Midnight sessions. Seven month delays in passing a budget. Deep cuts in basic services. Regressive tax hikes. State employees out of work. School districts are deciding whether to lay off teachers or cut pay for everyone to save some jobs. People’s lives are being affected-real lives.

None of this matters. To Sacramento, it’s just collateral damage. The Legislature has for too long acted in anonymity from the safety of gerrymandered districts and the ability to put real controversial issues into Propositions instead of putting their name on a roll call.

This is the result. A majority that can’t govern. A minority that can block anything it wants despite having the support of a minority of voters.

We are literally a few steps away from sovereign default and absolute chaos in the state government. What will happen? Especially in areas like the 33rd assembly district where state workers are make up a large proportion of the buying power.

It’s time to act. We need to recall many, if not all, of the members of the Legislature and the Governor if order is not restored soon.

At the risk of oversimplification, I think that the national problems we have now are a manifestation of Republican excesses in the White House and Congress for WAY too long.  The cumulative effect of destroying regulatory oversight, budget deficits, foreign policy blunders, anti-science policy and the general lawlessness within the Bush Administration has brought us this horrible situation.  I worked hard for Obama since February 2007 and have great faith in his ability to lead us out of this mess.  I have hope for us nationally.

California’s problems are certainly related, but generally the budget problems in Sacramento are a manifestation of Democratic excesses for WAY too long.  The unions played a major role in electing many of the key political figures and they expected (and received) a good return on their investment.  It is unfair to call this a complete manifestation of Democratic excesses because Republicans fed liberally at the CCPOA and PORAC trough and delivered for law enforcement.  When it comes to SEIU, the Democrats delivered.

I’m not as hopeful for a solution in California.  We cannot continue along these lines.  We must change.  When comparing taxes among various states, some states have high sales tax but low income tax.  Others have high corporate tax but low property tax.  California is either at the top or near the top of every kind of tax.  Why is that? Do we have such superior services compared to the rest of the states?  If so, can we afford them?

I don’t know the details of all the pension agreements, but many employees get 3% per year for their last year of service.  This means that if they begin working at age 20, they can retire at age 53 at full salary for the rest of their lives.  In fact, if they continue working after 33 years of service I really don’t know why.  They are in essence working for free.  They go out and get another job.

Is there some company that anyone knows about that offer this kind of pension?  I think this is just the tip of the iceberg.  Public employees have health benefits, overtime rules, job security provisions that are rather generous when you look at it in the context of the economic pain that’s out there.

I know that people will ask me if I have no sympathy for the 219,000 working men and women of this state.  The answer is that I have more sympathy for the 1.7 million Californians who are currently unemployed (and the many more who have given up).  

We need real change and, frankly, I don’t know where it’s going to come from.  Republicans make me want to puke and Democrats have no ability to stand up to their benefactors, public employee unions.  So, I am not hopeful.

(This originally appeared in the SF Chronicle, but it’s worth noting as we look forward to another vote in a few minutes. – promoted by Brian Leubitz)

Assembly Minority Leader Mike Villines, R-Clovis, was quoted in reference to Washington’s stimulus benefit to California, saying, “It doesn’t matter if the federal government gave us $100 billion. We’d spend it and we would be broke next year.” One would like to believe that Villines was exaggerating to make a point.

Villines has been one of the strongest advocates for a more severe spending cap for state expenditures. Our current cap, which was passed by voters in 1990, was promoted by Republican Gov. George Deukmejian, and was itself a response to a more rigid cap passed at the ballot in 1979, the Gann Limit.

Without getting into the details of our present spending cap or the proposals to tighten it, good sense would dictate that we determine whether our state spending is as profligate as Villines suggests before taking further action.  

Here are some facts:

Between 1998 and 2008, General Fund annual spending in California increased by about $46 billion. Of that, $31 billion is due to inflation and population growth. How did we spend the remaining $15 billion? Vehicle owners were spared, on average $200 when Gov. Arnold Schwarzenegger reduced vehicle license fees in 2003, which voters then approved in 2004. The state had to make up the loss of those revenues, which fund local government programs, with monies from the general fund. This now costs the state more than $6 billion each year.

The next largest increase in spending is in our Department of Corrections and Rehabilitation. Beyond population and inflation growth rates, spending increased $3.5 billion. Again with voter support, California has the only “three strikes” law in the country that does not require that the third strike, which puts an offender in prison for life, be a violent or serious felony. As a result, our inmate population is quickly aging. Whereas the cost of housing a prisoner is around $42,000 annually, the price nearly doubles for those over the age of 50 and triples for those over age 60.

That leaves about $5.5 billion of annual spending increases over the past 10 years. Of that, about $2 billion is payments on budget-related debt, represented mostly by debt service on the Economic Recovery Bonds approved by voters in 2004. Another $2 billion is related to debt service on infrastructure bonds approved by voters in 2006 and prior years to rebuild our dilapidated transportation systems, hospitals and schools. Finally, in 2002, Californians overwhelmingly supported Proposition 42, which requires that about $1.5 billion of gasoline sales tax revenue be spent on state and local transportation projects.

