Greg Lucas took a look at tax receipts for the first week of April, and the news is gloomy.

In 2008, not exactly a boom year either, $703,166 in personal income taxes was paid in the first eight days of the month.

During the first eight days of April 2009, $456,227 came over the transom.

By April 30 2008, nearly $12.9 billion in personal income tax revenue was collected.

This year, Governor’s Schwarzenegger’s Department of Finance predicts a monthly total of only $8.9 billion in personal income tax receipts.

If the first week is any indicator, revenues may not even meet that lowered expectation.

Lucas surmises that the $8 billion revenue gap for 2010 announced by the Legislative Analyst a few weeks back could potentially double, based on these returns and the possibility of losing particular ballot measures in the May 19 special election.  I don’t think there’s any question that the legislature will return in June to something over a $10 billion gap to deal with.  And as we know, Zed Hollingsworth and the even Yachtier Yacht Party will want to fill that with cuts to already emaciated state services.

(as a side note, I love that there are almost 200 entries in a Google search for “Zed Hollingsworth.”  Memewatch!)

But in fact, there are ways to deal with these problems, even in a down economy, that make the most sense for the vast majority of Californians.  The Commission on the 21st Century Economy released their latest set of reports today, and what jumped out at me was their report on the potential of a split roll property tax, which would keep residential rates at current levels while modifying those for commercial and industrial properties, and as a result, California could see a $7.5 billion dollar annual boost to their budget bottom line.  Obviously, the typical doomsayers like the Chamber of Commerce will come out and call this a “job-killer” and cite the negative impacts on the economy, but considering that even in these rough economic times, corporate businesses just got a $1.5 billion dollar tax CUT, I don’t take their concerns seriously.  They have cried poor for decades, and as a result the state has suffered deeply.  While carve-outs for local small businesses may be part of a solution, having commercial property taxes frozen in amber has led to municipalities literally passing the cup to fund services.

The City of Orinda wants your help, and your donation is tax deductible.

There are no bake sales in the works, but Mayor Sue Severson plans to solicit donations for extras the City Council does not want to pay for out of the general fund.

Donations could pay for events such as Orinda in Action Day, or they could pay for public art such as the popular frog sculpture in the downtown fountain without draining the city’s general fund, Severson said.

“Our budget is so minimal and we have very little flexibility in what we’re able to do,” she said.

The city’s roads and drains need more than $100 million in repairs the city can’t afford.

And Orinda’s average income in 2000 was $132,531.  Imagine the needs of the cities at or below the poverty line.

We cannot survive as a state with this kind of inequity.  The state must be freed from these artificial bonds and allowed to address needs properly in the way every other state in the union can.

I’m telling you, this special election campaign resembles the Bush-Cheney “9-11 9-11 9-11 Terrist comin’ to kill you in your beds!!!!1!” 2004 campaign more with each passing day:

As he launched a radio ad campaign Tuesday for his budget measures on the May 19 ballot, Gov. Arnold Schwarzenegger said failure to approve the package would worsen the state’s already-dire fiscal crisis.

“If they don’t pass, we will be facing a $50 billion problem,” Schwarzenegger said at a meeting with Daily News editors and reporters. “It will mean massive cuts in education, hospitals, prisons. These are things people don’t want to see cut.”

$50 billion.  How does the Governor arrive at that figure?  He includes $16 billion dollars for the two years of regressive taxes that would be washed out in 2012 and 2013 if Prop. 1A fails.  He includes an expected lawsuit from education interests to force payment of $9 billion in raided Prop. 98 funds if 1B fails.  He includes the $6 billion that would not fill budget gaps from the last budget if Prop. 1C-1E fail.  And then… I don’t know, that’s only $31 billion, I guess $50 billion sounds like a nice big number.

You can put it on posters!

This is not the first time the Governor has flat-out made up numbers to win an election.  That was his road to victory in 2006, when he lied about Phil Angelides’ tax programs.  The True Lies are back, and sadly I don’t expect a soul to call him on it.

Let’s partially accept the Governor’s premise and agree that we would have a deficit caused by cutting two years’ worth of tax increases in 2012 and 2013.  Is he suggesting that the legislature would be barred from acting on anything for 3-4 years until that future problem arises?  He might as well say we have a $200 billion dollar problem, extrapolating out to 2050.  

The “doomsday scenario” only exists if you accept the premise of the conservative veto.  Only then does California risk going over the cliff.  A responsible, functional legislature that has the ability to reflect the will of the people of the state is in no danger, which is why the only reforms anyone should be voting for are the full repeal of the 2/3 requirement for budgets and taxes.

Somehow the Governor feels that ratcheting down services and leaving behind millions of Californians is the “responsible” course.  Right now we’re at the bottom of per capita spending in almost every major category – 44th in health care, 47th in per-pupil education spending, dead last in highway spending and 46th in capital investment among all states.  Heck, the state can’t even get people their unemployment checks in a timely fashion.  The so-called “responsible” course has utterly failed, and the Governor and his allies want to constrict this pitiful investment even more.

