Today’s SF Chronicle examines the turmoil within the “Yacht Party” – the state Republican Party is mired in debt and facing deepening internal divisions. As Carla Marinucci explains:

The troubles of the GOP in the nation’s most populous state – which backers of Sen. John McCain insist could be competitive in the fall presidential election – come at a crucial time. The California party convention is Feb. 22 in San Francisco, and conservatives and moderates will debate the platform and whether independent voters should be allowed to cast ballots in state GOP primaries.

But the most urgent concern for many Republicans is the appalling financial condition of the state party, which is now overdue on repaying a $3 million loan provided in 2005 by Larry Dodge, chief executive of the American Stirling Co.

The surest sign of a party that is deeply divided is when blame gets passed around, instead of folks stepping up to take responsibility (although one wonders when the last time the Yacht Party ever demonstrated responsibility to the state’s voters, finances, and basic rights). Sure enough, we have Jon Fleischmann, who runs some website whose name I forget, explaining that it’s all Arnold’s fault:

“The understanding of the California Republican Party was that the loan would be repaid today – and if it isn’t, that’s concerning,” Jon Fleischman, vice chair of the Southern California GOP, told The Chronicle on Friday.

“The governor made a commitment to resolve the debt. It was incurred re-electing him – and he stood before our convention and said he would take care of resolving it,” Fleischman said. “If we’re still dealing with the debt from Gov. Schwarzenegger’s last campaign, it makes it difficult for us to move forward on the McCain campaign.”

Naturally, Arnold’s people deny responsibility for this debt (as they have with the state’s budget deficit):

But an adviser to Schwarzenegger, Adam Mendelsohn, said the governor is not responsible for settling the loan.

“This is an issue between the California Republican Party and Larry Dodge in terms of finalizing and resolving the debt,” he said….

Sources inside the party said Schwarzenegger negotiated successfully with Dodge months ago to forgive the state party’s debt, and Dodge indicated he would be willing to make substantial additional contributions – if changes were made to party operations.

Among those changes being considered is whether or not to let DTS voters cast a ballot in Republican primaries. As we saw on February 5, DTS voters packed the polls in enormous numbers to cast a ballot in the Democratic primary, and many of those voters will vote for the Democrat again in November. Republicans might have a chance at peeling off some of those voters if their primaries were open, and while the PR effect of their closed primary is negative, most Republicans seem happy with it anyway:

But Spence said conservatives believe otherwise – and will make their views known at next week’s convention.

“I think California Republicans support having Republicans choose Republican nominees,” he said. “There’s been no evidence that allowing (independents) to vote in the primaries has benefited us in a general election.”

Since conservatives captured the California Republican Assembly in the early 1960s as part of their long march through the institutions, they have seen the state party as their exclusive vehicle. Ideological purity is what they prize, and most conservatives remain convinced – against all available evidence – that Californians will come around to their way of thinking.

Whatever the reasons behind this inner turmoil – ideological differences, personal pique, money matters – what’s most important for us is that this gives Democrats perhaps the best opportunity in decades to grab seats from the Yacht Party in the legislature. Earlier this week Fabian Núñez spoke of three seats they were targeting – AD-15, AD-78, and AD-80.

If anything this is probably not ambitious enough. As we saw in 2006, most of the House races Democrats won were not on the establishment radar at this point in the cycle – including CA-11. Dean’s 50-state strategy helped Dems take advantage of the wave that year. Here in California we need a 58-county, 120-district strategy.

A broke and divided Republican Party, forced to defend yacht owners and the screwing of sick children and students, is a sign that Democrats need to take the offensive. Back the Republicans up against a wall, and take advantage of what is going to be a massive Democratic turnout in the November elections to make a bid for 2/3. It’s time for CA Democrats to be bold for a change.

The “emergency cuts” discussed here yesterday are expected to pass both chambers of the legislature today and go to Arnold for an expected signature. Education, public transit, and health care face the bulk of the cuts, but most of the plan involves “creative accounting” to defer certain expenditures to the 2008-09 budget year, stabilizing the state’s cash flow for the remainder of the 2007-08 year.

That leaves the big fight – the “big kahuna” as Fabian Núñez called it – for the 2008-09 budget. Unfortunately, Núñez is already trying to prepare Californians for acceptance of the Republican frame on the budget, that it must be closed through cuts. As quoted in the Bee article linked above:

“This is just the icing on the cake,” said Núñez before the committee vote Thursday. “What’s coming in the budget year are devastating cuts.”

