Cross-posted on the California Majority Report.

Yesterday, the California Assembly and Senate held a rare joint legislative session to hear from California’s economic experts on the state of California’s economy. Treasurer Bill Lockyer, Controller John Chiang, Department of Finance Director Mike Genest, and Legislative Analyst Mac Taylor gave a remarkably uniform presentation that urged immediate action and politically tough compromise.

“If you act now, the cash situation is manageable, unless it gets worse, and I’ve already said it will,” Genest explained with a slight slip of the tongue that was perhaps even more accurate than intended.

“The faster you act the easier it will be for you to fix your problem,” Taylor added.

Over the next two years, current estimates project that California faces a $28 billion budget hole, and all sides are willing to acknowledge that’s likely an underestimate. Moreover, the Legislative Analyst’s Office anticipates huge operating deficits above $20 billion per year through 2014. Lobbying in Washington, D.C. will hopefully reduce our federal tax dollar imbalance, but the complete solution requires bold action in Sacramento as well.

There’s more over the flip…

Failure to act soon, Treasurer Lockyer warned, would force the state to stop construction on a number of infrastructure projects, to the tune of $660 million per month. The harm to the private businesses and employees expecting highway projects would clearly create a domino effect disruptive to the state’s economy. Projects at risk cross Republican and Democratic districts, including a $239 million bridge replacement on Interstate 5 in Shasta County, a $345 million tunnel project on Highway 24 in Alameda County, a $218 million HOV lane on I-5 in LA County, and a $65 million eastbound lane project on Highway 91 in Orange County.

The loss of jobs and tax revenues that would result would be accompanied by an increased reliance on social services, and this is obviously a problem far beyond highway budgeting.

Without a real budget, the LAO thinks it will be impossible to convince lenders to provide the state with stimulus and infrastructure bonds, which remain one of the more attractive options left to the legislature.

And Genest gave another reason to act fast. As time wears on, the options available to the state diminish with one glaring exception: Proposition 98 education funding. The legislature has the authority to cut off Prop 98 guarantees at any time, whereas most cuts and revenue solutions rely on early action to reap substantive reward this year.

“Delayed action points the gun very directly at schools,” Genest emphasized.

Controller Chiang echoed Genest’s concerns. While strong opinions exist on both sides of the aisle on cuts and tax increases, to do nothing is worse than making hard sacrifices.

But the bluntest presentation came from Treasurer Bill Lockyer, who minced metaphors but not words. Calling the budget that cleared the legislature in September a “zombie budget … but no sleeping beauty,” Lockyer urged the legislators present to transcend the interests they represent and the ideologies they espouse. “Robotic advocacy misses the unique role of legislators,” he told them. “Stop relying on the tooth fairy and other fantasies.”

What’s needed in Sacramento more than a tooth fairy is a two-thirds fairy. To raise taxes, close tax loopholes, and pass budgets requires two-thirds approval, in essence giving Republicans in both legislative houses veto power over most solutions provided they remain unified. Legislative Democrats have acknowledged that additional cuts will be required, though legislative leadership is understandably getting push back from some of the legislature’s more progressive members. Nevertheless, Democrats have shown in the past that they can largely fall in line with leaderships’ recommendations on budgetary matters. The elephant in the room, as has been the case for a number of years, is whether enough Republicans will agree to revenue solutions that they know will be opposed by conservative activists.

At least publicly, legislative Republicans have yet to back away from their no tax pledge, and if they didn’t get the message after this presentation, then we are in for a world of hurt.  

“The good news is, on the Assembly side, we only need three votes,” said Speaker Bass at a press conference preceding the session. And indeed, there may be cracks in the Republican armor.

While Senate Minority Leader Dave Cogdill other Republicans bloviated forever with rhetorical questions and right wing red meat designed for the cameras, at least two Republicans seemed genuinely open to learning from the exercise. Assemblymember Danny Gilmore, who represents the only district in the state where a Republican picked up a Democratic seat, noted his district’s high levels of unemployment and asked the presenters how important job creation was to solving California’s economic crisis. Assemblymember Kevin Jeffries asked the experts which tax increases will harm California’s economy and which will help, suggesting he at least recognizes that some taxes might be helpful.

