If you’ve been reading Calitics for any length of time, you know that one of the things we often point out is that California cannot go bankrupt. Our constitution mandates bondholders be repaid before any other expenditure aside from K-12 schools. And a federal law passed in 1937 to stop Arkansas from going bankrupt ensures that while city and county governments (like Vallejo and Orange County) can declare bankruptcy, states cannot.

But that could be about to change if House Republicans get their way, according to a recent Reuters article:

Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy. This may be the biggest political battle in Washington, my Capitol Hill sources tell me, of 2011….

Republicans in the House of Representatives already want to stop state and local governments from issuing tax-exempt bonds unless they are more forthright about these future obligations. Republican Representatives Devin Nunes and Darrell Issa of California and Paul Ryan of Wisconsin have introduced a bill that would require state and local governments to estimate the size of public pension liabilities if their assets earned a more conservative rate of return than many plans currently expect. Failure to do so would result in the suspension of their ability to issue tax-exempt bonds.

Reuters cites a Weekly Standard article that laid out the endgame – by changing the law to allow state bankruptcies, and then forcing states to go bankrupt by cutting their funding and undermining their ability to borrow, states would be able to reopen contracts with public employees. Not only could wages and benefits then be cut for current workers, but pension benefits for retired workers would also become fair game for cuts, as has happened with retired auto workers and others whose private sector pensions have been slashed after corporate bankruptcies.

It’s no surprise that California Republicans like Issa and Nunes are leading this fight – they know that public employee benefits are one of the last vestiges of a middle-class workforce in the state, and that those unions are one of the last lines of defense against the right.

California already has one big battle come up in early 2011 over the state budget. Looks like we’ll have another in 2011 with this federal effort to force us into bankruptcy. And with Barack Obama busy caving to the right whenever possible, we’ll have to win this fight on our own.

Well, here we go. The Redistricting Commission chose its final members from among the remaining applicant pool. The result is a commission that is sort of diverse and sort of represents the regions of the state, as the Sacramento Bee reports:

After selection of the final six, the panel consists of four Asian Americans, three Caucasians, three Hispanics or Latinos, two African Americans, one Pacific Islander and one American Indian.

Four are from Los Angeles County, with one apiece from San Francisco, Yolo, San Diego, Alameda, Santa Cruz, Orange, Santa Clara, Ventura, Riverside and San Joaquin counties.

The Central Valley has only two representatives on the commission, and one of them – Michelle DiGiulio-Matz – was the subject of a motion for removal yesterday, as part of an effort to include Paul McKaskle of Berkeley, who was the chief adviser to the California Supreme Court when the court drew the lines after the 1970 and 1990 censuses. DiGiulio-Matz was kept because the rest of the commission realized cutting the Valley out any further would be a real disaster.

As Dan Walters writes, that left Democrat Maria Blanco as the only commission member with redistricting experience. Having Blanco on the commission is a real victory for progressives – Blanco, who currently heads UC Berkeley law school’s Chief Justice Earl Warren Institute on Race, Ethnicity & Diversity, was once senior counsel at MALDEF and has extensive experience with redistricting issues.

Walters didn’t seem too happy with Blanco being on the commission, calling her “scarcely a neutral in California redistricting wars.” But what does that mean, exactly? Blanco’s emphasis would likely be on ensuring new districts are drawn to ensure fair representation for all Californians, especially communities of color. There’s no reason to believe she’d be a partisan hack; she does not strike me as someone who believes her job is to do the Democratic Party’s bidding. Her presence on the commission is one of the few good things about this otherwise absurd exercise.

And let’s have no doubt that it is absurd. Republicans have won the biggest victory of all, getting an equal representation that they simply do not deserve and have not earned. If the commission’s composition were reflective of the state’s registration numbers, Republicans would have fewer seats than Democrats.

It’s still far from clear that this commission was even necessary – while some districts will change their shape, the overall outcomes will be broadly similar, with Democrats winning and Republicans losing. It is possible that some Republican extremists will find their seats less safe than before, but because of the dynamics within that party, it’s unlikely that it would moderate them in any meaningful way. The commission’s first proposal is due in August 2011 and the final proposal in December 2011, so we’ll see what comes of this.