Add to this spending the uncapped and growing cost of health care (one-third of our General Fund expenditures), California’s aging population and epidemics of childhood obesity, Type 2 diabetes and ever-increasing rates of autism, and one can easily see how state spending has grown. Due to climate change, we now live with a year-round fire season, which is costing us hundreds of millions of dollars to confront.

In our 2009-10 budget, we may be as much as $18 billion under our current spending cap, which further suggests we are struggling with a revenue problem, not a spending problem. If we cut much further into our K-12 public education system, we may see class sizes increase by 11 students and thousands of teachers fired. Be mindful that we currently rank 47th of 50 states in per-pupil spending.

While tough talk about reining in state spending may play well to a rightfully upset electorate, let’s not allow emotion to overrule facts, data and thoughtful deliberation. Ballot- box budgeting has led us down this road of fiscal jeopardy.

(crossposted from Orange County Progressive)

The local overnight sensation was the quick news hit from Sacramento that the jerry-rigged conglomeration of initiatives, gimmicks, and bills to prevent California driving off a fiscal cliff included a special bill that would send more property tax to Orange County.

Lou Correa responded by noting that this was something that he had worked on for years.

True, and this has been supported by the BOS, OCTAX, and every local Republican under the cause of Tax Equity.

From the legislative committee analysis of SB 547, introduced by Lou Correa in 2007.

After the passage of Proposition 13 capped the ad valorem  

         property tax rate on real property at 1%, the Legislature  

         responded by permanently restructuring the allocation of  

         property tax revenues.  SB 154 (Rodda, 1978) gave counties,  

         cities, special districts, and schools an amount of property tax  

         revenues in proportion to what they received in the past.  AB 8  

         (L.Greene, 1979) gave local governments their historic  

         proportional shares of property taxes, plus some of the school  

         districts’ property tax revenues, while replacing schools’  

         losses with General Fund subventions.  In response to state  

         budget deficits in the early 1990s, the Legislature reduced  

         state General Fund spending on education by shifting property  

         taxes from counties, cities, and special districts to an ERAF in  

         each county to support schools.

         The county share of property tax revenues varies greatly  

         throughout the state.  In 2004-05, for example, Alpine County  

         received 65% of the property tax collected in the county, while  

         Orange County received only 6%; the statewide average was 17%.  

         These disparities are related to the various governmental  

         responsibilities and services provided by counties statewide.  

         Some of the variables to consider are the following:  counties’  

         municipal responsibilities vary; counties have varied  

         populations that pose different needs for services, some of  

         which may be provided by special districts instead of the  

         county; some counties serve many non-residents, such as  

         commuters, tourists, and seasonal residents; and counties have  

         differing local revenue raising capacity.

                                        1

         Page 2

         SB 547 (Correa)

         SB 547 would increase the amount of property tax revenue  

         allocated to a “qualified county,” beginning in 2008-09, and  

         proportionally decrease the amount of property taxes allocated  

         to the county’s ERAF.  The amount shifted would be equal to half  

         of the amount of the prior year’s countywide property tax  

         revenues that were in excess of what the countywide amount would  

         have been if property tax revenue had grown at the statewide  

         average rate.  If this “county equity amount” is greater than  

         the property tax in the ERAF, the remainder would come from  

         school district property tax revenues.  This bill would limit  

         the statewide “county equity amounts” to $20 million in a fiscal  

         year.

         SB 547 prioritizes the allocation of “county equity amounts,”  

         starting with the county that received the lowest percentage of  

         countywide property tax revenues in 2002-03 and proceeding to  

         counties with successively higher shares until the $20 million  

         limit is reached.  As a result, few of the 16 counties with  

         below-average property tax shares are likely to benefit in any  

         given year.  Orange County, with the lowest percentage share at  

         6% and relatively high amounts of property taxes collected,  

         would garner the bulk of the $20 million in any year that it  

         qualified.  This bill also states legislative intent that the  

         revenues a county receives would be dedicated to the  

         construction, operations, and maintenance of new or existing  

         adult or juvenile criminal justice facilities.

         Staff notes that SB 547 would initially apply to 16 counties in  

         the following priority:  Orange, Yolo, Riverside, Stanislaus,  

         Contra Costa, San Bernardino, San Benito, San Diego, Nevada,  

         Monterey, Solano, Merced, Ventura, Calaveras, Napa, and  

         Sacramento.  This bill does not allow the revenues to be spread  

         equitably among these counties.

A few quick updates.

First: Two great sources of Twitter updates. John Myers Capitol Notes here and Anthony Wright of Health Access here.

From the twitter updates I’ve seen so far, it looks like the Governor is leaning very, very hard on Cogdill, Ashburn and Dave Cox.  At this point it looks like Sen. Cox (R-Fair Oaks) is the key vote.  Incidentally, Maldanado is doing us no favors.  Good thing nobody ran against him last year.

