Schwarzenegger has pledged to make an unspecified $600 million in cuts through his line item veto powers.  And boy oh boy did he take out the blue pencil to the Lieutenant Governor’s office.

He cut the LG’s budget by 62%.

LG. Garamendi issued a statement, and you have to give him credit for using this a teachable moment on structural issues. Of course, he’s right about the borrowing being a temporary fix.

“The additional cuts imposed by the governor in his line item vetoes further harm the vulnerable and the ability of the state to thrive in the years ahead. Thousands of hard working, dedicated California citizens will lose there jobs as a result of the budget. My heart goes out to them and I will continue to do all that I can to lessen the impact that this budget has on them,” Lieutenant Governor John Garamendi said. “Let me assure the people of California, that even though the Governor has cut my office by 62 percent, I will continue to do the work they elected me to do.”

“For some time I have been an outspoken critic of the budget process and the governor’s leadership because of the impact this budget will have on California’s education system, ability to compete in the world market place, and on the most vulnerable Californians. The budget problems have festered for five years and each year the problem has been kicked down the road resulting in this budget crisis. The structural problem of the budget has been known for years, yet it is not fully addressed in this budget. The solutions are temporary and insufficient, the borrowing continues and the budget problem will reemerge in just a few months.”

UPDATE: The Bee points out that the Insurance Commissioner didn’t face such a stiff hack job:

Schwarzenegger did not, however, inflict the same budgetary punishment on Insurance Commissioner Steve Poizner, a Republican candidate for governor, who has been sharply critical of the budget deal’s $12-plus billion in new taxes.

But Garamendi should have known as much, because, well, IOKIYAR.

For a full list of the cuts, find the Guv’s full list here, and flip to page 8.

State Superintendent for Public Instruction Jack O’Connell discusses the impact of the budget on education today, and it’s predictably negative.  After going through the particulars ($7.4 billion cut to Prop. 98 funding, additional flexibility for local control, a repayment measure on the ballot to return $9.8 billion to education under Prop. 98 in the future), he makes a strong announcement:

The painful budget process at our state and local school district level calls out for reform of California’s dysfunctional budgeting process. It is time for a sincere and frank conversation about reform. Central to this conversation is the idea of throwing out the two-thirds vote requirement to pass a budget and simply using a majority vote. Nearly every state in the nation and Congress, as well as counties, and cities use majority votes to pass their budgets. California should follow suit.

I understand that the minority party may feel that this would make them irrelevant to the process but, if anything, it would hold their majority party colleagues even more accountable.

Most importantly, a simple majority vote would protect our schools and districts from the instability they are forced to endure anytime the Legislature cannot reach a budget compromise.

It is time to bring about substantive changes to the way we do business in Sacramento – we owe the people of California this much.

Good for him, and it’s explained and framed well.  And now we have to line up our lawmakers along the fault line of a majority vote restoring democracy versus an arbitrary shift like 55%.

Majority Vote

John Burton, Jack O’Connell

55%

John Garamendi, Gavin Newsom

Every leader in the Democratic Party should be able to articulate where they stand on this crucial issue, the most important one facing the state.  Call your lawmakers and ask them what they prefer.

The California Budget Project has done a preliminary report on the “solution” (and I’m glad they put it in quotes) reached yesterday and expected to be signed by the Governor today.  They demystify the fact that this is, once again, a short-term fix that will actually worsen our budget situation in the future.  The $42 billion dollar hole from this year is a direct result of constant short-term fixes over the past several decades, pushing off the problem until the current legislators are out of office.  Even in this budget, it is balanced through $6 billion in borrowing, which might as well be magic since we have the worst bond rating in the country.

The worst part of this is the spending cap, which could cripple future budget and severely ratchet down state services well beyond demand or even the rate of inflation and population increases.  We have seen from other states how this is a hammer on the heads of the least of society and it must be fought in the May 19 special election.  But the CBP is just as perturbed about the massive tax cuts, at a time of a $42 billion dollar deficit, to large multinational corporations:

Give multi-state corporations the option to choose between two different formulas for determining how much of their income would be subject to tax in California. This provision would be in effect in tax years beginning on or after January 1, 2011 and would cost $650 million in the first full year of implementation, eventually increasing to $1.5 billion annually. This provision provides no benefit to small businesses that only operate in California.

