All posts by Robert Cruickshank

Gas Fee To Balance Budget?

That’s the newest proposal from the Sacramento Democrats:

The plan eliminates the current 18-cent-a-gallon excise tax on gasoline as well as the sales tax on gasoline, funds that are typically set aside for transportation projects. Instead, the state’s sales tax for all other goods would be raised by half cent, bringing in more revenue for the general fund.

The state would establish a new gas fee – 39 cents a gallon – to pay for transportation projects that previously had been paid for by taxes on gasoline.

The legislative source said all of the proposals would require a simple majority vote because the proponents believe “when you reduce tax in one area, you can raise tax in another area” without requiring two-thirds majority by the Legislature.

The Dems’ plan includes some other tax solutions, including requiring independent contractors to withhold 3% of pay instead of provide a lump sum, a 2.5% surcharge on all personal income tax, an oil severance tax, and a 1/4 increase in sales taxes as part of a complex bond financing change.

It’s an interesting proposal. I’m all in favor of a higher gas tax, and if they can get around the 2/3 requirement all the better.

At the same time this has pitfalls. Dems ought to stake their colors to an outright increase in taxes on the wealthy as both Ronald Reagan and Pete Wilson did. Raising gas taxes fees could be a tough sell just as drivers are getting used to seeing 1990s-era prices at the pump.

Republicans and anti-tax nutjobs like the Howard Jarvis Association would likely sue over the gas “fee” so this could be a temporary solution at best. But perhaps it will give us breathing room to put a 2/3 repeal on the ballot and start making the case to Californians for taxes and not cuts.

Republicans to California: Drop Dead

Crossposted at Daily Kos

The Scrooge Party delivers a lump of coal to Californians the week before Christmas and Hanukkah in the form of their spending cuts plan. $22 billion in cuts is what they propose, cuts that would throw California into an outright economic depression by destroying what remains of the safety net, delivering a crippling blow to public education and public transportation, and attacking Californians too sick or disabled to defend themselves.

Some of the more outrageous demands:

Medi-Cal (1) Reduce eligibility for working families and immigrants, (2) eliminate certain optional benefits, including, optometry and psychology, and (3) reduce reimbursement rates for public hospitals

$406.1 million

Eliminate State Funding for Transit Agencies

$459.6 million

Proposition 98 (K-14) – Fund education at minimum guarantee under voter-approved Prop. 98, provide flexibility in education spending

$8.65 billion

Higher Education – 10 percent across-the-board reduction to University of

California, California State University and Hastings

$264.2 million

The Scrooges also proposed “new revenues” which are actually cuts to existing programs – raiding funding for mental health, for example, to balance the rest of the budget:

The Republican budget plan relies on $3.9 billion taken from Proposition 63, the measure voters approved in 2004 to fund mental health programs, as well as $2.1 billion taken from Proposition 10, the tobacco tax that funds children’s health programs.

Both programs have substantial reserves in the bank, and the Republicans propose going to the voters in a 2009 special election asking them to siphon away those reserves to help lower the state’s deficit. Advocates of the programs funded by those initiatives say the money is already earmarked for projects in the pipeline.

One wonders how the Bob Cratchits and Tiny Tims of California will react to this budget, a Dickensian act of profound irresponsibility that will not only worsen our economic crisis but permanently weaken public services.

But that is of course the goal. Public schools, mass transit, Medi-Cal, mental health programs – these programs and the Californians who depend on them have long been targets of the state’s Republican minority. The Scrooge Party wants them all to suffer for good, wants to use this budget deficit to settle old scores and deny a decent life and a decent future to most people in this state.

These cuts are the product of deranged minds, and cannot be allowed to stand.

Prop 8 and the Importance of Conservative Victimology

Conservatives have for decades cultivated a politics of victimhood – presenting themselves as victims of some group, usually liberal and often an oppressed minority, in order to gain sympathy for their insane beliefs and to delegitimize progressive ideas and actions. We’re witnessing it on Proposition 8 as well, and now the media is playing along. The result is a massive distortion of the true effects of Prop 8, and the normalization of support for discriminatory policy.