Núñez has spoken of a 50-50 split between new taxes and cuts to close the budget, but these are  not necessary. In fact, no cuts are necessary. The California Tax Reform Association has identified $17 billion in potential new revenues that would help ease our budget crisis, without firing a single teacher, denying health care to a single child, or closing a single state park. When I mentioned to Steve Maviglio that the yacht tax loophole closure wasn’t a big deal he claimed that the 2/3 rule blocked more useful tax measures.

But what he hasn’t considered is that 2/3 can still be achieved, even for tax hikes, even when you need Republican votes to get it. You have to force the Republicans to vote for it. Back them up against a wall, with a massive public campaign. Already teachers are mobilizing public campaigns to fight the cuts, and over the next few weeks, a coordinated campaign could push the Republicans into a corner where they either have to insist on unpopular cuts and thereby risk their seats in the November election, or go along with a mostly-taxes budget solution.

How do we know this would work? It’s what Republicans do to Democrats all the time in Sacramento and DC.

When Núñez says instead we should prepare for “devastating cuts,” he is kneecapping these efforts to provide public unity and to educate the public as to why our revenue shortfall has led California to economic crisis. No Democrat should EVER be telling the public we might need budget cuts, certainly not at the outset of what will be a long fight. What is needed most is unity and mobilization, and the only way you accomplish that, as Dave Johnson agrees, standing together and articulating progressive solutions – not parroting right-wing spin.

As I’ve argued before, Arnold is trying to “shock doctrine” us on the budget – create a crisis that is actually the vehicle for pushing through radical changes we would otherwise never accept. As Naomi Klein as well as the WGA have pointed out the only way to resist the shock doctrine is to stop speaking in a language of crisis, start speaking instead in a language of unity and determination to build a better future, and to actually remain united in the face of those trying to divide you.

It’s time that Sacramento Democrats understood this. They have a golden opportunity to both reverse 30 years of decline and to benefit at the ballot box by doing so. But if they insist on accepting the Republican frame that spending cuts  must be the primary method to close the deficit, they’ll accomplish neither.

Back in November I wrote about Santa Cruz County’s “wrong way” proposal to pass a tax measure to spend $600 million on widening the Highway 1 freeway but would have delivered virtually nothing for local passenger rail, despite the fact that the infrastructure to provide rail already exists.

Happily, wiser heads appear to have prevailed. The county’s Regional Transportation Commission voted to kill the plan yesterday, meaning it won’t go to the ballot in November as originally intended. Erosion of public support was cited as the reason for the decision. The county’s Business Council withdrew its support and, more importantly, its promise to fund the plan’s campaign; bicycle and transit supporters objected to the inadequate rail funding; the Sierra Club criticized the road’s effect on climate change; and local Republicans demanded that the freeway widening alone be funded.

I predicted that the plan would have failed at the ballot box, and I’m not surprised that it didn’t even make it that far. The tide is beginning to turn against using freeways to solve our transportation problems. Last November Seattle voters rejected a plan that would have added 160 miles of new freeway lanes, even though they have some of the nation’s worst traffic (outside of California, of course). And this week the Coastal Commission rejected a toll road through San Onofre State Beach, rightly choosing to protect the environment over continuing our outdated reliance on highway transportation.

Awareness is growing that climate change means we need to move away from global warming emissions that highway projects produce. Combined with peak oil and high gas prices, Californians are beginning to realize that alternatives are necessary for a 21st century transportation system – Amtrak California continues to set ridership records every month.

By refusing to waste precious tax dollars on freeway lanes, Santa Cruz County has taken the first step toward solving its transportation issues in a sustainable and responsible way. This gives county leaders and activists time to educate the public about the need for passenger rail, and come back to voters in a few years with a plan that will actually provide for the county’s needs, instead of foolishly trying to pretend that the methods of the 20th century can continue.

Hopefully we in Monterey County will follow Santa Cruz’ lead – transportation officials here are proposing a similar roads-focused tax plan, having stripped $90 million to bring Caltrain to Salinas. Public hearings are going on next week, so if you’re in Monterey County, speak out in favor of sustainable transportation, and against sticking our heads in the sand on climate change and peak oil!