The tax breaks for movie companies and new construction home buyers and for hiring new workers (which history has shown doesn’t end up increasing employment but increasing employer chicanery with their payrolls) are all temporary, as are the tax increases.  The only PERMANENT tax in the entire plan is this giveaway to giant corporations like Exxon.  This is why Richard Holober claims that big business is the “only winner” in this budget.

The worst of the business tax cuts is a permanent change in the formula for calculating the income tax for multi-state and multinational corporations. This produces an initial big business tax cut of about $700 million a year. The State Senate analysis estimates the recalculation will eventually yield a corporate tax reduction – and state revenue loss – of $1.5 billion a year. This is not tax fairness. Combined with the tax hikes on everyday Californians, it is redistribution of income away from workers and consumers and into the pockets of our state’s biggest businesses. And it provides no tax savings for the mom and pop businesses that we usually count on to provide the camouflage for these corporate welfare schemes.

Another major sin in this budget are the agreements secured by Republicans to essentially increase greenhouse gas emissions by relaxing environmental regulations for large diesel vehicles.  This is another example of Arnold Schwarzenegger being a complete hypocrite, running around the country painting himself as the “green governor” while ramming through a provision directly contrary to that.

Like the budget itself, AB 8 XX was not the subject of any public hearings. The measure’s scaling back of emission controls was one of many concessions sought by Republicans in order for three of them in the Assembly and three in the Senate to vote for the budget.

Since there were no public hearings on the measure, it was easy for the GOP to side with the construction industry and ignore the majority of its members who want California to reduce greenhouse gas emissions and improve air quality.

A 2006 statewide by the Public Policy Institute of California found that 62 percent of Republicans strongly support state action to ratchet down greenhouse gas emissions. So do 73 percent of Democrats and 70 percent of independent voters.

That same poll found that two-thirds of likely voters for rolling greenhouse gas emissions back to 1990 levels by 2020. That is the legislation that became AB 32.

Finally, there is $5.8 billion that will be on the ballot for voters to agree upon, including a privatization of the lottery (which assumes a $5 billion sale… who is lining up to buy the California Lottery?) that would be a net loss of revenue for the state in the long-term, and $800 billion in raids from various voter-approved funds for things like mental health treatment.  Considering how unpopular the legislature is these days, there is no guarantee that any of these will pass, which will leave another hole to fill by June.

These are just some of the details that reinforce the object lesson that major fundamental reforms, in particular repealing the 2/3 rule, are desperately needed.  None of the above measures help the state.  They were put in to placate a fanatical minority who is emboldened by a conservative veto.  Sign the pledge to repeal 2/3.

In all the media’s drooling over the open primary, it’s nice to see somebody pointing out the obvious problems.  Give Steve Lopez a cookie:

This annual budget nonsense has a lot to do, as well, with the state’s over-reliance on wildly fluctuating income tax revenue, and with California’s requirement that the budget be passed by a two-thirds majority.

Make it a simple majority vote, already. We would have been done with this thing three months ago. And as Burton asks, was the end result so brilliant it had to take this long? (LAT 2/20/09

I don’t really get why this is so hard for people.  Had there been majority vote rules, this would have been done within a few weeks.  Heck, when the decision was made to attempt a majority package, it was done in no time.  The state has a working majority in the Legislature, it’s just that the majority isn’t allowed to rule.

Why must people search for reasons why we can’t get the votes? We can’t get the votes because here, elections do not have consequences. You can get trounced, as the Republicans do every year, and yet retain power. Look no further, this is the problem. This one simple fix would solve the bulk of the legislature’s problems.

Lopez also points out that term limits haven’t helped either, and I wholeheartedly agree.  It’s nice to have people develop relationships and be able to work together.  It’s good to develop institutional memory outside of the leg staff. And term limits are unquestionably bad policy.

That being said, I think he overemphasizes the “dealmaking” aspect.  I mean, considering the fact that he talked to a bunch of termed-out legislators that’s no shock.  I think what nobody really wants to acknowledge is that the reason the old-timers could be deal makers is for reasons of power.  Specifically, a long-term leader is much tougher to displace through a palace coup and a long-term legislator is tougher to primary. This is just the power of incumbency and ackowledging that it’s not the people but increased power vested in a few people.