See several important updates below.

At yesterday’s education budget meeting in Los Angeles, educators from across the state took to the microphone to tell Governor-elect Jerry Brown that schools cannot accept more funding cuts without the system collapsing. And Brown, along with Treasurer Bill Lockyer and other state officials, explained that while they understood full well that California’s schools have already been cut to the bone and are funded worse than in almost every other state, there’s not going to be any avoiding those cuts – unless new revenues are approved.

I’ve written before about the California Impasse – the desire of voters for better public services, their openness to new taxes to fund those services, and their hesitation to actually pull the trigger, at least statewide. As was pointed out several times at the event, majorities of voters have shown willingness to tax themselves for schools, but the 2/3rds rule for parcel taxes has blocked these from being successful.

Jerry Brown pointed out that voters statewide aren’t yet willing to accept new taxes for programs, and we saw that during the November 2010 election. Yet he also noted that California is an extremely wealthy state, the 8th largest economy in the world, with a GDP of over $1 trillion. Closing a $28 billion gap with new revenues, just 2.8% of that GDP, should not be a problem.*

So how to resolve the impasse? You have to give Californians a very clear choice: have low taxes and ruined schools, or get our act together and raise the necessary revenues we need to responsibly run our state. In his role as Jacob Marley, he is going to show Californians the error of our past ways, why acting like Scrooge toward our schools, our health care, our parks and our transportation systems is going to produce a nightmarish future. And then he will leave it up to us to make the right choice.

The plan appears to be this: push through an all-cuts budget in early 2011, perhaps shutting down programs like CalWORKS and making massive cuts to K-12 education, and then go to voters with new taxes at a spring special election, and letting California decide what’s more important to them: good schools or low taxes.

The strategy is very risky, as Dan Walters rightly points out:

Even before he could seek new taxes from voters, however, Brown would also have to persuade his fellow Democrats in the Legislature to vote for a slash-and-burn budget. And that could be extraordinarily difficult because Democrats would be getting pressure from their political constituencies, such as public employee unions, and be facing uncertain re-elections in 2012 because of redrawn districts and a new “top-two” primary system.

Were Brown’s doomsday strategy to fall short, he’d be stuck with an even worse budget mess and virtually no option other than following through with deep spending slashes in schools and other public services.

Democratic legislators will want some kind of safeguard in any slash-and-burn budget. And getting the legislature to approve putting a tax proposal on the ballot – which I believe requires a 2/3rds vote** – would be very difficult given Republican obstruction. But this strategy seems to be the only way to break the impasse.

This battle will be, by a wide margin, the most important political battle fought in my lifetime (realize, of course, that I was born a year after Prop 13’s passage) in California. It is a fight progressives cannot afford to lose. We’ve been talking about how to change the public conversation about government and taxes for quite a while – now we have no choice but to execute that strategy, and we have six months at best to do it.

No pressure or anything.

UPDATE: Steve Harmon’s article on this, which quotes me, also includes a telling Jerry Brown quote about this plan, and about the need for progressives to step up and take the lead in educating voters:

“Temporary taxes need to be extended,” said Joel Shapiro, superintendent for South Pasadena schools. “Absolutely, we can’t do without revenues. We need to educate the voters of California “… that the only way to keep the education system from deteriorating worse is to increase revenues, taxes or fees.”

But Brown appeared slightly miffed at the tone Shapiro took toward voters.

“You say we’ve got to educate them — in some ways, they’ve got to educate us,” Brown said. “It’s not really a we/them. It’s society. There’s a lot of hostility to government. They look at the city of Bell, they pick up the paper and see firefighters getting a $250,000 pension. There’s a lot of skepticism about government in the political process. That’s a reality and we have to take the world as we find it and we have to work through it.”

There’s no doubt about the truth of Brown’s words. That skepticism of government is exactly what the right will play upon in their effort to defeat these new revenues. We must be ready.

UPDATE 2: Dan Walters writes with some very important clarifications about two points I marked with asterisks above.