The hearing lasted over 12 hours, and was apparently one of the most raucous and boisterous Coastal Commission meetings in some time. Gathered at the Del Mar Fairgrounds to handle the overflow crowds, the Coastal Commission finally voted last night to reject the planned toll road through San Onofre State Park:

Before a boisterous crowd of more than 3,500 people, commissioners decided 8 to 2 that the proposed Foothill South project violates the California Coastal Act, which is designed to regulate development along the state’s 1,100-mile shoreline. They reached the conclusion following hours of sometimes heated public testimony that pitted protecting the environment against the need to relieve traffic congestion in south Orange County.

The decision was a major setback for the Transportation Corridor Agencies, which has spent years and tens of millions of dollars preparing to construct the 16-mile tollway as an alternative to Interstate 5.

“This project looks like something from the 1950s,” said Commissioner Sara Wan of San Francisco, who voted against the tollway. “Putting a massive project in an environmentally sensitive area, it is inconceivable.”

The Transportation Corridor Agency that runs OC’s toll roads is considering appealing to the US Secretary of Commerce, which owns the land San Onofre State Beach is leased from. Susan Davis successfully attached an amendment to a recent military spending bill to prevent the toll road from being built on federal land, and Bush signed that bill with the amendment intact last month.

The coalition opposing the destructive project was impressive in its size and scope. It included environmental groups from across California, and city governments from the San Diego coast. Surfers were also active and engaged, with help from major surf and skate companies like Etnies and Vans. Obviously the lion’s share of credit goes to the Surfrider Foundation, which has been exhorting people to stop the toll road and “Save Trestles” ever since I was in high school in Orange County over ten years ago. There were finally some Juaneño Indians there to speak up on behalf of an ancestral village and burial ground that would be paved over by the road.

People-powered coalitions don’t just exist in elections – they’re all over our state, and the victory over the 241 toll road is a major victory for just that kind of organizing power. It’s also a key victory for the Coastal Act and a “defining moment” for the commission, one of its members said.

It’s also good to see that the Coastal Commission understands just how much things have changed in this state. No longer can we look to new roads to solve our transportation problems. For environmental, sustainable, climate, and even fiscal reasons, mass transit, particularly rail, is where we need to be investing for our future – not a toll road that will struggle to stay financially viable and see steadily decreasing traffic as peak oil sets in.

More importantly, this victory shows that a people-powered coalition can organize from a very broad base to articulate a 21st century vision of transportation and land use.

As Brian noted below, the propositions are pretty much a done deal. 92 lost (though by a much closer margin than earlier in the night, suggesting Obama supporters went for 92), as did 93. The Indian gaming compacts all won by healthy margins.

The common factor that explains all six outcomes is the state budget deficit. It now looms over state politics like nothing else. Sure, there were reasons specific to each measure that influenced the outcome, but looked at as a whole, voters appear to have seen these ballot measures through the lens of the state’s dire fiscal situation.

Prop 92, which was seen by some as squeezing the budget to help community colleges, failed. Props 94-97, which the barrage of ads claimed (questionably) would raise $4 billion for the state, passed. And Prop 93, which would have reformed term limits and given current legislators more time in office, failed – voters seem to have held them responsible for the budget crisis.

The lesson here is that it is long past time for state legislators to help craft a permanent budget solution. A 30-year succession of one-time and short-term fixes haven’t gotten us any closer to a stable budget, or to fixing the structural revenue shortage. As a result, community colleges are now facing budget cuts without any protections, four of the state’s largest casinos now can operate without strong unionization rules, and 120 legislators are looking at an early end to their terms in office.

Add to that toll the Núñez-Schwarzenegger health care plan (which I opposed, but was still primarily a victim of the budget crisis) and the possibility of future programs getting axed, like the high speed rail bonds on the November ballot, and it should now be clear that the state budget crisis isn’t just a fiscal problem but a major political obstacle.

Term limit reform will be back. We likely haven’t seen the last battle over Indian gaming and labor rights. Public education at all levels is still hurting and growing less accessible. The health care crisis continues, and we badly need 21st century, sustainable transportation solutions. But until the state budget crisis gets a permanent solution, it’s going to be very difficult to move forward on any of that.

That is where our focus must now turn.