We heard last week about outlines of the Parsky Commission report that would radically shift the tax burden in California.  We even heard that offshore drilling may have been snuck into the draft at the last minute.  Last week, the commission held a public meeting which featured more details, including the intimation that 3% of the population would see half of the tax break under the Parsky plan.  They made the public wait for seven hours and then gave one individual a minute to make a comment.  Yesterday, the final public meeting was held, and right before it, Jean Ross offered some facts and figures showing how the commission’s recommendation would amount to the Latvia-ization of the state of California, with a massive transfer of wealth to the upper classes at the expense of working families.

The biggest winners would be the state’s millionaires, who would receive personal income tax breaks averaging $109,000 per year. The biggest losers would be middle-income families who would receive a tiny, if any, reduction in their personal income taxes and who would pay substantially more for goods and services due to the new “value-added” tax the Commission proposes to replace revenues lost due to the tax cuts for the wealthy and repeal of the corporate income tax.

The magnitude of the shift proposed by the Commission is nothing short of stunning. The changes to the personal income tax structure alone would reduce income taxes paid by the poorest 62 percent of California taxpayers by $4 per year, on average, while providing six-figure breaks to the millionaires. The bottom 81 percent of the income distribution – the vast majority of all Californians – would receive 10 percent of the personal income tax cut, while the top 0.2 percent would receive 27 percent of the benefits.

And that’s the “good news.” The Commission would repeal the corporate income tax and the state’s portion of the sales tax and replace it with a new tax on business net receipts – a tax that has never been tried anywhere in the US – that the Commission’s own consultant notes would raise prices of goods and services, while exerting downward pressure on wages and benefits […]

Some might be willing to support these changes if they ended California’s persistent budget crises. But again, the Commission’s own estimates predict that revenues raised by the new tax system would grow more slowly over time than those raised by the state’s current tax system. Thus, the Commission’s recommendations would lead to larger, not smaller, budget shortfalls in the future.

At the committee hearing yesterday, commissioners requested an analysis of the impact of the recommendation for taxpayers, and it came out precisely as Ross stated – “The 10 million taxpayers making less than $50,000 would pay $100 million more in taxes while the 7 million taxpayers who make more than $50,000 would get $6.8 billion in tax cuts.”

This will not be a consensus document, most of the liberals on the panel won’t sign it.  And even the news reports today acknowledge that the changes would “largely benefit the wealthy.”  Clearly the Governor will put his weight behind it, but that’s meant nothing in Sacramento for several years.  The question is whether the Democratic Legislature would dare to massively reward the rich so nakedly by accepting these recommendations.  Because the business community is actually against it, worried about the effect of the net receipts tax, I’d still guess no, but people should be letting their Representatives know that they will not get away with a transparent shift in wealth from the middle class to the super-rich.

The establishment in Sacramento has manned the barricades, battened down the hatches and gone on the offensive to prove their own worth.  They sent their best man in the media, George Skelton, out to prove that no, despite your lying eyes, the California Legislature had a real banner year.  After all, they managed to bring suffering to the lives of hundreds of thousands of state residents with consensus and bipartisan elan!

The current Legislature, regardless of Duvall and despite ideological polarization, has had a better year than it’s getting credit for.

Its main accomplishment was keeping the state afloat amid a flood of red ink, created primarily by the toughest economic times since the Great Depression. OK, so it did use some bailing wire and chewing gum! The bills got paid, even if briefly with IOUs.

With great difficulty and pain — at least for Democrats — the Legislature and Gov. Arnold Schwarzenegger slashed programs by roughly $30 billion. They also struck a major blow against “auto-pilot” spending by permanently eliminating all automatic annual cost-of-living adjustments, except for K-12 schools. And they summoned enough courage to temporarily increase taxes by $12.5 billion.

In the end, they found a way to restore health insurance for 660,000 low-income kids.

The tax increases hit the more vulnerable elements of society disproportionately, of course.  They actually found that way to restore children’s health insurance by lowering industry taxes and increasing the co-pay and deductible burden on the low-income families themselves, while reducing the covered care.  And anyone who adds cutting $30 billion in programs and eliminating COLA as an accomplishment is a bit of a social deviant.  But there are probably no lengths to which Skelton will go to defend the palace walls from the rabble who think, based on the evidence, that the system is horribly broken.