Perhaps I’m reading the tea leaves too much here, but until proven otherwise, I will hold out hope that Gilmore and Jeffries are willing to take a more pragmatic approach to solving our economic crisis than most of their colleagues. As the state’s economic experts explained, to rely solely on cuts or solely on tax increases would increase unemployment in the state, whereas infrastructure bonds and stimulus offer opportunities to create jobs.

And as if on cue, the Commission for Economic Development, chaired by Lt. Governor John Garamendi, held their quarterly meeting at the Capitol this morning focused on the needs of California’s aerospace, agriculture, biotechnology, goods movement, and tourism and entertainment sectors. Not surprisingly, education, career training, and increased collaboration between businesses and schools were among the top priorities for all involved. As the California Taxpayers Association understood when they endorsed a modest sales tax increase a few months back, California needs an educated workforce to remain competitive in our cash cow high-tech, entertainment, and finance industries.

“The California Commission for Economic Development is intensely concerned about the California economy and understands that the ultimate solution to the budget crisis depends on a very healthy and growing economy,” Lt. Governor Garamendi explained. “To accomplish that, today we heard recommendations from six different industries on how they can advance the interests of their industry. The Commission will transmit all of those recommendations to the legislature and the Governor for immediate consideration.”

Added Democratic Assemblymember Lori Saldana, who sits on the Commission: “Here we have reports on the needs of a skilled workforce, and yet where are we talking about cutting? Education and infrastructure. We clearly need the people who were in this room to communicate more forcefully in this discussion.”

The partisan budget games, played primarily by legislative Republicans, need to stop. Legislative Democrats are willing to swallow politically risky cuts harming key constituencies to see our financial footing strengthened. Democrats will receive severe flack for their efforts, on this blog and elsewhere, as the weeks and months progress. To borrow Treasurer Lockyer’s terminology, at least one party in Sacramento is willing to transcend “robotic advocacy.”

Meanwhile, a Republican legislator at the hearing spoke fondly of a Toyota plant recently built in Mississippi to argue that California’s tax climate is unfriendly to businesses. We can quibble with specific tax rates or specific tax incentives, but one thing we should all agree on is this: California is not Mississippi, and we don’t want it to be. To allow a budget that relies excessively on cuts to our education and social services infrastructure would fundamentally alter the character of California and destroy the institutions that have made California a hub for high-end jobs over the years.  

The ball is now in the legislative Republicans’ court. They can do their part to sink our economy, or they can stand up to the Grover Norquists of the world and agree to a compromise. Democrats are willing to buck pressure from the key interest groups that form the Democratic donor base. Can Republicans say the same?  

Cross-posted on the California Majority Report and the Daily Kos.

Under the collective denial mentality that has hijacked media-types and political observers since the February 5th contests, Senator Barack Obama’s decisive 56-42 win in North Carolina juxtaposed with Senator Hillary Clinton’s narrow 51-49 win in Indiana shows Senator Obama has successfully rebounded from the Rev. Wright controversy and whatever other manufactured non-policy outrages that he’s been forced to address. After all, Obama increased his popular vote lead by over 200,000 votes, and more importantly, his 95 new pledged delegates put him 12 delegates further ahead of Clinton. To borrow a catchphrase from former Democratic Senator Joe Lieberman, Obama’s got O-mentum. However, while O-mentum plays a role at the margins, a few points here or there, the reality is this contest is already over, and these outcomes were largely predetermined.

