In the 1930s two crises hit the Great Plains at once – 50 years of overfarming marginal lands had destroyed the topsoil and created what we know as the Dust Bowl, and at least twenty years of economic pressure to overfarm (to pay debts and make up for collapsed prices) had created an untenable financial situation for the farmers. Either one was going to end in disaster – the land would give out or the overuse of credit would end in deflation and ruin. As it happened, the crises both occurred at exactly the same time, producing a social catastrophe from which several states have still not recovered.

California now faces the same problem. For 60 years we have based our economy on the production and consumption of sprawl. This worked well enough until the late 1970s, when those who had prospered the most from this model decided to stop reinvesting profits in the state and in society, and took their ball and went home. The next 30 years were dominated by even more sprawl, financed by massive amounts of debt and by eating the state’s seed corn by slashing the government programs that built prosperity in the first place.

This was always bound to end in disaster, and as we are well aware, that disaster – in the form of economic depression and government bankruptcy – is now here. But the massive sprawlconomy binge had another set of costs whose bill is now coming due – water.

California had an unusually wet 20th century, and we exploited that to the fullest. To have a society built on sprawl and consumption, we needed to siphon as much water as possible to give not just to the new housing developments, but to the sprawling farms. Sprawl is a farming phenomenon as well – wasting land and water resources on resource-intensive crops grown to enrich shareholders, instead of sensibly using land and water to grow crops for subsistence and food security. California was in a water bubble, just as the state was experiencing a financial bubble. We have been living well beyond our means.

Ultimately the water bubble was going to burst. And just as in the 1930s Great Plains, it is bursting at the same moment as the economic bubble. For the least year or so you could drive down the backroads of the Salinas Valley, Salad Bowl Of The World, and see shuttered warehouses and laid off packing workers.

Now that water is less available the agricultural recession is shifting into higher gear. The highest unemployment rates in California are in our agricultural counties – 22.6% in Imperial, 14.3% in Tulare, 13.7% here in Monterey County. (Note: those stats are for nonfarm jobs, and yet the correlation between ag and the rest of the county economy is obviously very strong.)

The water crisis is now about to come to the rest of California. Sitting here in Monterey, in summer-like weather in January, I am inclined to believe the claims that this is the worst drought ever in the state’s recorded history:

California teeters on the edge of the worst drought in the state’s history, officials said Thursday after reporting that the Sierra Nevada snowpack – the backbone of the state’s water supply – is only 61 percent of normal.

January usually douses California with about 20 percent of the state’s annual precipitation, but instead it delivered a string of dry, sunny days this year, almost certainly pushing the state into a third year of drought.

The drought exacerbates the problems caused by our overuse of water resources. To prevent a total environmental collapse in the Delta massive reductions of water flows will be required. And for those of us who live in counties that don’t get our water from the Delta – places like Sonoma, Marin, and Monterey – the situation is going to be worse. Water managers in those counties are planning to 50% cutbacks in urban water use, which is an amount that will dramatically change how we live. We could let every lawn die and stop hosing down every driveway and still not get anywhere close to 50% reductions.

The Monterey Peninsula has been under Stage 1 water rationing for ten years now. You rarely see water wasted here, and new development has been at a standstill (how many towns have vacant lots and abandoned homes within a mile of the beach as we do?). But a 50% cut will force dramatic changes in how we live, as it will around the state.

Those changes ARE coming. There is no way around the fact that the way California was organized in the 20th century – politically, economically, and especially in terms of our land use and water use – is over. Done. Gone.

The question for us now is will we try to actively transition California to a more sustainable future? Or will we do nothing and let the chips fall where they may? The first option at least allows us a chance of rebuilding widely shared prosperity by funding local food, sustainable farming, and urban density. The latter would produce widespread immiseration while allowing a small aristocratic elite to enjoy a semblance of the 20th century lifestyle.

The choice is up to us.