Steve Maviglio wisely steers clear of the more horrific achievements of this year’s Legislature, and offers a slightly more defensible outlook of the ’09 Legislative session.  Still, there’s a lot unsaid:

Looking back, getting the measures on the May ballot was a significant early success that required 2/3 votes. And toward the end of the session, in addition to the renewable energy bill, Speaker Bass pushed through measures on childrens health and domestic violence that won broad bipartisan support. (The Speaker also got a standing ovation, and she appears to have strengthened her support in Caucus. Compare that to the ouster of the two Republican leaders).

Okay, so the grand water deal didn’t get done. Big deal. Nothing like that has been done for a generation. Perhaps Senate President pro Tem Steinberg set the bar too high when he said he’d get it done. In any case, all parties agree that they got close and can pick up the pieces and get it finished in short order.

So for all those crying for major reforms, put it all into perspective. Sure, improvements could be made, and things could have been better, but this is not reason for drastic action. Far from it.

Of course, the renewable bill is veto bait, as are many of the other major bills pending the Governor’s signature.  And the domestic violence bill didn’t pass the Senate, so, um, that doesn’t count.  The prison bill offered decent parole reforms but stopped well short of a real solution.  Everyone keeps saying the water bill will happen but the two sides remain far apart, and the fact that they’ll have to go into overtime to reconcile it kind of proves the point, no?

But Maviglio tips his hand with the line “this is not reason for drastic action.”  Of course he would say that.  He’s profited well from the status quo.  Anything that messes with it could hurt him professionally, and what’s more, could stop the endless blaming of outside factors to account for stunning failure.

There is no shame in stating that this was a failed legislative session.  Just about everyone in California would agree with you, particularly the ones who are suffering the most from the destruction of social insurance caused by the most heartless cuts.  Simply put, the Great Recession dominated legislative activity, and the conservative veto from various 2/3 requirements restricts the Legislature from fulfilling the expressed will of the people through their votes (NOTE: This does not only come into play with the budget; late last Friday Republicans blocked over 20 bills that required 2/3 votes for one reason or another, probably because they knew they could get away with it).  That’s not something to explain away, it’s actually something to fight, every single day until the problem is rectified.

Skelton and Maviglio may want to tell themselves all is well, but the public knows better, and they’re going to demand major structural change.  Those who think that the Legislature can still be a force for good in the state can get aboard and provide the best ideas to break the supermajority gridlock and get the state moving again.  Or they can defend their narrow interests.  Their defense will fail, and it would be a shame not to see them on the right side of history.

As Jim Evans, Communications Director for Sen. Steinberg, notes, the Governor is poised to veto a bill he championed, which would mandate the highest renewable energy standard in the nation, requiring utilities to get 33% of their energy from renewable sources by 2020.  But it’s far worse than just a veto.  Schwarzenegger wants to then set the standard himself by executive order.  You can see why this would please him – he would be able to say that he boldly moved the state forward in the renewable energy space, while vetoing the bill from the Legislature that would do the same thing.  And he wold significantly weaken the standard in a variety of ways.

The order presumably would set no limit on how much of the green power could be imported from other states.

Environmentalists who have been told about the governor’s still-evolving plans said Schwarzenegger also was considering directing the California Air Resources Board to look at broadening the state’s definition of renewable energy sources to include large hydroelectric dams and nuclear energy plants.

Critics questioned whether Schwarzenegger’s order would be binding once he leaves office at the end of 2010. The validity of the order would be subject to a variety of potential legal challenges, they predicted.

So Schwarzenegger would allow utilities to outsource all the green jobs that would be created if power needed to be created on California soil, ruining the one area of potential economic recovery in the bill.  He would put the standard on shaky legal ground, open to litigation and an unclear mandate.  And he would hand a gift to the nuclear power industry by twisting arms at the Air Resources Board to change their definition of renewable energy.

This isn’t just short-sighted, it’s downright criminal.  A high renewable standard could spurn all kinds of economic activity, but without a limit on importation, that activity will just go elsewhere instead of California.  This is an effort of questionable legality for Schwarzenegger to reward corporate cronies with lower purchasing prices for green energy at the expense of California jobs.