* On California’s GDP:

First, the deficit is actually more like 1 percent of the state’s economy as I pointed out in a recent column and Jerry cribbed on Tuesday. The economy is $1.9 trillion (2009, Department of Commerce) and the structural deficit is $20B.

That just makes the point even clearer – a tax increase of about $20 billion would secure our public services for years to come with a very tiny impact on our economic activity. Surely 1% of our GDP can be harnessed to fund the services that we must have for broadly shared prosperity in this state.

** On how Democrats can pass a budget and propose new revenues without a single Republican vote:

Secondly, it would not necessarily take two-thirds vote to place taxes before voters. It could be done in special session that Arnie has already called on simple majority votes and would be framed as an amendment to an existing statutory tax initiative, such as Steinberg’s income tax surtax for mental health. In fact framing it as amendment to existing tax initiative may be only way to place taxes before voters because that’s the pathway allowed in the state constitution. It was used for 2009 tax-related measures.

Anyway, Jerry and Dems could pass new budget with simple majority vote (Prop 25) and ballot measure by same vote in special session, then adjourn session and wait 90 days for election. Any non-urgency bill passed in special session takes effect 90 days after session ends. That’s the way it could, and probably will, be done to have election in May (perhaps coincident with LA city election) or June.

Awesome. Democrats can do all of this without Republicans, which is fitting given their irrelevance to California politics these days. Let them carp from the sidelines as Democrats and progressives get to work building public support for a real and sensible solution to our state’s budget woes.

UPDATE: Jerry Brown is hosting a education budget summit at 10AM. Click the link to view it live.

There’s no doubt that California’s public schools are facing a severe crisis. Having been hit with $10 billion in cuts in recent years, the dropout rate has risen, teachers have more kids in their classrooms, and more schools are running afoul of federal No Child Left Behind law (which was designed to undermine public education itself). And with next year’s budget deficit at $28 billion, any cuts will include further cuts to public schools – which as Brian pointed out yesterday, can barely handle the strain.

Handling the funding problems facing our schools is going to be enough of a challenge facing Jerry Brown. He also has to deal with the Obama Administration’s embrace of right-wing education “reform” programs pushed by wealthy individuals like Bill Gates that are designed to treat students like automatons and pave the way for mass privatization of schools. Already leaders such as Los Angeles mayor Antonio Villaraigosa are embracing these “reforms,” despite evidence that they don’t really work as advertised.

As the LA Times reports, however, Jerry Brown is having none of it:

Brown has expressed serious reservations about some of those proposals.

“Look, we’re facing big changes, and people who haven’t been around always want to reinvent the wheel with yesterday’s tried-and-failed programs,” Brown told representatives of the California Teachers Assn. in June.

He was even more blunt last year, when as the state’s attorney general he weighed in on Race to the Top. He castigated the draft regulations as simplistic, unproven and overly “top-down, Washington-driven” and called for a “little humility.”

“What we have at stake are the impressionable minds of the children of America. You are not collecting data or devising standards for operating machines or establishing a credit score,” he wrote in the August 2009 letter. “In the draft you have circulated, I sense a pervasive technocratic bias and an uncritical faith in the power [of] social science.”…

“Declaring war from Day One on your employees is not the strategy here,” he said. “He’s going to see if there are any agreements that can be reached, rather than declaring teachers organizations and employee organizations the enemies.”

Wow. I’ve praised Brown’s progressive issue framing before, specifically on immigration, but here again our once and future governor is demonstrating a progressive streak that will be welcome in Sacramento. He understands that the public does not want their children reduced to test scores, and that there is much to distrust in the way the “reform” movement approaches child development and education.

The LA Times article explains that while Brown did not have much involvement with education while governor in the 1970s and 1980s – primarily because, at the time, it was still seen as something handled locally – his experience with the Oakland schools while mayor there has given him much more insight into what works, and what doesn’t work.

Brown has been a proponent of charter schools, helping set up two of them in Oakland. But he doesn’t see them as a panacea, and doesn’t believe they should replace public education as we know it. He certainly does not seem swayed by the flavor-of-the-month reforms backed by Michelle Rhee and Antonio Villaraigosa, where teachers are held to blame for problems largely outside their control, and where test scores are used as a stand-in for the more holistic education that our children want and deserve.