The Democratic presidential primary is over. Senator Barack Obama is our nominee. It didn’t end last night, although many of the pundits that dragged us along for this performance will try and tell us differently. This race has been over for weeks. Obama successfully cemented an impossible to overcome coalition at some point along his 11-state sweep. By the time of the Ohio primary, it was clear that no amount of delegates in Clinton’s remaining geographical strongholds would come close to overcoming Obama’s delegate lead. Today, you will see the superdelegates continue to publicly and privately align with Obama. Any scenario for victory left in the Clinton playbook would have to, by definition, shred party unity through divisive procedural maneuvers that would alienate voters we’ll need in elections for decades to come. I’m not the least bit concerned, because the party elders see the same polls, the same election returns, and the same voter registration numbers I see, and they aren’t going to permit civil war, not this election year.  

The voters in the remaining states and Puerto Rico, even if they could somehow change the outcome of this race (and they can’t), probably have already made up their minds. Exit polls in Indiana showed that 75 percent of primary voters made up their minds sometime before the week of the primary. That number was 79 percent in North Carolina and 76 percent in Pennsylvania. Enough voters feel sufficiently informed in their voting decisions that there just aren’t many late deciders left in this fight. After 21 debates, thousands of campaign stops, and endless 24-hour coverage, apparently enough voters are confident in their decisions that they don’t need to see the gas tax holiday gimmick mocked endlessly on television, and maybe, just maybe, they don’t need to be convinced that senators Obama and Clinton really do at the bottoms of their hearts love cans of really awful beer.

I will say this: Senator Clinton’s “victory” speech last night was gracious and largely respectful to our nominee. If that is how she conducts herself for the duration of this campaign, she’s more than welcome to stay in the race through June 3rd. The state-to-territory-to-state campaigning has done wonders for Democratic registration everywhere. This will pay dividends for presidential candidate Obama and all the Democrats facing competitive down ballot races. In California, the enthusiasm generated by this presidential race will bring new loyal Democrats into an election that could enable us to achieve a two-thirds majority in the state legislature so we can sanely craft budgets, throw us up to three more Congressional seats, and decide the fate of marriage equality and the more humane treatment of millions of farm animals. These are big deals for our state, and senators Obama and Clinton deserve credit for helping plant the seeds that make these efforts possible.

A positive Democratic primary, largely free of negativity between the candidates, would be good for our party in the remaining states. If Clinton retains the tone from last night’s speech, I say stick around, Senator, and thank you. But forgive me if I use my crystal ball for a moment. It doesn’t matter how much “momentum” Obama generates from his impressive 14-point win in North Carolina; he will lose West Virginia. And it doesn’t matter how much “momentum” Clinton will generate from her impressive win in West Virginia; she will lose Oregon. While Obama basks in the glow of victory in Oregon, Clinton will stake camp in victorious Kentucky, priming Puerto Ricans into thinking they can still swing this race for her. They can’t. She’s not our nominee. But so long as Clinton plays nice and wants to keep this theatre production acceptable for all audiences, with dulled blades, she’s welcome to continue playing the part of a viable presidential candidate. When done right, this road show is good for the party.

Cross-posted on the California Majority Report.

It was overcast and dreary in Oakland today, and the dark clouds spread to Lake Merritt United Methodist Church during a budget crisis forum sponsored by Assemblymembers Loni Hancock (D-Berkeley) and Sandré Swanson (D-Oakland).

“I believe the drastic cuts proposed by the Governor would be devastating to the people I represent,” Hancock told the 100-person crowd. “The budget will define our values as a community.”

The budget as a statement of values was a theme repeated throughout the program. “We can have this conversation about numbers,” Swanson added. “But that kind of misses the point. This is really about values.”

Jean Ross, Executive Director of the California Budget Project, laid out what values are being put to the test in Governor Arnold Schwarzenegger’s budget:

• Confronting education — a $4.825 billion cut to K-12 schooling. That’s a reduction of $786 per student;
• Confronting health care — a $1.126 billion cut to Medi-Cal spending;
• Confronting crucial social services for children and families — a $463 million cut to CalWORKs programs. The largest share of these savings would come from removing aid for 150,000 children in low-income households; and
• Confronting crucial social services for the elderly and disabled — a $324 million cut to cost-of-living adjustments for cash assistance programs for low-income seniors and persons with disabilities in the SSI/SSP program.