Astounding.

SB14, which would set a first-in-the-nation standard that utilities must receive 33% of their energy from renewable sources by 2020, passed the Legislature late last night.

“Increased development of renewable energy in California has tremendous potential as an economic development tool. These are clean, green jobs that belong in California. SB 14 sets a clear target with a real deadline, and then makes it as easy as possible to bring renewable energy on line.

In light of the state’s ambitious new carbon emission targets, SB 14 will give energy agencies the flexibility they need in order to meet those goals. Current law “caps” the amount of renewable energy that the Public Utilities Commission may order utilities to buy or build at 20 percent. This bill would remove this cap and require utilities to acquire 33 percent of their electricity from renewable resources by 2020.”

This would make California’s renewable energy standard one of the most aggressive in the world.  The Governor, feted in magazines and national media as an environmental leader, has vocally backed the 33% standard in the past.  But power plant generators have pressured Schwarzenegger to veto the bill.  And according to the LA Times, he will.

The Senate did manage to pass the energy bill, which would raise to 33% the amount of energy the utilities must get from renewable sources. Final approval by the Assembly of some minor amendments was expected.

However, a high-ranking administration official said late Friday that the governor may not sign the bill, SB 14 by Sen. Joe Simitian (D-Palo Alto), because of provisions limiting the amount of energy that could come from outside California. The official spoke on condition of anonymity because the bills were not yet on the governor’s desk.

That would really be the icing on the cake to the worst Governorship in California history.  The one issue on which he staked his legacy, and he is likely to veto the bill most likely to drive the lowering of greenhouse gas emissions, mainly because it would keep too many jobs in the state.  Adding a renewable energy standard and mandating a majority of that energy be generated in state, is probably the only bill passed this year that looks to expand the local economy.  And because of that, Schwarzenegger will veto it.

And the same magazines will put him on the cover with the slogan “The Greenenator” and talk up his environmental credentials.

Notes from yet another long session in the Legislature:

The Senate could wait no longer for the Assembly to get their act together, so they passed a reduced prison package along the Assembly’s lines, one that falls $200 million short of projections and does not have a sentencing commission.  The Governor has announced he’ll sign the bill.  It’s marginally worthwhile for the parole reforms, but really nowhere near what’s needed.  And so the federal judges will in all likelihood order a mass release, and because little is being done to address root causes, the cost of prisons and the population as a whole are both still likely to increase.  The cowards in the Assembly who think they have designs on higher office after this travesty should know that this vote will have importance, but not in the way they think.

The bill to waive CEQA requirements (California Environmental Quality Act) to put a football stadium in Southern California – without an NFL team, mind you – did not get by Darrell Steinberg, despite lots of energy and effort from special interests.  He’s giving the various parties more time to negotiate a settlement.  Sports stadiums are among the biggest corporate welfare projects we have in America.

The much-ballyhooed water deal has been scuttled, as Karen Bass announced she did not have the votes to move it.  The Speaker may ask for a special session on water, and the Governor would probably move that as well.  The middle-of-the-night rush obviously didn’t work, so some transparency would be preferable.

Still waiting on the renewable energy standard bill, which would put California in the vanguard of the nation in terms of its portfolio (33% by 2020).

A few end-of-the-session tidbits for you:

• CapAlert reports that Karen Bass will try again to get some of the more spineless members of her caucus to support a prison reform bill better than the scaled-back effort it already passed.  Bass talked about adding the “alternative custody” provisions into the bill, which would get it to the proper level of cuts, but not the sentencing commission, which still looks dead, sadly.

• One bill we know to be dead is SB88, which would have forced localities to get permission from the state before going into bankruptcy.  This was a union-backed bill to protect their local contracts, but city governments balked.  Sen. Mark DeSaulnier says he’ll try to broker a compromise for next year.  Those bankruptcies are probably right down the pike, so he’d better hurry.