Yet, overall, it’s refreshing to see the Lopez column in a sea of open primary drooling over Maldo.

(Well, let’s say hi to Mr. Hedrick once again. – promoted by Brian Leubitz)

Today, the DCCC added Ken Calvert’s name to its list of “House Republicans Hypocrisy Hall of Fame” for “celebrating the benefits of President Obama’s economic recovery bill in their districts” even though Mr. Calvert voted against it.  

“It’s no surprise that House Republicans are betting on failure, while President Obama and Democrats are investing in success.  But for House Republicans to unanimously vote against the economic recovery bill in Washington and then take credit for it at home is the height of hypocrisy,” said Jennifer Crider, Communications Director for the Democratic Congressional Campaign Committee.

Calvert made the Hypocrisy Hall of Fame when in early February, in response to a series of radio ads launched by the DCCC Working Families First criticizing his vote against the Stimulus bill, Calvert told the Press Enterprise, “It’s a boondoggle…The more people that know I voted against that bill, the better.”

Mr. Calvert is in the 44th Congressional District this week for the Congressional District Work Period, and he is now taking credit for critical stimulus spending that will be allocated to the 44th CD as a result of the passage of Economic Recovery Bill, saying “All of us in the Inland Empire will do what we can to direct as much money as we can.” [The Press Enterprise; 2/13/09]

In addition, Mr. Calvert added an amendment to the bill to renew a pet program when he had no intention of voting for the Stimulus.  When his e-verify amendment was stripped out of the bill, he told the Press Enterprise:

“The one candle in the darkness of this disastrous bill was the reauthorization and requirements to use E-Verify,” Calvert said. “Now all we are left is a bill that places illegal immigrant interests above those of hard working American families and leaves the bill at the foot of future generations.”

In parts of the 44th CD unemployment has already risen into the double-digits.  The Stimulus Bill is estimated to bring 9000+ jobs to the 44th CD, and in Riverside – the district’s largest city – the City Council estimates it could decrease the unemployment rate 5-6%.  Mr. Calvert is once again demonstrating he is out-of-touch with the needs of his constituents.

As you know, we came within 2% of defeating Mr. Calvert last November.  We are gearing up early and stepping up our fundraising efforts so we can wage an aggressive campaign against Mr. Calvert for 2010 and bring common sense back to the 44th Congressional District. Visit my website at www.HedrickforCongress.com to learn how you can help.  An early donation to the campaign would be much appreciated!

 

Dave Johnson, Speak Out California

California finally passed a budget.  It is a bad budget, cutting essential services, borrowing a tremendous amount, selling our lottery revenues and giving a huge tax break to big out-of-state companies.  Each of these came from demands by the very, very few Republicans who agreed to vote for the budget at all will, of course, just get us through another year while making it ever more difficult to pass future budgets.

California’s 2/3 requirement means that a few corporate-funded extremists can hold the rest of us hostage.  So they had to make a terrible deal to get the three Republican votes required by the 2/3 rule, or else lay of tens of thousands and stop paying California’s bills.  We the People of California were all held hostage to that threat.  

The resulting deal was that if We, the People want schools, police, firefighters, roads & bridges, courts, all the things our government does for us, we had to agree to tax breaks for the big multinational corporations that kick in so much money to help elect the anti-government extremists. So the big companies – the kind that come in and crush local California businesses – get a big tax break while the rest of us have our taxes raised.  Oh, and the oil companies can continue to take our oil out of the ground for free and then sell it back to us.

Here are some reactions around the California netroots:

David Dayen at Calitics,

“The cuts are going to be really, really bad: 10% across the board for education, huge cuts for public transit operations, health care, etc.  The new revenues basically fill in the loss of revenue from massive unemployment.

[. . .] The “single sales factor apportionment,” which is the massive business tax cut, doesn’t kick in until FY2011, predictably and conveniently after Gov. Schwarzenegger is out of office and it will be someone else’s problem to make up the revenue!  It’s almost like somebody planned it that way!”