The specific case is that of Margie Christofferson, who quit her job as a manager at LA’s El Coyote Restaurant under pressure from activists and customers angry at her donation of $100 to the Yes on 8 campaign. Her journey from oppressor to victim has been aided by Steve Lopez of the LA Times, who wrote a deeply flawed column on Sunday casting Christofferson as a sympathetic figure:

Margie Christoffersen didn’t make it very far into our conversation before she cracked. Chest heaving, tears streaming, she reached for her husband Wayne’s hand and then mine, squeezing as if she’d never let go.

“I’ve almost had a nervous breakdown. It’s been the worst thing that’s ever happened to me,” she sobbed as curious patrons at a Farmers Market coffee shop looked on, wondering what calamity had visited this poor woman who’s an honest 6 feet tall, with hair as blond as the sun.

That sets the tone for a column that blames the victims of Prop 8 for making this poor woman cry, and Lopez isn’t above repeating disputed claims that riot police showed up at El Coyote during a recent rally. But perhaps the most troubling part of the column was Lopez’ normalization of her support for discrimination:

But I didn’t like what I was hearing about the vilification of Margie Christoffersen and others in California being targeted for the crime of voting their conscience.

“Voting our conscience” has been one of the key methods by which Prop 8 supporters have escaped responsibility for their actions or even acknowledging what Prop 8 was – an attack on the legal equality of thousands of Californians merely for their sexual orientation. When framed this way the Yes on 8 position becomes almost unassailable, immune to criticism. “They’re just voting their conscience,” we’re supposed to think, and not be allowed to ask them to face the realities of what they have done, not be allowed to criticize them for voting to take away equal rights and destroy existing marriages, and not be allowed to act with our own conscience by denying those who backed Prop 8 our patronage. Each of those acts is cast as an aggressive and hurtful act, where the oppressed are cast as oppressors.

Lopez mentions almost in passing that “thousands [of gay people] feel as though their civil rights have been violated” but their concerns and views don’t get the sob story treatment Margie Christofferson got – even though she knew full well what she was giving money for, and continues to believe that her vote for Prop 8 was the right move. As Lisa Derrick notes she has never apologized to her once-loyal customers for what she did. Obviously she feels no need to offer any such apology.

Lopez’ column writes the real victims of Prop 8 out of the story and replaces them with their victimizers. Once again GLBT Californians and their fundamental rights are treated as either deviant or invisible. The only people whose opinions matter are those who oppose gay rights, and if someone dares call it out then they become  the oppressors. Standing up for gay rights, for marriage equality, becomes itself an act of hate.

Margie Christofferson is not a sympathetic figure. She is someone in deep denial of reality, who is unwilling to reconcile her relationships with her own intolerance. It’s not the rest of Los Angeles’s job to play along with it, to enable it, to pretend as if it doesn’t exist. Doing so merely continues the decades of injustice that comes when good people do nothing and discrimination is treated as normal.

It would be nice if the traditional media would recognize this. It’s not likely that they will. Martin Luther King, Jr. may be venerated today but he was a controversial figure in his day who received FAR more criticism from the media than credit, who was told that the March on Washington was a dangerous provocation that should not be attempted. The Civil Rights Movement rightly refused to let such concern trolling stop them. We who are part of the marriage equality movement would do well to learn that lesson.

Yacht Party Decides to Let Ship of State Sink

As the UCLA Anderson Forecast projects a “nasty recession” with “ugly” unemployment figures that won’t turn around until 2010 at the soonest, California Republicans have decided to join their fellow partisans in the US Senate and place pathological hatred of unions and environmental laws ahead of our fiscal and economic survival.

The LA Times reports that Mike Villines was willing to support a VLF increase – but only if Democrats agreed to his insane and possibly illegal demands for cuts in government programs and regulations:

Sources said Villines raised the possibility of GOP support for a higher car fee in budget negotiations last month, saying he thought that he could bring rank-and-file Republicans along if Democrats agreed to steep cuts in government programs and a permanent cap on state spending.

The sources who were in the room said his suggestion came after Democrats offered spending cuts they would reluctantly agree to implement.

Villines denies it of course – he’s got to keep up the anti-tax front – but this is typical and unsurprising. Republicans have a habit of promising to finally do what common sense has long dictated – provide a bridge loan to automakers, ensure that California doesn’t go bankrupt – but only if Democrats agree to destroy a union, or a government program, or an environmental treasure. And if Democrats refuse to go along with such recklessness, Republicans walk away and let everything collapse.