The State Lands Commission scuttled a proposed compromise that would have brought new oil drilling to the Santa Barbara coast for the first time in California since 1969, in what is seemingly a victory for environmental and coastal protection advocates.  However, some are arguing that the proposal, which would have mandated closure of 4 additional oil platforms off the coast within 13 years, should have gone through.

But a parade of local officials, residents and environmental activists insisted the plan would have advanced efforts to protect the coast by eventually closing four of the region’s 20 platforms.

“For the first time in history, the public and the state will be able to shut down existing oil production,” argued Linda Krop, an attorney for the Environmental Defense Center and one of the people behind the proposal. “Without this project, they’ll continue indefinitely — perhaps another 40 years.” […]

Nineteen of the 20 platforms that dot the ocean off Santa Barbara and Ventura counties are in federal waters. Shuttering four of them, says Krop of the Environmental Defense Center, would make it difficult for the federal government to lease underwater tracts accessible from those platforms.

And with closure of the two processing plants, the prospect would have been more unlikely, she said.

Read the whole article.  There was a significant green alliance in favor of this drilling-for-closure exchange.  I tend to agree with the Lands Commission that the proposal for closure wasn’t completely enforceable, but then, that’s their job to write the law with some enforcement, isn’t it? (I guess their concern is that these are federal waters and the state would be limited to enforce end-dates.)  I also understand John Garamendi’s stated rationale, that approving one lease would set off a parade of oil companies coming to sully the coast, but off course those are approved on a case-by-case basis as well.

If we’re going to talk seriously about drilling off the coast in the future, there should be at least a couple bright lines – closure deals like this, and the implementation of an oil severance tax so that we’re not the only state in the country that doesn’t charge a fee to industry for taking our natural resources out of the ground.

It’s an interesting debate – legislators are split, with coastal Assemblymembers opposing but the locals in Santa Barbara in favor, and even Lois Capps thinks it’s a worthwhile deal.  Endless oil and gas concerns off the coast ought to be dealt with, it’s a good question to ask whether this is the right way.

From today’s Beyond Chron.

Because Governor Schwarzenegger is impotent at brokering a budget, the state will be out of money on February 1st – and will start issuing I.O.U.’s.  That means no tax rebates, no financial aid and no other means of assistance.  Now we are looking at a statewide special election to get out of this mess.  If all we get is more Arnold gimmicks to delay the problem another year, it will be a tragically wasted opportunity.  Because now, more than ever, the public is willing to consider tax reform to get us out of the right wing fiscal straitjacket.  Beyond the Democrats’ effort to scrap the archaic two-thirds budget rule, legislators must consider placing ballot measures to amend Prop 13 (by exempting commercial property) – and eliminate Prop 218’s onerous requirement that local revenue measures get a two-thirds vote by the electorate.  With the recession wreaking havoc on our fiscal health, the public has finally woken up to the horror of right-wing tax policy.  For the first – and possibly only – time, voters might approve progressive ways to raise revenue.

Scrapping the Two-Thirds Budget Rule

Liberal bloggers were ecstatic yesterday to report that a new PPIC poll shows a majority of Californians would abolish the two-thirds requirement to pass a state budget.  And they should be.  Despite California being a solid blue state, Republicans in the state legislature from the Central Valley and Orange County have blocked our budget each and every year – because they adamantly refuse to vote for a single tax increase whatsoever in any way, shape or form.  This “tyranny of the minority” has blocked any effort to raise revenue during hard times – forcing the state to make painful cuts and borrow more money.

Specifically, the poll in question showed that a 53-41 majority of likely voters would support lowering the budget vote requirement down to 55%.  The Public Policy Institute of California (PPIC) has been asking this question every year since 2005, and it’s the first time that a majority of voters approved this idea.  As recently as May 2008, the question failed 39-53, with similar poll results in earlier years. Clearly, a seismic shift in public opinion has occurred.