To make matters worse, some of these cuts would take away federal matching funds. “What sense does that make?” Assemblymember Swanson pondered.

For more, including a discussion of the early release of prisoners, see over the flip…

As Assemblymember Hancock noted, California is the only state in the nation to both require a two-thirds vote in the legislature to raise taxes and grant the Governor line item veto authority. “This reminds me of the seven layers of Hercules,” Hancock said. “You have impossible barriers you need to cross before you get to the place you need to be, but if we don’t do that this year in California, we will find that this place is no longer the place it has been or we want it to be.”

Previous Schwarzenegger budgets in comparatively good economic times have relied on a combination of bonds, gimmicks, and already steep cuts. With a $14 billion budget shortfall this year, that will no longer be sufficient. Lenny Goldberg, Executive Director of the California Tax Reform Association, laid much of the blame on Governor Schwarzenegger’s revocation of the vehicle license fee and the Governor’s subsequent bonds to make up for lost revenue. Combined, these add up to $9 billion, nearly two-thirds of the budget deficit.

During previous deep red budget years, Republican governors Ronald Reagan and Pete Wilson combined a mixture of tax and fee increases and spending cuts to balance the budget. But this year, legislative Republicans and even our so-called post-partisan Governor have vowed to oppose all new fees and taxes. “The rational conversation on the tax side has been completely cut out,” Goldberg lamented.

On the issue of convincing Republican legislators to act more rationally in regards to tax and fee matters, Hancock and Swanson played good cop, bad cop.

Hancock emphasized that there are some genuinely rational legislative Republicans, even if their voting records suggest otherwise. She told the crowd that she has had Republican legislators approach her and say, “I know a really good tax loophole that you should cut. Of course, I can’t actually vote for it.”

Swanson was a bit less concilitary on the subject. “I can be just as irrational,” Swanson quipped. “I will not make cuts to Prop 98. I will not make cuts to after-school programs.” If Republicans insist on holding firm on revenues, Swanson made clear, then it’s up to Democrats to do the same on the services we care most about so we can finally have a “fair and rational” debate and make a genuine compromise.

Karen Hemphill, a Berkeley Unified School District Board Member, gave the best summary of why Democrats care so much about preserving education funding. The Governor’s proposal would take away revenue equivalent to a month in school for every school district in the state. That’s $768 less per child. At stake aren’t just pencils, textbooks or dodge balls. Education is the most important investment a state makes, she emphasized. Lower performing schools lead to lower performing students. Lower performing students will make less money on average, increasing their reliance on state services and decreasing their contribution to the tax pool. Lower performing students are also at a greater risk for falling into a life of crime, which of course ups the costs associated with courts and incarceration. “I don’t think many of us thought this was what was meant by the Year of Education,” Ross joked.

Hemphill also informed the audience that the district expects to lay off most of its counselors if the Governor’s budget moves forward. But she warned that Berkeley Unified School District is actually in better shape than most schools in the state, because Berkeley voters recently approved a parcel tax to help fund school programs.

The discussion on education costs frequently returned to the question of local government solvency. Assemblymember Swanson noted that much of the Governor’s budget simply shifts responsibility to the local level as an unfunded mandate. “It doesn’t go away; it just passes responsibility,” he said.

Alameda County Supervisor Keith Carson gave a sobering breakdown of statewide city and county concerns. 50% of Oakland’s revenue comes from federal and state money, but this includes property tax revenue collected by the city and transferred to the state. And local governments’ access to local property tax revenue has been on the decline. Less than 25% of the county’s budget is discretionary.