I will quickly tire of these nonsense efforts to scare people into backing another layer of restriction onto an already failed budget process.  Hopefully the voters feel the same way.

UPDATE: This is amazing.  Shane Goldmacher queries the Governor’s spokesman on where the hell Arnold came up with the $50 billion dollar figure, and look at the response:

“He was speaking hypothetically,” said spokesman Aaron McLear. “His point was if we don’t reform our budget system then we’ll be right back where we were with that huge budget deficit.”

I’m sure he’ll continue to “speak hypothetically” in the most hyperbolic way possible.  Some would call this manner of speaking, um, “lying.”

I think we’re certainly close to finding out, with respect to the May 19 special election.  While recent polling shows the electorate predisposed to opposing it, the money race is extremely lopsided in favor of the Yes side, and I suspect that will not change.

Led by Governor Schwarzenegger and a strange bedfellows coalition of big business and educators, the main campaign committee now reports donations of almost $3.7 million over the last six weeks.

Tops on the donor list is former Univision CEO Jerry Perenchio, a longtime Schwarzenegger campaign donor, who dropped $1.5 million into the campaign late last month. But more recent big players are also worth noting. Last Friday, official campaign finance reports showed a $500,000 check written by Chevron and a little more than $250,000 from political switch-hitter Reed Hastings. Hastings, the founder of online video rental giant Netflix, is a former member of the state Board of Education and has a track record of contributions to both the GOP governor’s causes and to a bevy of California Democrats […]

Meantime, there’s pretty much zippo reported so far in the way of money in opposition to any of the six budget-related ballot measures. Tops in cash seems to be the campaign opposing Proposition 1E, the temporary transfer of mental health money to the state’s general budget needs. That campaign reports a little more than $120,000 on hand.

The use of the Prop. 1B bribe (I really don’t know what else to call it) to split the labor coalition, and the co-opting of the legislature through predictable fearmongering has made this a virtual clean sweep for the Governor in the fundraising battle.  

Additional support for the Yes side will be provided by the bipartisan fetishists in the media, whose “not too hot, not too cold” approach to problem solving should be completely discredited by the absolute and total mess made of California in its name, but which somehow still has some cachet.  Dan Weintraub, good little centrist that he is, decides that a spending cap will – by itself – save the state from boom-and-bust budget cycles, when the history of such measures clearly shows that they ratchet down state spending to an unsustainable level that ruins quality of life for the broad mass of citizens.

TABOR, a (Colorado) state constitutional amendment adopted in 1992, limits the growth of state and local revenues to a highly restrictive formula:  inflation plus the annual change in population.  This formula is insufficient to fund the ongoing cost of government.  By creating a permanent revenue shortage, TABOR pits state programs and services against each other for survival each year and virtually rules out any new initiatives to address unmet or emerging needs.

Declining services since TABOR’s enactment have become increasingly evident in most major areas of state spending:  K-12 education, higher education, public health, and Medicaid.

“”[Business leaders] have figured out that no business would survive if it were run like the TABOR faithful say Colorado should be run — with withering tax support for college and universities, underfunded public schools and a future of crumbling roads and bridges.”” Neil Westergaard, Editor of the Denver Business Journal

This fanciful notion that you can just sock money away for a rainy day and not then be restricted by the complete refusal to raise taxes, combined with tying long-term future growth to the worst three fiscal years (this year and the next two) in the state’s history, and the fact that the rainy day fund would have to be replenished even in DOWN fiscal years, does not comport with the facts.  We have verifiable data showing what happens when you artificially limit the size and scope of government and it’s neither pretty nor desirable – before Colorado repealed TABOR, they were last or nearly last in spending in almost every major category across the board, with disastrous real-world effects on quality of life.  The rainy day money never gets spent, it becomes another part of the budget out of the hands of lawmakers, and will only increase the deficit while crippling Californian’s ability to cope with the downturn.

But one guy making that argument on a computer doesn’t have the impact of a phalanx of glossy ads warning “Vote for this OR DIE!!!!”  Given the paid media and earned media blitz on the Yes side, we really will see how much money can buy.

I forgot about this (which is why I’m such a good reporter!), but the White House Health Care Forum in Los Angeles and several satellite sites around California is streaming at HealthReform.gov right now.  Todd Beeton is liveblogging at MyDD.

Building off Brian’s post, George Skelton’s discussion of Prop. 1C gets things about right – the choice is between a terrible public policy and deeper debt.  Supporters of the special election will only show you one side of that argument, the expanding budget deficit that would result from failure, wrapping that into a fearmongering message of urgency.  Opposers of the special election prefer to look at the actual policy, which Skelton describes accurately.

Prop. 1C — the “Lottery Modernization Act” — is one of six budget-related measures proposed by the Legislature and Gov. Arnold Schwarzenegger. It is by far the measure with the biggest immediate money impact.