I suppose I should see Villines’ willingness to embrace a VLF increase as a victory, but what this really does is bring into clear view the fact that the Yacht Party has no intention whatsoever in trying to solve this crisis. They genuinely don’t care what happens to schools, health care clinics, or the economy as a whole. They’re out to break liberalism, whatever the cost.

We’re not dealing with rational actors here. The focus of political work in California is no longer about trying to work out a budget deal. It’s about defusing a full-blown hostage crisis where every one of us – our economic security – are being used as pawns in Villines’ game.

Combined with Dave Cogdill’s crybaby move at today’s budget talks this suggests a clear strategy for moving forward – show Californians just how reckless and dangerous the Republican Party has become. And if any of these jokers want to have a shot at higher office in 2010 they’re going to have to defend their decision to let this state collapse in their desire to settle old scores.

California will pull through this crisis, but the light at the end of the tunnel never seemed so far away.

Mass Layoffs Aren’t A Budget Solution

I will be on KRXA 540 AM at 8 this morning to talk about this and other issues in California politics

It would seem an obvious point, one that Dave Johnson made so well – mass layoffs aren’t going to solve our budget deficit. Unfortunately that seems to be exactly what many Republicans and some media outlets are suggesting be done to close the gap.

Some of this is outright union-busting, not unlike what Bob Corker and other Republicans are doing by opposing the auto bailout. Just as the 1970s crisis was used by corporate leaders and their right-wing allies to break the unions, so too do Republicans wish to do the same thing.

The SacBee’s State Worker column suggests that some CA unions – in this case SEIU 1000 – are already “rethinking their hard line” on job cuts:

Has California’s growing budget mess pushed public employee unions into retreat?

Take Service Employees International Union Local 1000, which represents 95,000 state workers in a wide variety of jobs. Last week local President Yvonne Walker told The State Worker, “There are going to have to be cuts. We’re going to have to raise taxes” to address the state’s cash crunch.

This was the same union leader who last month, after Gov. Arnold Schwarzenegger proposed furloughs and other measures to trim the budget deficit, said, “We’ll fight back with everything that we have.”

Between Walker’s two quotes, the governor threatened to detonate the labor equivalent of a nuclear bomb: layoffs. It’s one thing a California governor can unleash without negotiating with unions or legislators.

“We don’t get to decide whether the state lays off people,” Walker said in an interview. “We make sure it’s done fairly and try to offer alternatives to doing that. Realistically, we don’t have the ability to stop a layoff if it comes.”

Jon Ortiz may be reading a bit too much into that statement, which doesn’t exactly suggest that unions like SEIU 1000 are changing their “we’ve had enough cuts” tune.

Let’s hope they aren’t. Mass layoffs of public employees will only produce two outcomes – a significant worsening of our economic crisis, and an intensification of the budget deficit. The laid-off workers will not be spending money and thereby generating tax income. How many more workers will lose their jobs as a result?

The lack of government services will also worsen the economy and hurt economic recovery efforts. If workers can’t go back to school or get job retraining, if families have to do without health care, the consequences are dire. California’s prosperity was built on government services constructed during the Pat Brown years. The Schwarzenegger-Republican solution would instead turn California into a basket case.

Besides, with the budget deficit nearing $40 billion there’s no way mass layoffs alone could solve the problem, as Ortiz notes:

State worker jobs this fiscal year, barring layoffs or other cuts, will account for $23 billion. That’s roughly 17 percent of California’s expenses. So making job cuts won’t drain much red ink from the state ledger.

That leaves hatred of public workers and union busting as the primary reasons for demanding spending cuts mass layoffs. Once again Californians are being asked to pay the price so wingnuts can impose their ideological fantasies on the state.

Solving this budget deficit requires new revenues at the state level, where we’ve already cut $15 billion from the budget. But that won’t be enough – we need federal assistance as well. California  sends $47 billion more to Washington DC than we get in return. That money alone could help ease the budget crisis. It may not be politically possible or even desirable to bring all of that home, but it does suggest the need for a federal bailout of state and local governments.

If California resorts to mass layoffs the result will be a depression. And that has national ramifications. Congress is right to find ways to stabilize the auto industry. They need to do the same for state and local governments. California cannot be allowed to fail.