Naturally, as on the state level, the services provided with discretionary funds disproportionately harm those most in need of help. If the Governor has his way, the services that will be cut include things like preventative health care, educational opportunities programs, job training, rehabilitation programs, prison deferral services, and the like. While the state may see a short-term savings by destroying these programs, Carson made a crucial point that is frequently lost in the blustering anti-tax rhetoric that frequently permeates in Sacramento and among the chattering class. Simply put, in the long term, these programs improve society and save the state money. Preventative health care stops illnesses before they become a huge financial burden. Programs to broaden educational opportunities and to provide job training help the children of poor Californians become part of the well-educated, higher tax-paying, more flexible middle-class. Drug and alcohol rehabilitation and prison deferment programs reduce imprisonment costs, help reform broken lives, and ultimately generate more tax revenue for the state. Schwarzenegger “clearly didn’t have an understanding of how his budget proposal would impact local communities,” Carson explained.

The Governor’s budget also includes a $372 million cut to the Department of Corrections, mostly through the early release of 20,000 inmates and a quickening of the parole process for another 20,000. While this proposal has received bipartisan condemnation, many progressives will be inclined to support this part of the Governor’s budget, because there are far too many non-violent offenders in prison who simply don’t belong there, and because our country’s incarceration system all too frequently creates hardened criminals where there once was a good chance at rehabilitation. But the panelists cautioned that early release alone is insufficient.

As Ross explained, “I know many of you probably think that’s a good idea, but the problem is those individuals would not have supportive services in the community to help them find housing, help them find jobs, and help them restart their lives in a positive way.”

“It is irresponsible to [release prisoners early] without some funds to help the counties manage,” Swanson cautioned.

“Many of those individuals we would like to have in our community,” added Carson. “But they don’t have the supportive services necessary to assist them.”  

But there is reason for cautious optimism on this issue. Hancock thinks we have a real chance to turn the budget lemon into public safety reform lemonade by including rehabilitation block grants for local governments in conjunction with early release. This would still save the state money and provides a realistic opportunity to permanently reduce the population in our state’s overburdened prisons.

Clearly, Governor Schwarzenegger wasn’t the room’s favorite person, but there was some praise for the Governor, sort of. While previous budgets have relied on “smoke and mirrors,” Ross gave the Governor credit for presenting a more or less honest portrayal of what the budget would look like without additional revenue. “This budget makes clear that California is facing a very serious challenge,” she said.

And there was some good news to report too. Assembly Bill 32, California’s landmark global warming bill co-authored by Speaker Fabian Nunez (D-Los Angeles) and then-Assemblymember Fran Pavley (D-Agoura Hills), is not particularly threatened by the Governor’s budget, because the California Air Resources Board has limited authority to raise fees without legislative approval. Indeed, the state’s budget wonks are looking into redirecting money from the general fund that Governor Schwarzenegger reserved for AB 32, since that money could also be generated via a CARB fee hike.

So where do we go from here? How do we insure that our values are reflected in California’s budget this year? Goldberg had some suggestions:

• Tax oil producers. This would generate more than $1 billion yearly, and we are the only oil-producing state that doesn’t tax the oil producers;
• Bring back the vehicle license fee;
• Restore the top tax bracket that Governor Wilson abolished. This would generate $2 billion yearly, and those who faced the tax hike could even get a portion back in their federal tax returns;
• Institute a tax on goods purchased on the Internet;
• Find fees that can help relieve the general fund. Fees only require a majority vote, so they provide an opening for the Governor and legislative Democrats to increase state revenue without the support of legislative Republican obstructionists. He cited a carbon fee as one option;
• Organize parents, teachers, and concerned citizens in Republican districts to fight against cuts to education. Schools in Republican districts tend to be even more vulnerable to state cuts to education, and it’s possible the pressure could sway some legislative Republicans to take a more nuanced perspective on taxes;
• Get taxes on the ballot. While a legislature-approved tax initiative would also require a two-thirds vote, it is possible that enough Republicans could be persuaded to let the people decide their own financial fate; and
• Support groups that wish to independently carry revenue-generating initiatives. Even if a tax hike initiative can’t clear the legislature, we should expect signature gathering to begin from concerned interest groups.