That’s not to say that the only things California schools need is more money – just that it is the primary thing. The flaw with the education “reform” movement is it tends to assume that it is the quality of the teacher that matters most, when most people with actual classroom experience know that what matters most is the social situation of a student.

To reduce inequality in student learning outcomes, we must reduce inequality, period. Students whose parents are unemployed or who have unmet nutritional and health care needs, who live in communities suffering from crime and other effects of 30+ years of deliberate neglect and abandonment, or who do not have firm command of the English language consistently perform lower on a range of academic assessments, not just test scores – and have higher dropout rates. It’s impossible to expect schools to solve those problems on their own.

At the same time, there’s a lot that can be done to improve conditions in the classroom. Smaller class sizes are a tried-and-true method, as are including teaching methods and curriculum that speak to a range of learning styles. It would also be good to involve parents as much as possible, keeping in mind of course constraints on this, especially in lower-income communities where parents are often working multiple jobs just to make ends meet.

In any case, the fact that Brown is rejecting the flawed “reform” movement as exemplified by Rhee and Villaraigosa is a positive sign – he knows that first, he must do no harm. Brown should experiment and be open to ideas, but should also demand that those proposals be backed with firm evidence, and be offered in the best interests of the students and the community – and not in the service of a billionaire or a hedge fund.

Although California saw some big Democratic wins on election day last month, the propositions did not go quite as well. Victories on Prop 23 and Prop 25 were matched by some tough losses, including the failure of Prop 24, which would have closed an unaffordable and unnecessary $2 billion corporate tax loophole.

One of the corporations that fought to stop Prop 24 from passing was Genentech. It was the largest contributor to the No on 24 campaign, giving $1.6 million to the effort. Genentech, like the other companies that opposed it, claimed that closing this tax loophole – which had just been created in the fall of 2008 by a Republican demand in exchange for their vote to pass a budget – would save jobs in California.

But the election was barely over – and the results not even certified – when Genentech turned around and laid off 840 employees in Vacaville and San Francisco. The LA Times’ Michael Hiltzik explains why this matters:

There’s nothing inherently wrong with handing out tax cuts to business to spur growth. But they should be tied to specific performance by the beneficiaries. You say corporate taxes hurt job growth? Fine – we’ll give you a tax break for net new hires. After all, tax breaks aren’t free – every dollar cut for one class of taxpayers increases the burden on everyone else. (California does offer a hiring tax credit, but the program is tiny.)

Instead, California consistently awards tax breaks to business and gets nothing in return. We don’t impose a severance tax on oil producers, unlike every other major oil state; and we give commercial real estate owners a huge property tax break relative to homeowners.

Do we even get gratitude for our pains? No. Business lobbyists continually grouse that California corporate taxes are nearly the highest in the nation. But as my colleague Alana Semuels reported in October, our state and local taxes are right at the national average, measured as the share of private sector activity. Who’s higher than California? Those “business-friendly” states of Texas, Nevada, Arizona, and Alaska, among others.

This whole argument about tax cuts being good for California jobs is simply a sham. Tax cuts, tax loopholes, and tax credits generally do little to create jobs – their real purpose is to simply channel more wealth to the already rich. If that weren’t the case, companies wouldn’t be so adamant that tax loopholes and credits not be subject to strict review and oversight so that they can be closed if they aren’t producing new jobs.

We can expect to hear more of the Genentech “we need lower taxes to create jobs” argument if and when a proposed June 2011 special election takes place, asking Californians to raise taxes to save public services. Let’s remember what Genentech actually did once Prop 24 passed – and make sure Californians know about it.

Over the last week, President Barack Obama’s deal on the tax cuts – where he caves in to right-wing hostage taking and agrees to deficit-exploding tax cuts for the rich in order to get a few more months of unemployment benefits – has gotten a lot of criticism from progressives, who correctly see it as a very bad deal.

Many of those critics are here in California. And that is fitting, because we have faced this situation before – and we made the correct choice, to reject a bad deal designed to promote right-wing goals and instead keep fighting for progressive solutions.

