All posts by Brian Leubitz

May Revise: Brown Thinks Long-Term

In his May revise, the big headline was the estimated $6.6 billion in additional revenue that came in or will come in.  That is, no matter how you look at it, a good thing.  However, with a big group of taxes set to expire at the end of June, we are still miles away from a sustainable budget.  But rather than playing the old Arnold game (no, not that game) of gimmicks and hoping things turn out well, Gov. Brown is looking to set the state up for something it hasn’t seen for a while: stability.

Brown acknowledged that an improving economy and the good fortune of some of the state’s wealthiest residents will likely mean a surge of about $6.6 billion in unexpected tax revenues this year and next. But he said that is not enough to dig the state out of its hole.

Even with that money, he said, the state still has a $10 billion “structural deficit” – a permanent gap between revenues coming in and spending required by current law.

Brown said he wants to use some of the revenue surge to make up for the delay in reenacting the income tax increase. About $1.6 billion of the new money will go to kindergarten-through-community college education. And about $1 billion will go to erase the need to shift that amount from a special tobacco tax fund that pays for children’s services in counties across the state. (HealthyCal)

The budget also provides for a delay on the income tax rate extensions until next year, but, if he can get the votes, would immediately extend the sales taxes.  I certainly understand the math there, as the sales taxes are pretty much mandatory to retain in the system.  And Jerry wants to make the taxes a little less painful in the short term.  However, one has to wonder if the delay is really the best use of resources.  On policy terms, probably not, but politically it may be a requirement.

The one thing that we hear on taxes when we are on this side (ie the not so great side) of the economy, is that we can’t afford to tax the economy now.  Of course, when we’re going good, we can’t afford to break momentum.  Amazing how that works.  Nonetheless, as we see with this tax revenue surge, we are really making progress in the state, and we really can’t afford NOT to extend the rates and ensure that we have a consistent level of services for the state.

Gov. Brown also included full funding to Prop 98 levels if he gets his tax extensions, which is a step in the right direction.

Now if we can just get those extensions to make the May Revise a little more real.

We Still Need The Tax Extensions

With the additional tax revenue coming in, the Republicans are already calling the tax extensions unnecessary.  However, the numbers just aren’t anywhere near that point yet, and Gov. Brown has no plans on dropping his pursuit of that revenue:

Having failed to win enough Republican votes to put the taxes on the ballot in June, the governor is expected to ask lawmakers to impose at least some of the levies first and seek Californians’ blessing after the fact, said officials with knowledge of Brown’s plan.

The governor faces rough seas in his quest for billions of dollars in additional income, sales and vehicle taxes.

GOP lawmakers’ resolve to block both a legislative vote for the taxes and a public referendum has intensified with recent news that state revenue is outpacing projections. The uptick could continue, they say, erasing billions from a $15-billion deficit.(LA Times)

Now, realistically, the best option at this point is to try to get the votes and just pass the taxes.  Getting those four GOP votes, however isn’t exactly a walk in the park.  So, we’ll get some sort of vote if we are ever able to get the taxes through.  Of course, at the same time, it is clear that Democratic super majorities are really the only way to create sustainable governance.  And hey, it might be possible.

I have a really hard time believing that this game of chicken will really end with the corporate powers really letting their GOP puppets decimate California’s infrastructure and educational systems, putting aside our other moral imperatives.  That being said, this is a high-stakes game of chicken, with more than a few parallels to the debt ceiling crisis in DC.  It will get resolved, but meanwhile we are on the tracks with a freight train heading right for us.

And So It Goes: 70 State Parks Closed

Well, this was telegraphed for a while, with the Governor hedging on the parks system.  But today we get the news that the state parks system is closing down 70 state parks.

State parks officials today announced the closure of 70 parks because of the state budget deficit, including the governor’s mansion and the Stanford mansion in Sacramento.

Gov. Jerry Brown’s January budget plan proposed reducing the state parks budget by $22 million. The Legislature in March approved $11 million in cuts to state parks and $10 million in cuts to off highway vehicle parks in the next fiscal year, with $22 million in cuts to state parks in future years.(SacBee)

The state parks system attempted to cut judiciously, and claim that they will retain 92% of visitors and 94% of revenues.  And that’s all well and good, but what does it say about our state that we can’t even afford our state parks?  Do we look like a state that will offer the next generation a better future as we are cutting our parks and slashing education funding?

Over the flip you’ll find the list of state park closures.