Richard Holober at Consumer Federation of California,

“The deal reported today does not call on all California taxpayers to share in the sacrifice. Working Californians will face billions in higher sales tax and income tax rates. But businesses win about one billion dollars in new tax breaks.  $700 million in corporate tax cuts result from a recalculation of how California taxes the profits of big multinational corporations.   According to the Senate Analysis, the windfall to multinational corporations, and the revenue loss to California will eventually grow to $1.5 billion.”

Robert Cruickshank at the Courage Campaign blog,

“The only way out, and the first reform that we must undertake – the tree blocking the tracks, the door that opens the path to all other reforms – is eliminating the 2/3 rule that gives conservatives veto power over the state and turns the majority Democrats into a minority party on fiscal matters. It’s been talked about frequently on Calitics and in what remains of the media’s coverage of state politics. So it seemed time for an in-depth discussion of the issue and the prospects for restoring majority rule to California.”

David M. Greenwald at California Progress Report,

“Many Democrats and political observers fear that Maldonado strong-arming the legislature may set a bad precedent for future attempts at getting a budget on time.”

So here we are.  Our structural problems have enabled extremists to increase … our structural problems.  We are one more step down the road to intentional ungovernability.

Over the next several months, we who love this state must act to fix this.  We must get rid of this 2/3 budget-vote requirement that allows extremists to hold us hostage.  An initiative changing the 2/3 vote requirement is long-overdue but we’ll need the support of every forward-thinking voter to make it happen.  Let’s work together to ensure that it does.

Click through to Speak Out California

I find myself debating this quite often in the aftermath of the budget.  At first, I really thought Abel took this one hands down. After all, he held this thing up for days upon end just to get himself a few perks.  But I’ve decided to make a case by using one example for each of them, as I seek to answer this eternal question.

The Case for Maldo:

But there is no better example of the case for Abel winning this particular award than the $1 million for the controller’s office that Robert just described.

Not only does it not save us all that much money, but actually ends up costing us over $5mill over the next 6 years. It seems that the move itself was a cost-cutting measure.  The Controller’s current space is in some pricey real estate area, and they will now be forced to stay there. The million bucks was simply intended to provide furniture for the new, cheaper office space.  Now the state will be stuck paying for both offices as there is no where for the controller’s employees to sit at the new place.

Let’s be clear here, Maldo didn’t object to the other $128 million in annual state spending for furniture.  No, he objected to this money because it was politically advantageous. How cute.

The case for Arnold:

Oh, the case for Arnold, there are simply such a selection of events to choose.  But, let’s go with today’s press conference.  I can forgive the fact that he stood up there and essentially just read this memo, numbering included. The memo also include a stupid slideshow of a four legged stool to illustrate his point that the plan needed all four legs of the stool to stand. If I send him a picture of a three legged stool that stands perfectly well, do we get to pull one of these “legs” off of this stupid plan? If so, it would be a tough call between 3 of the four legs, “economic stimulus” aka attacking workers’ rights, “government effeciency” aka attacking environmental protections, or spending reductions.  Tough call.  Governor, I await your response on that.

And then Arnold flat-out ignores a question about 2/3 to instead answer a question about open primaries. It was clear that the open primary was Arnold’s plan all along. His response to one question about how he chose to work with Abel went something like this:

He came to me and he was very passionate open primaries and that’s something I support, so I thought we could work together.

Ummm, right, with the way he talked about open primaries, it was clear that this is what they were focusing on all along.  This was no last minute surprise in the Horseshoe, it was his favorite dream come true.  

I think what we have to do is create open primaries, you saw what happened on the floor. You have to bring people to the center. We have legislators so far out to the left and to the right. It’s very hard to get them together. You need redistricting reform that has passed, and you need to have open primaries. We need to change the system itself that creates this kind of situation where people get tied down and draw a line in the sand. All of these things are not good for people of CA, we want to create a system where the legislator work together to solve the problems.

Not only is there no evidence that open primaries empower moderates, see Vitter, David, but it also saps resources that could go to competitive races.  For example in the 2008 cycle there would have been 9 additional competitive races if the open primary were in place. And guess what, they were all between two Democrats.  Would a second race between Loni Hancock and Wilma Chan really have created more moderate legislators?  It’s doubtful at best.

Yet he ignores the one (and only) reform that would have completely prevented this bullshit: ending the 2/3 supermajority requirements for taxes and budgets.

So, who is the winner?  Tough call, but I go with Arnold for now.