In February 2009, Democratic leaders in Sacramento cut a budget deal with Governor Arnold Schwarzenegger to close a $20 billion deficit. The deal included temporary tax increases that lasted until mid-2011, but also included several ballot initiatives for a May 19, 2009 special election that would extend these taxes and take money from other voter-approved funding streams, including funds for early childhood programs (First 5) and for mental health services, along with “securitizing” the state lottery.

One of the ballot measures, Prop 1A, extended the tax increases for another 2 years – but only at the cost of accepting a spending cap. A spending cap has been a Republican holy grail since 1979, when Paul Gann’s Proposition 4 passed, designed to limit the growth of state spending. John Garamendi later put Prop 111 on the June 1990 ballot to eviscerate the Gann limit, and its passage sent the right back to the drawing board to impose a spending cap to achieve the destruction of state government they’ve always desired.

California voters have twice now rejected a spending cap – Prop 76 went down in flames as part of Arnold’s 2005 special election, and Prop 1A failed in May 2009 as well. Progressives understood the danger of the spending cap, and that it would make austerity permanent, further enshrining right-wing ideology in the state constitution.

Here at Calitics, we strongly denounced the deal from day one. But as soon as the campaign for the May 2009 special election proposals got under way, Sacramento Democrats began a full-court press to convince progressives, unhappy with the bad deal, that we had to support it – or else cause widespread suffering.

One Sunday in April 2009, I was on a conference call with then-Speaker Karen Bass and her staff. She was anxious to get me and others to back the initiatives. For two and a half hours we discussed the deal. I understood Bass’s point, that if the initiatives failed there would be “ugly” cuts that would hurt people. But I rejected the premise. I pointed out that not only would Democrats still have the ability to drive a better and harder bargain because they had the votes to block Republican budgets – but also that the long-term damage of the deal would cause MUCH more harm than any short-term pain.

Bass and her staff kept returning to the same metaphor that President Obama used in his press conference last week: that Republicans had “taken hostages” and we could not let them shoot the hostages. My response was the same then as it is now: giving in to Republican demands merely encourages them to take more hostages in the future, while the deal itself would cause much more pain indefinitely, given the effects of the spending cap.

At the time, I was working as Public Policy Director for the Courage Campaign, and as always, the Courage Campaign polled our members on the initiatives for our endorsement in our progressive voter guide. We presented Bass’s and Darrell Steinberg’s arguments alongside a staff recommendation that the initiatives be rejected. Courage members saw both sides, and overwhelmingly voted to reject Prop 1A and the other flawed proposals. A few weeks later, on May 19, Californians as a whole did the same thing; the special election initiatives went down in flames.

And yet the suffering that was predicted never materialized. Sacramento Democrats didn’t surrender to Republicans. They kept fighting. Within days, progressives and Sacramento Democrats had put the special election split behind them to unite to fight Arnold Schwarzenegger’s austerity – and to lay the groundwork for proposals for the 2010 ballot to advance the progressive cause. Out of that post-May 2009 effort came Prop 25, which finally restored majority rule on the budget.

To be clear, we still have not solved the budget crisis. Progressives have not suddenly fixed California’s problems because we rejected the May 2009 proposals. But neither are we permanently hamstrung by a right-wing spending cap. By late 2009 the progressive movement and Sacramento Democrats were working to defeat Meg Whitman and her right-wing fiscal plans. That victory has now paved the way for a June 2011 special election that, we hope, will provide a clear choice for Californians – austerity or stimulus.

What we learned in May 2009 is that it’s OK to reject a deal that is rigged to advance Republican goals. We can live to fight another day, the sky will not fall, the world will not end. It is imperative that we do the same and reject the president’s foolish deal.

Everything in this deal is designed to advance Republican goals. The huge spike in the deficit is intended to force massive federal budget cuts in 2011. The payroll tax cut is intended to make Social Security’s finances look bad and force big cuts to that program. The one-year extension of some unemployment benefits (and not to the 99ers) is intended to set up another hostage crisis whereby Republicans can take advantage of Obama’s naive understanding of politics and do this all over again. Progressives are told that if we don’t support this deal, people will suffer – but if this deal becomes law, a LOT more people will suffer a great deal more, and over a longer period of time.