Getting rid of the “two-thirds” rule is a priority for Democrats in the state legislature, who have tried in vain to forestall this crisis.  In a bout of desperation, they finally crafted a manipulation of the tax rules to get around the two-thirds requirement – only to have Schwarzenegger veto it right before Christmas.  If the Governor calls a special election, Democrats have said they will place a Proposition on the ballot to abolish the two-thirds requirement.

But it would be a lost opportunity to stop there …

Local Revenue Raising Reform:

Scrapping the “two-thirds rule” would make it easier to pass a state budget, but it would do nothing to solve the perennial revenue crisis that local governments face – a crisis that comes from state law.  Prop 218, which passed in 1996, requires all special taxes at the local level to get a two-thirds vote of the electorate.  Prop 13 also requires most local tax increases to be on the ballot.  So when San Francisco faces a $576 million deficit, these fiscal straitjackets mean requires us to have an election to raise taxes – which is never an attractive prospect.  

How in the world would Californians give up their power to raise taxes at the local level?  The same PPIC poll asked about lowering the requirement to raise special taxes at the local level from two-thirds to 55% (i.e., amend Prop 218 to make it less draconian.)  A majority (50-44) said it was a “good idea,” but the margin was closer among “likely voters.”  Prop 218 passed thirteen years ago with little fanfare – because progressives were too distracted by trying to save affirmative action (No on 209), raising the minimum wage (Yes on 210) and supporting medical marijuana (Yes on 215.)  Its damage has been catastrophic, but now we have a chance – possibly the only chance ever – to undo it.

Reforming Property Tax Revenue

Would voters also repeal Prop 13?  Don’t be silly.  The 1978 tax measure that castrated property tax revenue – and spawned the Reagan Revolution across the country – is still popular with Californians, especially long-term homeowners who enjoy the stability of capped increases.  But a Field Poll from June 2008 showed they’re open to amending it, and I couldn’t imagine a better time – when public opinion is willing to entertain such measures – to put it on the ballot in the name of rescuing the state.

Prop 13 was billed as saving residential homeowners, but by far its biggest beneficiaries have been corporations who own commercial property.  Because commercial property has much lower turnover, they pay much lower property taxes.  Imagine, for example, how much more revenue the San Francisco public schools would get if just one building – the Transamerica Pyramid – were exempt from Prop 13.  In the same June 2008 poll that showed voters strongly support Prop 13, the idea of “split roll” taxation either got 46-43 support or a whopping 61-27 approval (depending on how the question was asked.)

Progressives like Rob Reiner have been talking about a “split roll” amendment to Prop 13 for years.  Now is the moment to finally pass what folks have been saying for years.

For the June special election, San Francisco may put another parcel tax on the ballot – like they did in June 2008 to raise public school teachers’ salaries.  I voted for Prop A, but was not thrilled that every homeowner got levied $198-per-year, regardless of the size or value of their property.  Which means I will now pay the same amount for my 400 square-foot Tenderloin studio that Dede Wilsey pays for her mansion in Pacific Heights – which is unfair.  I’m not against taxing property owners, but let’s have some equity here.

Guess what?  San Francisco isn’t allowed to pass a “progressive” parcel tax, because Prop 13 requires them to be “flat.”  Rather than repeal Prop 13 entirely, allowing cities to pass parcel taxes that are not regressive sounds like a politically possible solution.

Other Budget Solutions for the Special Election

While structural solutions must be the priority, expect the statewide special election to have a lot of specific revenue measures on the ballot.  Schwarzenegger’s fiscally reckless idea to borrow against future lottery revenues is not popular and would fail, but the PPIC poll showed that his alcohol tax proposal would easily pass – and his regressive temporary sales tax is mildly popular.  What’s most interesting, however, is that raising the vehicle license fee by $12 would pass 61-37 – and even Republican voters support it by a 7-point margin.