• The bill that the Governor arrogantly vetoed earlier in the week, in a hissy fit because he wasn’t getting his way on water or prisons, was a bill to initiate a Vietnam Veteran’s memorial day.  It was authored by Republican Assemblyman Paul Cook, and he’s whipping support to undergo the first legislative veto override in Sacramento in about 30 years, which is truly a sad legacy.  Only in California could securing an override on an uncontroversial bill be something that could end a political career, as Cook acknowledged today.  An override would be at least a sign of life in the Legislature.

UPDATE: And that’s going to fizzle, because the Yacht Party in the Senate won’t go along with an override.  What point is there having the law on the books?  Paul Cook is going to us a gut-and-amend to put the same bill up tonight, anyway.

• A lot of rumbling about the water bill, which is being written completely in secrecy, and without the input of politicians who represent the Sacramento Delta.  Bass hinted at a bond issue to finance whatever comes out of conference, which would cost $600 $800 million in debt service annually without any consequent gains in revenue to pay for it.

UPDATE: The Fresno Bee has more.  The bond issue seems to be the sticking point.

Could be another long night…

UPDATE: Here’s some actual good news.  SB13, the bill to fund $16.3 million for domestic violence shelters by shifting some budget accounts, passed the Assembly on a bipartisan vote of 63-1.  I wrote yesterday about how the loss of this funding was simply devastating and indeed, a death warrant, to domestic violence victims across the state.  It moves to the Senate for concurrence.

I mentioned this yesterday, but California lawmakers gave final approval to a bill that would ban the practice of rescission, where insurance companies drop coverage for policyholders after they try to use it based on alleged technical inaccuracies in their application form.  Here’s what AB2 would do:

AB 2 would require:

• Individual health care service plans to be subject to an independent external review before denying or rescinding coverage.

• The state to establish standard information and health-history questions to be used on policy applications.

• That intentional misrepresentation be shown before an individual health care service plan can be rescinded.

This language basically complies with what would appear in federal legislation before Congress banning rescission.

Now Arnold Schwarzenegger has a choice to make.  Does he side with people who are denied coverage after paying premiums for years?  Or does he side with his usual pals in the Chamber of Commerce who will push for anything, no matter how immoral, to maximize profits?

Everyone should know that Schwarzenegger vetoed a similar bill to this last year.  He’s always been a Chamber of Commerce sock-puppet and I don’t expect him to change now.  However, Schwarzenegger has been an alleged proponent of health care reform at the national level, and in a recent letter endorsed the concept of guaranteed issue of insurance, which obviously conflicts with allowing insurers to rescind policies.  He also supports continued state regulation of the insurance industry.

Well, here’s his chance.  The Legislature has acted to ban what I call insurer-assisted suicide, and Arnold can make his decision by either signing the bill or vetoing it.

True to the reality of a weak political media and an inattentive public, the chatter over the results of the July budget revision, despite major cuts to the social safety net, has completely subsided.  No taxes got increased and nobody “important” got hurt, so it was just time to move on.  Politicians just move on to the business of raising corporate money, special interests can move on to the business of writing laws that help their bottom line, and everybody in Sacramento can praise everybody else for “sacrificing” to get things done.  

Only, for the people living under the consequences of these budgets, created through a choice not to properly pay for needed services, the budget battle is not forgotten.  And it doesn’t consist of a group of numbers in a column.  It’s entirely real and it hits them every single day.  Here’s just one example.

Six domestic violence shelters in California have been forced to close while dozens more are scaling back services after Gov. Arnold Schwarzenegger eliminated all state funding for the program that supports them.

Shelters in the Central Valley town of Madera, the Sierra foothill town of Grass Valley and in Ventura County in Southern California have closed. Others in the San Francisco Bay area, Los Angeles and Bakersfield are on the verge of closing.

Many centers are laying off staff and closing satellite offices that serve remote areas of the state as they cope with the budget cuts. A national domestic violence group describes California’s as the deepest cuts to such programs nationwide, even as other states have reduced funding.

In Madera County, officials have turned away six domestic violence victims and eight children since the county’s only shelter closed Aug. 7, said Tina Figueroa, the shelter’s director. The Martha Diaz Shelter served about 100 victims a year, many of them low-income and with no place else to turn, she said.