Don Perata Gives a $1.5 Million Middle Finger to California

In a stunning but not too surprising revelation, Josh Richman of the Oakland Tribune is reporting that Don Perata transferred $1.5 million from his PAC to his legal defense fund – one day after the election. Instead of using that money to help defeat Prop 11, which narrowly won, or to help elect more Democrats to the state senate – such as Hannah-Beth Jackson, who lost by 1,200 votes – he took it for himself, leaving California Democrats and the state itself worse off.

Contributors to Don Perata’s political action committee this year might have thought their money would bankroll the attempted recall of state Sen. Jeff Denham or opposition to a legislative redistricting reform measure.

But one day after Election Day and with only a few weeks left as state Senate President Pro Tem, the Oakland Democrat moved $1.5 million from Leadership California into his own legal defense fund, formed to counter a years-long FBI corruption probe.

This sum dwarfs the California Democratic Party’s $450,000 contribution to Perata’s legal fund over the past year, which had caused an outcry from some party activists. It also dwarfs the $555,000 Perata had moved from his Taxpayers for Perata committee – ostensibly created for a 2010 Board of Equalization run – into his legal defense fund in several chunks since 2005.

The transferred amount is more than the entire $1.4 million the committee had raised in this year’s first nine months, and more than half of the $2.7 million it had on hand as of Sept. 30.

Jason Kinney, Perata’s spokesman, is quoted as saying there was nothing illegal here. Even if that is true, it’s beside the point – $1.5 million is a huge sum of money that should have been spent on winning the 2008 election, not pocketed by a termed-out legislator.

Our own David Dayen is quoted in the article making that very point with forceful eloquence:

David Dayen, an elected Democratic State Central Committee member from Santa Monica, blogged angrily this summer about his party’s contribution to Perata’s legal defense fund, contending the money would’ve been better spent on legislative races. The same goes for Leadership California’s money, he said Wednesday; despite a Democratic presidential candidate carrying California by the largest margin since 1936, Democrats netted only three more Assembly seats and none in the state Senate.

“Every time I asked the California Democratic Party about getting more active and involved in local elections, they said the state Senate and the Assembly control those races … and we don’t have a lot of flexibility. So Perata, at that time, and Nunez or Bass had the authority to run those elections,” Dayen said. “Now we see what happens when you vest power in these closed loops – suddenly self-interest becomes more important than the good of the party.”

He believes this is why Perata didn’t step aside as Pro Tem earlier, as Assembly Speaker Fabian Nunez relinquished his post to Karen Bass in May: “Darrell Steinberg was sitting there ready to go … and we were all like, ‘What the hell is going on?’

“We speculated it had to be that he still needed the leverage to make the calls to raise money for himself.”

David makes a key point here – this is not just about how Perata screwed California Democrats. It’s about what he called “closed loops” and a party leadership hostile to open accounting. This should become a rallying cry for all Democrats to demand more accountability from their leaders, and a greater commitment to winning elections as opposed to pocketing those funds for your own uses.

Many in the Democratic grassroots, including a large number of CDP delegates, want to build a better, more successful party, using the disappointing results on the state level as a motivating force to produce change. That is made easier by Perata’s long overdue exit from the Legislature. But this should serve as a wake-up call for the CDP as a whole, which must take a strong stand against this kind of action and take whatever steps are within their power to prevent it from happening again.

Substantially Worse

Dan Walters caught one of the more important pieces of information that was revealed at yesterday’s budget convention:

Thousands of words were spoken Monday during an unusual joint session of the Legislature on the state’s budget crisis, but the two most important were uttered by the state budget director, Mike Genest, when he quietly told lawmakers that the deficit will be “substantially worse” than the current figure, as staggering as it may be.

The current estimate is that the 2008-09 budget is $11.2 billion out of whack and the 2009-10 income-outgo gap is another $17 billion, but with new forecasts of a declining economy and up-to-date revenue numbers, state officials believe that both numbers could be as much as 50 percent higher, around $40 billion.

Gov. Arnold Schwarzenegger will reveal the higher deficit figures a month from now when he unveils a proposed 2009-10 budget.

These numbers are staggering, but within the realm of possibility – the economy is in free fall right now, and with hardly any safety net in place it makes sense that consumers are going to stop spending, employers will lay off workers, all of which reinforces the cycle. Things seem to be snowballing.