Californians are now in the position Winston Churchill was in 1938 – denouncing appeasement as a fool’s errand that will only result in greater demands that forestall the inevitable fight. Some might object at the comparison, but it’s merely the most familiar example of appeasement; history is full of others. The basic concept is always the same – when a more powerful side is afraid or unwilling to fight, and are willing to make deals with extremists, the extremists will always come back for more and will always demand an even more insane price to avoid the fight. But in the end, you WILL have to fight the extremists, or else surrender to them entirely.

Neville Chamberlain eventually understood this, declaring war on Nazi Germany in September 1939 after Poland was invaded. Had Britain stood firm at Munich a year earlier, or had France been willing to stop German rearmament, perhaps there would have been fighting sooner, but it is also possible that one of the most horrific experiences in human history could have been stopped.

I hope that the stakes are not nearly as apocalyptic today as they were then. But we know how this story is going to end. Barack Obama will eventually have to fight the Republicans. He does not want to; he is an appeaser at heart. But there will come a moment when Republicans demand the equivalent of the surrender of Poland, and Obama may finally realize he has to fight. Either that or he simply yields to the right and lets them do whatever they want.

Let’s hope that progressives understand the lessons of history, particularly the May 2009 special election here in California: you don’t have to give in to Republican demands. Instead it is better to fight now, since the fight will come eventually, rather than make huge concessions to the right and be in an even worse position when the battle begins.

After seven years of Arnold Schwarzenegger imposing a right-wing shock doctrine on us – creating a crisis through bad management of the state’s budget, including a refusal to raise taxes during a boom, then using that crisis to push through radical solutions that the public would otherwise never have supported – Jerry Brown may be planning a shock doctrine of his own. But this time, it would be more progressive, and would be designed to produce better government instead of to destroy it.

That’s what I take from this LA Times article on Brown’s possible budget plans:

California voters could be presented with a tough choice by summer under a proposal that Gov.-elect Jerry Brown is considering: Approve new taxes or other revenue in a special election, or live with far fewer government services.

Brown is holding talks with small groups of lawmakers and influential interest groups about how to put that decision before the public. He won’t discuss his plans publicly, but people involved in the private discussions expect him to propose a special election after enacting a dire austerity budget in the spring.

This is probably the only way to resolve what I called the California Impasse – the fact that the public wants good government services, and is generally willing to pay for it with higher taxes, but hasn’t yet been willing to actually pull the trigger – partly because nobody has ever actually asked them to do it, not since 1978.

By showing Californians exactly what their future will look like without new revenues, Brown offers the best chance to win voter approval of the funding we need to keep our schools open, to enable our kids to attend college, to ensure people get the health care they need, and to provide the public services that are necessary to enable job creation.

I cannot recall a moment in at least the last 32 years when that choice, which is the choice at the heart of what it means to govern California today, was ever put directly to the voters. In the aftermath of Prop 13, Democrats became skittish of proposing new revenues, afraid that the voters would destroy their political fortunes if they did. So for three decades, Democrats preferred to stoke asset bubbles to provide the job creation and tax revenues that had been undercut by Prop 13’s passage.

Now, as Jerry Brown laid out at yesterday’s budget meeting, there is no avoiding this central question any longer. Either we go all-in on right-wing policy, destroying the government services that enabled our 20th century prosperity, or we embrace a progressive future that can rebuild the California Dream for the 21st century.

Some wonder if the May 2009 special election result bodes ill for a June 2011 special election:

In 2009, the Legislature and Gov. Arnold Schwarzenegger placed six budget-related measures on a special-election ballot. They included extending temporary tax hikes as well as proposed limits on future state spending. Voters overwhelmingly rejected them.

The problem here was that progressives were asked to support a truly reckless right-wing proposal, a spending cap, as the price of extending the temporary tax increases. Progressives were given the same kind of arguments that President Barack Obama is giving now to defend a similarly crappy tax deal – that we have to appease Republicans or else mass suffering will result. Progressives rejected that argument in May 2009, and have rejected it again in December 2010.

If we get a clean proposal – a truly progressive solution to the state’s budget crisis that finally closes the structural revenue shortfall and helps fund our services and programs that are essential to 21st century prosperity – then progressives will work our ass off to get them passed in June.