If the Governor wants the special election to be about tax measures (most of which are just quick fixes), Democrats must demand a Proposition to raise income taxes for the wealthy.  The PPIC poll showed that idea passing by a 40-point landslide, one of the most popular revenue proposals.  Democrats in the legislature tried restoring the upper-income tax bracket to Reagan-Wilson levels last summer, but with the “two-thirds rule” could not muster its passage.  And the Governor never supported it – although he gladly repealed a $347/year tax credit for low-income seniors with the stroke of a pen.

If we’re going to raise taxes, let’s do it right.  Put a tax measure on the special election ballot to restore the upper-income tax bracket, and see if the voters like that better than Schwarzenegger’s ideas.  With the fiscal crisis devastating our state coffers, it’s time for everyone to sacrifice – but let’s demand that those who can afford to pay give their share.

Note: I work for the Courage Campaign

Sometime next week California is going to begin running out of money, and instead of sending checks that to people that are owed tax rebates, financial aid, or other forms of state assistance, they will either have their payment delayed or receive an IOU. This will make our recession even worse, and will make it more difficult for the state to begin economic recovery.

The budget crisis has many fathers, but one in particular stands out – Arnold Schwarzengger. For five years he railed against taxes and government spending, and because he failed to lead the state toward a stable budget, California is going broke. Yet the media persists in speaking of Arnold as a strong post-partisan leader. They don’t tell Californians that he is a failure, that he is more responsible than anyone for the IOUs – particularly since he vetoed the Democratic majority vote budget plan that would have finally neutralized the 2/3 rule.

Progressive Californians need to engage in many forms of activism to respond to this crisis – and one of those forms is good old fashioned agitprop. And that’s what the Courage Campaign has done with Arnoldbucks. – our term for the IOUs that are almost inevitably going to be sent soon to Californians.

We made a video that answers the question of “what happens when Californians actually try to use an Arnoldbuck?” The result is frustrating and humorous, and hopefully it can help show Californians that this crisis literally has Arnold’s name all over it. And we also created our own version of the Arnoldbucks for Californians to download, print, and give to their friends.

Obviously the impact of Arnoldbucks, if and when they are actually sent to Californians instead of the payments they are owed, will not always be funny. Disabled families, health care clinics, and schools will be hit extremely hard by the state’s inability to meet its financial obligations. That will require a multifaceted response – including an effort to educate the public as to who is responsible for this mess. Our video campaign is one attempt to do exactly that.

So have a look at our Arnoldbucks video and share it with your friends – and help us push back against a media that refuses to hold Arnold accountable.

Below is the text of the email we sent to our members:

Dear Robert,

Just when you thought it couldn’t get much worse…

California faces financial “Armageddon,” as Arnold Schwarzenegger bluntly stated a few weeks ago. And yet Arnold and his fellow Republicans rejected compromises by Democrats to rescue our state from a catastrophic budget crisis, unparalleled in the history of California.

Because of the ridiculous 2/3rds budget rule — the super-majority required to pass a budget in the California state legislature — and Arnold’s failure to deliver even one vote from a small cabal of obstructionist Republicans, Californians may be getting IOUs in the mail next week instead of financial aid checks or tax refunds.

Many Californians are so overwhelmed by this paralyzing crisis that they’ve just tuned it out. As a result, Arnold is not being held accountable for his failure to lead.

That’s why we decided to try something a bit unorthodox — raise awareness by using humor to highlight the absurdity of these IOU’s, or what we are calling “Arnoldbucks.”

We asked one of our members to see what would happen if he tried to use “Arnoldbucks” as legal tender at a few businesses in the area. You won’t believe what happened. It’s all caught on camera — even a few security cams.

Take the edge off and check it out:

http://www.couragecampaign.org…

Know a friend who might need a laugh? Share this video with them, download your own Arnoldbucks, then tell us your ideas. We’d love to know what you plan to do with your Arnoldbucks:

http://www.couragecampaign.org…

We’re looking forward to hearing about your adventures with Arnoldbucks.

Rick Jacobs

Chair