Obviously a deficit anywhere near $40 billion would be catastrophic. It would be a perfect moment to shock doctrine California – massive destruction of public services, many of which will wind up privatized; a state thrown into depression when government employment – which ought to increase in a recession – is contracted.

It will also be an opportunity to finally “blow up the boxes” as Arnold once promised – a deficit of that size ought to give progressives an opening to advocate for a modernized, fair, and realistic tax structure. Wealth taxes must be at the core, just as they were for FDR during the Depression – that’s money we can easily get and that won’t worsen the economic crisis.

Such a deficit would also suggest the need for federal assistance. There’s no way California can close that gap alone. Federal aid for health care and education spending in particular would be of enormous help. Obama and the Congress rightly worry about the Big 3 going under and taking Michigan and Ohio with them. California’s budget deficit could have a similarly disastrous economic impact, especially if massive cuts are used to close the gap. The entire US economy would take a hit.

Karen Bass wants to have a budget deal in place by the end of the year but Republicans are sticking to their shock doctrine guns, demanding a gutting of labor and environmental laws as their price. We know they aren’t going to give in easily.

At this rate, Sacramento Republicans may well be playing Scrooge for not just California, but the nation as a whole.

Mike Thompson at Interior?

Another California member of Congress may be off to join the Obama Administration – in this case, Mike Thompson of CA-01 (North Coast, Sonoma, Davis, and the Congressional Wine Caucus). Raul Grijalva of AZ-07 has fallen off the shortlist and though Kevin Gover, a member of the Pawnee Tribe and current head of the Smithsonian Museum of the American Indian is getting talked about, his spokeswoman told the WaPo “he has not heard anything from the transition, nor does Kevin expect to.”

That leaves Mike Thompson as a frontrunner – which isn’t sitting too well with environmentalists concerned about the Blue Dog’s decidedly mixed environmental record. Gristmill has the lowdown:

In 2003, he voted for Bush’s controversial Healthy Forests Restoration Act, which enviros saw as a massive gift to the timber industry.

In 2004, he voted against an amendment to an Interior appropriations bill intended to protect wildlife and old growth trees in Alaska’s Tongass National Forest by stopping taxpayer-subsidized logging road construction. The measure passed by a vote of 222-205, and he was the only California Democrat to vote against it. He also opposed an amendment to ban the act of bear-baiting in national forests and Bureau of Land Management lands.

He was also one of only 30 Democrats in 2006 to vote against an amendment to the Forest Emergency Recovery and Research Act that would maintain areas of the national forests protected under the Roadless Rule. He also voted against another amendment that would have required the Forest Service to comply with environmental protection, endangered species, and historic preservation laws when conducting “salvage logging” operations in national forests. The amendment failed.

North Coast environmentalists are also skeptical of his support for sustainable land use policies:

Mike Thompson has a Democratic Party constituency that is much more liberal than he is. During the years of Republican dominance in Congress he prided himself on being a centrist who voted with the Republicans on issues like tax cuts for the rich. In return the Republicans had no problem with doing some things for Congressman Thompson’s donors in the timber and wine industries….

A real test of Mr. Thompson’s environmental credentials would be: is he willing to close down his vineyard and winery friends in his own district by no longer allowing them to suck water out of the rivers and aquifers? Ask the environmentalists who live on rivers like the Navarro about how much water is left for the Salmon once vineyards finish taking their sips. Ask environmentalists in Napa County about pesticides in ground water and runnoff.

Grist also notes that he has an 88% lifetime rating from the League of Conservation Voters, but the above is enough to indicate he wouldn’t exactly be the change we need at the Interior Department.

If Thompson is picked, however, that would open up another California Congressional seat. Who would replace him? The district has a Cook PVI rating of D+10 and Democrats have a 20 point registration advantage (46% to the GOP’s 26%).

Although I’m not as familiar with CA-01 as some of our readers might be, it would seem ripe for a shift toward a more progressive Democrat should Thompson get the nod for Interior. Davis, and Humboldt, Mendocino and Sonoma counties can’t be hurting for progressive leadership.

I hope folks familiar with the seat will share their thoughts in the comments. While I’m hoping Obama picks someone more progressive for the Interior post, a Thompson pick could set in motion an interesting set of political dominoes on the North Coast.