It would authorize significant tweaking and expansion of the state lottery, creating more winners. And it also would allow the state to borrow $5 billion immediately against future lottery revenue.

Those should be separate questions: 1) Should the state expand its gambling operation? 2) Should Sacramento take out a loan for, say, 30 years just to help pay one year’s worth of daily expenses? […]

You could also call it a payday loan. That’s how far Sacramento has fallen.

This is probably the easiest $5 billion the state can pocket, even if it would have to pay back double, including interest.

Put aside the fact that lottery revenues have dropped consistently over the past several years (per capita participation is among the lowest in the nation), and that, even if this scheme of more advertising and bigger payouts worked, you would be balancing the budget on the backs of a lottery-buying constituency composed mainly of the poor.  But borrowing policies like this, as a result of putting off tough decisions and mortgaging the future for 30 years, are why our deficit bursts at the seams relative to other states.  In the long term we will pay far more for this borrowing that could ever be brought in.  The solution from the legislature and the Administration, literally, is to not call it borrowing.  David Crane (Arnold’s economic advisor) initially makes a decent point, then hides behind the word “securitization” to mask the reality.

Crane maintains that both tax increases and government spending cuts slow economic recovery. Government programs are “a way of keeping more people employed,” he says. “In a recession, you want government to be counter-cyclical — the teeter-totter” to a falling private sector.

“The overriding principle is that, at a minimum, you want government to be retaining the same level of expenditures, if not expanding.”

Crane points to President Obama’s economic stimulus package, which is heavy on new spending.

Of course, the feds can run up huge deficits and print money. States can’t. And many California conservatives would rather see state government go belly-up than pay higher taxes.

Part of the distasteful remedy may be the lottery borrowing. Only don’t call it “borrowing” in front of Crane. It’s “securitization,” he insists. Future lottery revenue would “securitize” the state’s repayment of $5 billion in bonds.

This is a semantics game with political consequences. When the “borrow” word is used to describe the lottery proposal, I’m told, voter support for it drops by 25 percentage points.

Of course, it is borrowing – when you issue bonds and promise to pay them back later, you’re borrowing.  But the “securitization” model also masks the fact that California officials will have to go out into the market and find investors to buy debt based on future lottery revenues.  Despite the success of recent state forays into the bond markets, that’s not such an easy sell:

The ballot measure simply gives the state the legal authority to go out into the financial markets and find investors willing to purchase debt backed by a revenue source that has declined since 2005-06.

Before counting on quick cash from the sale of lottery bonds, it is worth reviewing borrowing-related assumptions made in recent budget agreements, such as the $1 billion in proceeds from the sale of EdFund booked as part of the 2007-08 budget agreement, a sale that was never consummated, or the $1 to $2 billion in proceeds assumed in various budgets from proposed, but never sold, pension obligation bonds. Or the $1 billion in proposed, but never issued, bonds for transportation programs that were to be repaid out of tribal gaming receipts. The careful reader may note a pattern here – a pattern that began long before the global meltdown in financial markets that has made obtaining loans more difficult for even the most creditworthy borrowers.

This isn’t a serious funding measure, it’s an accounting trick – a way to take $5 billion off the books quickly and easily with a minimum of pain.  It’s symptomatic of the failed solutions taken by this legislature and this Governor for years, which constantly try to push off solutions and never deal with the consequences (of course, the needy in this state always do).  That anyone would sink money into protecting this status quo speaks to a failure of imagination, and a willingness to delay fundamental reforms that must happen before it’s too late.

On Monday morning the final regional White House forum on health care reform will be held in Los Angeles and at satellite sites throughout California, in San Diego, Oakland and Clovis.  Details can be found at HealthReform.Gov.  California certainly figures as a good place to talk about health care reform; a study released today by Families USA shows that 37% of all Californians were without health insurance during all or part of 2007 and 2008.

About 12.1 million Californians, or 37% of non-senior residents, were uninsured for at least one month during 2007 and 2008, Ron Pollack, executive director of Families USA, a Washington, D.C.-based group, said Thursday.

Most of them were uninsured for at least six months, Pollack said, and more than 80% of them were in working families. Minorities were more likely to be uninsured; 53% of Latinos and 38% of blacks were uninsured during the two-year period; for whites, 25% were uninsured.

They were among the 86.7 million U.S. residents who went without insurance for at least one month during the same two-year period, according to the organization’s count.

The legislature is working to make sure this number doesn’t get any larger.  They passed a bill yesterday, AB23, allowing workers laid off from small businesses with under 20 workers to apply for the same health insurance subsidy that workers in larger firms can to retain COBRA, as part of the federal stimulus package.  Of course, that would impact 60,000 to 100,000 Californians, which is a drop in the bucket given these latest numbers.

Our broken health care system does not merely have an effect on the margins.  A near-majority of Californians face this crisis in a very direct way.  And with the recession only getting worse here, and slipping into Depression in some areas, something must be done as soon as possible to remedy this, both for fiscal reasons and reasons of basic humanity.