So those are some of our options. Where are we likely heading? Said Goldberg, “My guess is one way or another, we’re going to be fighting this out on the ballot.”  

Cross-posted California Majority Report.

In 2005, Genarlow Wilson was sentenced to ten years in prison by a Georgia jury for having consensual oral sex with a 15-year-old girl. Wilson was only 17 when this “crime” was committed. Last week, the Georgia Supreme Court overturned the case, deciding in a 4-3 decision that the conviction “constitutes cruel and unusual punishment.”

It would be easy for those of us in blue state California to look at this case from afar and see yet another miscarariage of Southern justice, but that would be a mistake. There is a lesson here for California, and it’s a lesson we’ll almost certainly ignore.

Before his conviction, Wilson was repeatedly offered plea deals that might have allowed him to avoid prison, but he refused because a plea would have forced him to register as a sex offender. “It might’ve been lesser time, but then again, I would have nowhere to go because I would have no home,” Wilson explained. “I wouldn’t be able to stay with my mother because I have a little sister. You know, when you’re a sex offender you can’t be around kids. Basically, I can’t even have kids myself, you know, so what is the point of life?”

Wilson, an Ivy League-recruited honor student who was homecoming king and one of his school’s best track and football athletes, lost two years of his life because of an inflexible sex offender registry that didn’t see many differences between sex crimes. Under Georgia law, Wilson was guilty of “aggravated child molestation.” No room for explanation. No room for context. Certainly no room for sympathy. So on the registry he goes.

To see why this matters to California, continue over the flip…

California isn’t all that different. To be registered as a sex offender in California is to be branded an undesirable for life. Our state’s Megan’s Law database includes many sex offenders of the Genarlow Wilson variety. People convicted of public urination, nude sunbathing, and mooning have had their names tarnished for life by being included in the same database as serial rapists and violent child molesters. And under last year’s unworkable Proposition 83, sex offenders were barred from living within 2,000 feet of a school or park. As the San Francisco Chronicle explained:

“Prop. 83 is a terrible initiative that does not stand up to close scrutiny. One of its most obvious flaws is the ban on sex offenders living within 2,000 feet of any school or park. What this will mean is that most urban areas in California will be placed off limits to sex offenders. They will instead be forced into living in rural areas — an unfair burden to those communities and a barrier for those ex-offenders who are making an effort to find employment and straighten out their lives. In addition, understaffed law enforcement and social service agencies in remote parts of the state might not have the resources to adequately monitor these individuals. Public safety may be endangered rather than enhanced.”

Under Prop 83, which passed by an overwhelming 70.5-29.5 margin, the sex offenders with a high likelihood of repeat offense are now barred from the cities most capable of dealing with them, while everyday folks who make the stupid decision to piss on a tree one day are forced to go along for the ride. Oh, and regardless of their offense, they’re all forced to wear ankle monitoring bracelets for life — on the public dime of course.

Why is the California electorate so afraid of drunken frat boys who moon their chancellor? Because voters in California all too frequently reflexively support anything labeled “tough on crime,” even if it actually puts us at greater risk. Because any crime bill cravenly claimed to be for the children is like a scalding iron that none of the state’s more sensible politicians want to touch. Because anyone who dares approach public safety with an air of rationality is branded “pro-criminal” by those who would rather posture than make us safer. And because some of our state’s most powerful lobbying groups directly benefit from keeping more people in prison and under close scrutiny.

And there’s no reason to think any of this will change. It will always be easier to score cheap political points through scare tactics and code words than to actually work on the thankless task of creating real solutions to our crime problems, and the victims of the system are too disparate, too disorganized, and frequently too poor to have a voice at all.

So while we celebrate Genarlow Wilson’s release, and as we scorn the flaws of his state’s justice system, let’s not forget that California — us, the voters — have created our own generation of Genarlows, deprived of the freedoms we take for granted because we would rather be “tough on crime” than smart on crime.