. He was the only author to mention the 2/3 requirement. And he understood the importance of ideology:
More important than procedural changes, however, are ideological ones.
In Brown's day, the country remained in the grip of the so-called New Deal consensus, a mood far more receptive to the idea that government played a constructive role in our society and had to be amply funded. Brown used to say of himself, "I'm a big-government man," a phrase that would nowadays be uttered by no politician, left, right or center.
It's true that Republicans tended to be more skeptical of government than Democrats, but they were neither unanimous nor intransigent on the point....
So I'm quite sure I know what Pat Brown would do if he were governor today, or at least what he would want to do and try to do. He would trumpet government's positive role, insist that those who benefit the most from our society should pay the most, and set about enacting policies to create a public sector that was funded both fully and fairly. In short, he would raise taxes, especially on the rich.
But the real question is not what Pat Brown would do. Given the differences in ideological climate between his day and ours, the real question is: Would we let him?
It's an excellent set of points he makes. I wonder though if California Backward will even listen to him. A group composed of centrist high Broderists is much more likely to prefer a call for more deal-making that will nevertheless produce conservative solutions to a rousing defense of the policies that made California great, and an attack on the conservative policies that have produced this budget crisis.
I know, I know, it's too easy. But what better headline can one come up with to assess the ridiculous and ineffective solutions proposed by Leon Panetta's high-powered, high cost group of high Broderists to solve the budget crisis?
* Requiring new or expanded programs -- whether created by the Legislature or ballot initiative -- to contain a specific funding source. That could be either new taxes or money gleaned from another program that is eliminated.
* Regularly examining spending programs to determine whether they should be revised, reduced or rubbed out.
* Also regularly reviewing tax loopholes to see if they're still needed: "Treat tax breaks like spending."
* Creating a rainy-day fund fed by unexpected tax gushes. When revenue dwindles, dip into the fund. Or use it for one-time public works projects or even tax rebates.
* Modernizing the tax system "to reflect the contemporary economy." Extend the sales tax to services while reducing the overall tax rate.
* Focusing on multiyear spending plans, rather than merely passing one-year budgets.
* Granting more power and responsibility to local governments.
* Changing the two-thirds majority vote requirement for budget passage. It wasn't suggested what the vote should be, but any change must be tied to "other reforms designed to improve performance, accountability and public trust."
Nowhere is the structural revenue shortfall discussed. Instead Panetta and friends take Republican framing to the budget, believing that the problem is too much spending. Nowhere are the state's pressing problems of underfunded education, health care, and public transportation discussed. It's as if those issues don't exist - as if this is 1985 and gas is at $1.20, a year at UC at $2,000, and health insurance plentiful and affordable.
The California Forward proposals are as backward-looking as anything we've yet seen, an effort to continue obsolete 20th century assumptions, an effort to avoid confronting 21st century realities.
Of course, it should come as no surprise that the group also embraces the unnecessary redistricting reform - an inherently pro-Republican proposal that should suggest where this group's allegiances actually lie.
Skelton takes their bait in his column, and argues - against all evidence - that the problem is simply that Republicans and Democrats won't talk to each other:
The reformers are prepared to take their proposals to the ballot in 2010 if they're ignored by the Legislature. But they're hoping the lawmakers will adopt at least incremental changes. A good time to start will be during this summer's budget negotiations. The reforms could "give Republicans a little comfort on spending and how tax dollars are used," Panetta theorizes.
But first the politicians have to start talking to each other.
Here's a suggestion: Turn off the BlackBerrys and cellphones.
Better yet, lock them in a desk. Look people in the eye. Smile. Sit down and deal.
This is ridiculous to the point of not understanding California politics. Someone as experienced as Skelton ought to know the real problem is with ideology and the rules. The 2/3 rule allows far-right Republicans to hold the state hostage to their rabid anti-tax views, which are not representative of the state's public opinion. It's not gerrymandering that enables this, or a refusal to talk - but the very real fact that the moment a Republican deviates from the firm anti-tax line the Club for Growth, the Howard Jarvis Association, the CRA and even the CRP will come down on that legislator like a ton of bricks. His or her primary opponent will be well-funded and his or her hopes of re-election and higher office are over.
How does Skelton not understand this?
Skelton, Panetta, and the other high Broderists wish it were 1974 all over again. It's not. It's a shame what remains of our state's media prefers nostalgic flights of fancy to realistic assessments of present-day issues.
Seeking to increase the statewide per capita vomit output, this $16 million dollar boondoggle called California Forward continued its weeklong rollout with yet another fawning article, this time from Shane Goldmacher.
Could late and unbalanced budgets, along with partisan gridlock, disappear from Sacramento?
That's the goal of a new bipartisan political foundation that unveiled its campaign Wednesday to improve state government, bringing along a three-year, $15.9 million budget and high hopes for overhauling the way the state does business.
If there's one thing we've seen over the years, it's that bipartisan unelected commissions really do change everything. After all, the Iraq Study Group got us out of the war, right?
"California cannot be a leader in the 21st century if its government is not functioning effectively and efficiently for the people of this state," said the group's co-chairman, Leon Panetta, a Democrat who has served in Congress and as chief of staff to President Clinton.
Thomas McKernan, a wealthy Republican activist in Orange County and CEO of the Automobile Club of Southern California, is the other co-chairman.
The foundation's leaders promised it will differ from past reform coalitions. As board member and former state Sen. Chuck Poochigian, a Fresno Republican, put it, California Forward has "the resources to get the job done."
You don't need ten cents to know what has to be done in California. You need to let elected officials govern. I believe in checks and balances, but here we have barriers and deadbolts. And guess what, the entire state understands this already. Well over 2/3 of the state believe major changes need to be employed in the budget process, like eliminating the stupid requirement allowing 1/3 of the legislature to block tax and budget proposals. Everyone gets that budget reform needs to reflect democracy.
But closing loopholes, while helpful, doesn't come close to real budget reform and restoration of the representative democracy and accountability that have been eroded for decades by an initiative process that encourages both ad-hoc automatic spending formulas and paralyzing revenue limits.
The governor properly points out that the common cycles of feast and famine - both in California and elsewhere - make little sense. But the fix is not more formulas. It's a return to a system of representative government that forces voters to make choices between good services and low taxes, and makes all politicians accountable instead of rewarding them, as the process does now, for fudging, borrowing and irresponsibility.
I don't think Peter Schrag was given $16 million dollars to come up with that.
Of course, it wouldn't be right to just advocate for democracy in Sacramento, because that would be too terribly "Democratic." It'd ruin the street cred of these sensible wise men, these moderate militants, who think that the best solution necessarily includes a little bit from the left and a little bit from the right, claiming that the real solution is just to tell lawmakers that "governing is more important than winning," because holding hands in a circle is the $16 million dollar answer. We actually need partisanship and a politics of contrast so voters can make real choices. This call for bipartisan solutions only goes out when progressive ideas are flourishing. Sacramento wasn't "broken" when the energy market was deregulated. It wasn't "broken" when Prop. 13 made it impossible for the state to gather expected revenue. It's only "broken" when a tiny group of Yacht Party Republicans are straining to hold back the tide of legitimate government with a proper revenue structure.
And by the way, guy from California Forward who emailed me within 10 minutes of the last time I wrote about this: don't bother. I've little interest of being assimilated into the Borg.