So 100 victims of domestic violence in smallish Madera County now have truly nowhere to turn, and will either suffer under the boot of their abusive partners or, in many cases, be killed by them.  The director of domestic violence policy in the LA City Attorney’s office pretty clearly calls these programs “homicide prevention.”  It also saves money relative to what you spend prosecuting the eventual homicides.  I’ve seen “tough on crime” conservatives over the years invoke the name of victims and stir up public support for laws in their name.  They go curiously silent when hundreds of domestic violence victims are put at risk of death because they want to save rich people and corporations from having to pay for their fair share of the commons.

These closures are the direct result of line-item cuts by the Governor.  So the blood is on his hands.  Leland Yee has a bill that attempts to cover the domestic violence shelter budget with cash from a crime victims fund, but under 2/3 rules, it’s not likely to pass this week.

Kudos to the AP for doing a story on this; but there need to be many more.  There’s a human face on the budget cuts that has completely been lost and forgotten.  Those suffering are right to suspect that nobody in Sacramento cares about them.

There’s lots of significant news in the Legislature’s last week regarding various bills, and it’s extremely difficult to keep up with it all, probably by design.  I should point out that, while the legislative calendar has an end date, there’s no actual reason for some of the forced bottlenecks that result in hundreds of bills being passed at the last minute.  It creates a shroud of secrecy in which special interests rule, and saps the public trust.  A Democratic leadership actually interested in positioning government as somewhat decent would remove these forced bottlenecks from the internal legislative rules and allow bills to be approved on a rolling basis.  That said, this is the system we have now, and here’s a bunch of news about various bills:

• A new bill would exempt non-General Fund workers from furloughs.  This would reverse one of the dumbest provisions in the budget bill, the practice of forcing furloughs on workers not paid by state government, saving almost no money and depriving people of needed services.  Of course, the Governor will probably veto this one, because he hates admitting how wrong he is.

• Democrats on that vaunted water committee have decided against floating a bond to pay for any restoration or overhaul of the Delta.  This means Republicans won’t vote for it, and very little will come of this very important committee thrown together at the last minute.  Some conference committee reports are here, but a deal looks remote, as it would need votes from some of the empty chairs in the Yacht Party.

• One bill that has cleared both chambers would set up “Education Finance Districts”, “in which three or more contiguous school districts can band together to try to increase local taxes.”  This is a small step to make it easier for districts to pass parcel taxes to fund schools, but at this point every little bit helps.  The 2/3 rule for approving such taxes would remain.

• With all the talk of health care reform, it’s notable that an anti-rescission bill has once again passed the legislature.  The bill would also simplify insurance forms.  Last session, Arnold Schwarzenegger vetoed it.  There’s something you don’t hear much about from the Democratic leadership – Arnold Schwarzenegger vetoed a bill that would have banned insurance companies from dropping patients after they get sick.  He sided with the forces of insurer-assisted suicide.  This is your modern Yacht Party on this issue:

“Any of those who have read the various exposés in the Los Angeles Times and others . . . is aware that health insurers have admitted and acknowledged they engaged in a form of post-claims underwriting,” said Sen. Mark Wyland (R-Escondido). “It is unethical and, considering what some of these people have endured, it really borders on the immoral.”

However, Wyland said he would not vote for the bill because the Department of Insurance has proposed new rules to solve the problem, and he wants to see how they work.

Hey, give ’em a chance to see if the immorality stops!  If not, we can think it over.

• The Legislature may extend a homebuyer’s tax credit passed in a previous budget agreement that was nothing but a bailout for developers.  It only credited new construction, and was structured only to benefit high-income households who could afford new construction.  By the way, sales of new units have fell since this was enacted, so it’s not even meeting its intended purpose.  But it’s a giveaway to a special interest, so off the money may go, even though we cannot afford it at this time.

• A bill to ban bisphenol A (BPA) from children’s products was delayed after the Assembly couldn’t muster 41 votes.  The debate in the Assembly last night was pretty fierce.

• Cities and counties reacted angrily to a proposed bill to slow local government bankruptcies until vetted by the California Debt and Investment Advisory Commission.  On the merits this looks to be a bill that would install more control on locals from Sacramento, although there are arguments on both sides.  But mainly it’s about the fate of union contracts in local bankruptcies, I don’t think either side would deny that.

• A roundup of other bills passed yesterday can be found here.