Another interesting tidbit from the Capitol: Asm Chuck DeVore, (R-OC) and Republican candidate for Boxer’s Senate seat, attempted a coup on Assembly Minority Leader Mike Villines.  It failed.

Update by Robert: DeVore resigned his post as whip in the aftermath of the apparent leadership struggle, thereby taking his ball and going home:

“For these reasons, I believe it is appropriate for me to resign as Chief Republican Whip, effective immediately.  I can no longer participate as a leader on a team that is preparing to make a fundamental mistake of colossal proportions.  For the sake of California I hope I am wrong – however, I fear I am right and that this tax increase and budget deal will result in more harm to the Golden State than good.”

In the Byzantine world of Yacht Party politics this of course is good news for his chances of winning the party’s nomination to get pummeled by Barbara Boxer in 2010.

Update by Brian: Per John Myers’ tweets it appears Dave Cox is trying to get Prop 10 (tobacco tax) money diverted from children’s health care programs. So far, it seems the Democrats are resisting. While we’re speaking of kids, the CA Budget Project has a chart (PDF) of how much the deal would cut from K12 funding by district.

Update by Brian 6:30am: Well, it seems the legislators have pulled an all-nighter, as the Senate continues to be one vote short.  John Myers has been a real sport and tweeted throughout. Sen. Cox announced at about 1am that he was a no on the budget, despite the changes to Prop 10 that were done only to please him. On another note, apparently when the Assembly went into lockdown, they really went into lockdown, Assembly sergeants-at-arms at the doors and everything. Over in the Senate, they dimmed the lights.

This process has been a disaster.  The worst of everything that we’ve been going through for months, even years, with the Republicans.  This is a fancy stick-up, with a patina of legitimacy. Who knows if a deal will be reached, but at this point there can be no question from the High Broderists who caused this.  Every newspaper, every television station, every radio station should do what the Media News group did and call out the Republicans for their stickup of the state.  

Their sheer cowardice to face down their own interest groups is remarkable. It is truly a sad day when a group of elected leaders, when faced with a clear policy decision between what is good for the state and what is good for the politician, have decided that they choose themselves.  They have willingly played along with the anti-tax rigid ideology, and their capacity to actually lead on their own has withered away.

What happens from here is anybody’s guess. Maybe they get the additional vote, maybe they don’t.  Perhaps, Arnold will be willing to sign the majority budget agreement that the Democrats passed back in December now, because lord knows we cannot simply do nothing.  Arnold wanted to play brinksman, well here it is.  We are standing at the precipice, does he want to jump?

Update by Brian: Quick thought – how big is that LA Board of Supes victory by former Sen. Mark Ridley-Thomas.  If he were still in the Senate, rather than the seat being vacant until March, the deal would have gone through by now. You have to wonder whether maybe labor wishes they hadn’t worked quite so hard to help him defeat Bernard Parks…

It’s clear that he doesn’t.  He probably thinks it will cost him his re-election in 2010.  That may or may not be, but certainly it’s his point of view.  There is no other reason why the vote was rescheduled.  And it’s certainly why Dem leaders are offering him incentives (someone less charitable might call it a bribe):

In what some might call an amazing coincidence, a measure to give Orange County an extra slice of the state budget pie was included in Saturday’s deficit-closing proposals, the fate of which rested heavily on the vote of an Orange County state senator.

The senator, Lou Correa of La Habra, was the only Democratic member of the upper house reported to be “noncommittal” on whether to support a $40 billion package of tax hikes, spending cuts and loans designed to close the gap in California’s budget.

Correa’s vote is vital because Senate Republican leader Dave Cogdill of Modesto said that for any Republicans to cast votes for the package – and three are needed to give it the 27-vote two-thirds majority it needs – all Democrats will have to vote aye. “I just don’t think it gets out if he (Correa) doesn’t go up on it,” Cogdill said earlier this week.

Capitol sources, who asked not to be named while commenting on private negotiations, said language had been inserted in the massive 33-bill package that would give Orange County $35 million in additional property tax revenues in the coming fiscal year; $35 million in the 2010-11 fiscal year, and up to $50 million annually after that.

Further delays mean he’s further away from saying yes to the whole thing.  And of course, this is another perverse outcome of the Yacht Party’s stranglehold on the budget process – Correa’s marginal seat shouldn’t really hold the key to whether or not this passes.

The Sacramento Bee is reporting a special Correa Carve-out in the budget that would bring badly needed revenue to Orange County.

Anybody want to bet against his support of the budget now?

Capitol sources, who asked not to be named while commenting on private negotiations, said language had been inserted in the massive 33-bill package that would give Orange County $35 million in additional property tax revenues in the coming fiscal year; $35 million in the 2010-11 fiscal year, and up to $50 million annually after that.

Correa was elected by a razor-thin margin in 2006 after a campaign in which he repeatedly pledged not to vote for tax increases. In an editorial Friday, the largest newspaper in Correa’s district, the Orange County Register, urged him to vote against the tax-hike portion of the budget package.