Cal-PERS and the Coming Attack on Public Workers

I will be hosting a two-hour radio show on KRXA 540 AM this morning at 8, to discuss this and other issues in California politics

Given the recent losses in the stock markets, this news should come as no surprise:

The California Public Employees’ Retirement System portfolio has lost 31.1 percent of its value since peaking last fall, a staggering $81.4 billion drop. CalPERS officials say a “rainy day fund” is helping to defray the losses – for now. But if the market slump continues, they will hit up state and local employers for more money. That’s a painful prospect as California struggles through a fiscal emergency and municipalities cope with the foreclosure crisis and economic downturn.

Cal-PERS has the power to force the state and local governments to increase contributions to make up for shortfalls. That is good for the state economy, because well-funded pensions help provide jobs and ensure that retired workers are financially secure, easing the burden on and creating more job openings for younger workers.

But that’s also a political problem as the costs can cause a political backlash against not just Cal-PERS as an institution, but against public workers for being “greedy” for daring to want a secure and properly funded pension. Already Orange County has decided to put public workers’ pensions to a public vote, a move designed to screw those workers out of a fair retirement.

Here in Northern California public workers have taken the brunt of the blame for the Vallejo bankruptcy. In Pacific Grove, the town next to Monterey, I was treated to the spectacle all year of so-called progressives attacking public workers and Cal-PERS for causing the city’s financial problems (which actually stemmed from poor accounting, giveaways to the politically connected, and a refusal to raise taxes).

As the economic crisis worsens across California well-funded pensions are an absolute necessity. The movement that eventually produced Social Security, for example, was born in California out of a desire to provide for elderly folks without the cost burdening families already mired in Depression.

We run a very real risk in California of this economic and budget crisis dramatically accelerating the destruction of the public sector, the race toward the bottom. It’s important for us to recognize that government jobs and fair wages and benefits promote economic growth. To undermine and cut them at this time would feed the deflationary cycle and worsen the economic picture.

But maybe that’s just what the right-wing wants

The Economic Picture Grows Darker

The national unemployment news is grim – 533,000 jobs lost in November, with the September and October numbers revised downward. Over 1.2 million jobs have been lost in the last 3 months.

The California figures are even worse. The US unemployment rate is at 6.7% but we blew past that long ago – 8.2% as of October 31 and likely to be significantly higher after November’s numbers are in.

Those figures don’t paint a picture of the true distress in California. The California Budget Project reported that 2.3 million Californians are underemployed or outright unemployed – many who have jobs are working part-time when they’d rather work full-time, or have begun to give up their job search.

This is exacerbated by the erosion of the safety net:

Government programs in place [during the last major recession, 1981-82] to cushion and counter recessions have been scaled back sharply, raising questions about whether they are up to the task as the economic outlook darkens today.

Unemployment insurance is not as generous now. Yet the unemployment rate is at 6.5 percent and some forecasters say it could top 8 percent next year. It hit 10.8 percent in the early 1980s.

This is also the first severe economic slump since President Bill Clinton overhauled the welfare system and made it tougher to qualify for, and keep receiving, benefits. Many people who lose their jobs now and fall into poverty may not qualify for public assistance. Other programs designed in part to counter hard times – like job training and housing subsidies – have also been cut back.

Here in California the erosion of that safety net has been severe. Unemployment benefits have been cut. Health care subsidies are being cut. Education, which is necessary to provide workers with job retraining and to producing entrepreneurs, creators, and inventors, is being cut. Senior citizens are seeing their drug and even housing benefits cut, which places the burden on their families.

And the Republicans’ demand for massive spending cuts threatens to dramatically increase the ranks of the unemployed in California. If the budget deficit is solved by spending cuts, in whole or even in part, the result is likely to be an outright Depression in California.

Government’s job is to provide counter-cyclical economic stimulus. Spending cuts are what’s known as pro-cyclical – they exacerbate a slide into recession rather than counter it. Spending needs to be increased right now to bolster the safety net and ease the worsening recession.

As the California Budget Project explained, citing leading economists like Joseph Stiglitz, “tax increases on higher income families are the least damaging mechanism for closing state fiscal deficits.”

That kind of framing needs to be placed at the center of the state budget discussion – a discussion that itself is really about the economic future of this state.