Let’s hope Jerry Brown understands that, and proceeds accordingly. In June 1978, the right succeeded in destroying the California Dream. In June 2011, the left will finally have a chance to restore it.

Jerry Brown is hosting a budget briefing today in Sacramento, which you can watch live via the California Channel’s stream. According to KQED’s John Myers, Brown’s handout being distributed at the event projects a $28.1 billion budget deficit, higher than expected thanks to President Obama’s proposed tax deal that includes a continuation of the estate tax elimination. The handout also states that “short-term or unrealistic fixes” have comprised 75%, 84%, and 85% of the last three budget deals.

Clearly, Brown is planning to reject these kind of quick fixes. We’re hoping that today’s briefing will more clearly lay out what exactly that means. I’ll post some updates here as it goes along, but for more frequent updates, follow my Twitter feed @cruickshank. Once it’s done I’ll post a more detailed review of what, if anything, we learned about the once and future governor’s budget plans.

UPDATE: So, that was interesting. You can view the slides from the presentation over on Jerry Brown’s website. As far as I could tell, the event was designed to communicate the following points:

1. Next year’s budget deficit will be worse than this year’s.

2. That is partly because too many gimmicks and short-term fixes were used, including temporary tax hikes or federal stimulus funds.

3. Borrowing has been a problem – California does too much of it, and it is eating up more and more of the general fund.

4. There is a structural revenue shortfall of about $20 billion.

5. There is no easy way to close this, all options suck. Spending cuts would have be to entire areas of service, like higher ed or Medi-Cal. Tax increases would also have to be significant.

Jerry Brown refused to be drawn into a discussion of solutions, even though the legislators in attendance really wanted to go there. My own Assemblymember, Bill Monning (AD-27), got a round of applause when he called for new revenues to be on the table.

Meanwhile, Republicans called for mass spending cuts, once again reminding us why they are irrelevant. Connie Conway, the new Assembly GOP leader, came off as the crazy aunt who isn’t really in touch with reality.

In fact, there was no good reason for Conway to be up there at all. Senate GOP head Bob Dutton refused to sit on the dais, and I’m guessing they were invited because Speaker John A. Pérez and Senate President Pro Tem Darrell Steinberg were there too. But it wasn’t right. The California Republican Party is a minority party that is only barely relevant thanks to the lingering 2/3 rule for new revenues and fees. If that 2/3 rule didn’t exist, the California GOP would be little different than the CA Green Party. Even as things stand, I do not see why the CA GOP should be treated as a legitimate partner in closing the deficit – they’ve shown that they only care about slashing government, which nobody wants. In the future, just ignore the Republicans and their wacko rants.

Anyhow, where was I? Oh yeah. Bill Lockyer quoted the rating agencies as saying that CA’s debt rating, while still in decent shape, was at risk of being further downgraded. My response: so what? The debt rating agencies have proven themselves to be fraudulent and dishonest, and they are almost certainly lowering our ratings so that their Wall Street allies can extract higher rates from us. Nobody talked about a state bank today, but they should have – it would help free us from this bullshit.

John Chiang pointed out that California will probably not run out of cash for the rest of the fiscal year, but because of the way budgets and tax revenues work – checks are cut in July, especially for schools, but revenue doesn’t start coming in until the end of the calendar year – summer 2011 could see a cash crunch.

The right-wing Legislative Analyst, Mac Taylor, argued that both revenues and spending cuts should be on the table, but made it sound like they were equally damaging options, and claimed that tax increases would act as a disincentive to economic activity. That’s not true at all. Better government services that provide for people’s needs help spur economic activity, by freeing people up to create and innovate instead of spending what little money they have to take care of the basics.

Brown framed today’s discussion as a chance to “agree on the problem.” As far as I can tell, there will never be any such agreement, because the GOP minority refuses to ever accept another tax increase again, and unfortunately has the power to block it.

Hopefully Brown will include new revenues – and a restoration of majority rule for revenue decisions – in his own budget plans. Otherwise we’re going to just keep replaying this scene again and again and again for a long time to come.