Anderson Marsh SHP

Annadel SP

Antelope Valley Indian Museum

Austin Creek SRA

Bale Grist Mill SHP

Benbow Lake SRA

Benicia Capitol SHP

Benicia SRA

Bidwell Mansion SHP

Bothe-Napa Valley SP

Brannan Island SRA

California Mining & Mineral Museum

Candlestick Point SRA

Castle Crags SP

Castle Rock SP

China Camp SP

Colusa-Sacramento River SRA

Del Norte Coast Redwoods SP

Fort Humboldt SHP

Fort Tejon SHP

Garrapata SP

George J. Hatfield SRA

Governor’s Mansion SHP

Gray Whale Cove SB

Greenwood SB

Grizzly Creek Redwoods SP

Hendy Woods SP

Henry W. Coe SP

Jack London SHP

Jug Handle SNR

Leland Stanford Mansion SHP

Limekiln SP

Los Encinos SHP

Malakoff Diggins SHP

Manchester SP

McConnell SRA

McGrath SB

Mono Lake Tufa SNR

Morro Strand SB

Moss Landing SB

Olompali SHP

Palomar Mountain SP

Petaluma Adobe SHP

Picacho SRA

Pio Pico SHP

Plumas-Eureka SP

Point Cabrillo Light Station

Portola Redwoods SP

Providence Mountains SRA

Railtown 1897 SHP

Russian Gulch SP

Saddleback Butte SP

Salton Sea SRA

Samuel P. Taylor SP

San Pasqual Battlefield SHP

Santa Cruz Mission SHP

Santa Susana Pass SHP

Shasta SHP

South Yuba River SP

Standish-Hickey SRA

Sugarloaf Ridge SP

Tomales Bay SP

Tule Elk SNR

Turlock Lake SRA

Twin Lakes SB

Weaverville Joss House SHP

Westport-Union Landing SB

William B. Ide Adobe SHP

Woodson Bridge SRA

Zmudowski SB

Blueprints For A Shock Doctrine: Ransom 2.0

Robert’s been the shock doctrine expert around here, but I can spot a well-considered plan when I see it.  The basic principle behind how to get a shock doctrine done, and move the state away from providing services, is to create some sort of emergency, say that we have to do X and Y, or else.  Our current situation certainly gives us the “or else” component of that.  In truth, much of the shocking was already completed, mostly by majority votes by the Democratic members of the Legislature and our Democratic governor.

But all that majority stuff is short-term, and can be reversed.  When you play for keeps, you have to think long-term strategy.  But you can’t just come out and say that we are hoping to shock the system. No, you have to create a “coalition” that wants to “bridge the divide” between the parties.  It would probably be headed up by some business organizations, and they might even call for tax increases.  Of course, there’s always a catch…

A business coalition pushed Wednesday for a grand state budget compromise that essentially merges Gov. Jerry Brown’s budget and GOP demands for long-term pension and spending controls.

The group of 12 — which dubs itself the Coalition for a California Financial Workout Plan — said voters should be allowed to decide on tax extensions as well as permanent fixes that address the “underlying conditions that got California in trouble.”

Members include the Silicon Valley Leadership Group, Los Angeles Chamber of Commerce, Bay Area Council and Sacramento Metro Chamber.

The coalition outlined a “Five-Point Plan” that includes tax extensions, a long-term spending control, reductions to public employee pensions, changes in the California Environmental Quality Act and a shift of responsibilities to local governments. The group also suggested that state leaders address abuses in redevelopment agencies and enterprise zones without eliminating them.

“We urge the Governor and the Legislature to respect voters and taxpayers by giving us an honest budget plan by June 15th, along with a structural reform plan that puts California back on the right track,” the letter concludes. “That’s a workout plan we are willing to support in the ballot booth.”(SacBee)

See now, isn’t that convenient.  The business groups get pretty much everything they want, most of which were the strings the Republicans had been dangling.  And in reality, they didn’t want to see the end of the taxes, because that would hit them pretty hard as well.  So, huzzah for business groups.

But not so huzzah for the rest of us.  Rather than addressing each of these issues independently, we have to slam them all together when the Republicans have leverage.  It’s just a repackaged ransom note, but this time there’s a nice bow on top in the form of the seal of approval of some business organizations.  But let’s take a look at this Ransom 2.0:

  1. Spending Control – Spending control is poor planning in disguise.  While our spending has increased by a few percentage points over the last 30+ years, we are still looking at spending a lower rate of GDP in California than we’ve done for a generation.  Here’s the thing about spending, as we develop, and as we improve, we should be providing better services.  We shouldn’t simply settle for what worked last year.  Twenty years ago, we didn’t need a bunch of computers in every classroom. Now we do. I’m not calling on us to spend every penny we get, I think a rainy day reserve fund is a terrific idea (check out SF’s!).  But you achieve budget stability through long-term planning and stability, where the people and their representatives (not a super minority) can reasonably plan for the future.  And hopefully we can provide better schooling and park services for Californians every year.  We’re Californians, We’re Americans, we shouldn’t just settle for standing still.  If you wanted real reform, you’d call for true majority government.  Heck, maybe even demand a 5 year budget outline with some specificity, but a hard cap is simply DOA.
  2. Pensions – Gov. Brown has already proposed a pretty robust pension reform plan.  And while the discussion can be tough, that’s a good starting point.  Let’s have the discussion, and work something out.  But let’s do it the right way, not through some rushed budget process.
  3. CEQA – Again, let’s have that conversation, but that isn’t the budget, and shouldn’t muddle budget negotiations.  CEQA has served us well in the past, but perhaps we want to tweak it here or there.  But we must avoid throwing out the baby, as well as dirtying up the budget bathwater.
  4. Realignment – Well, um, this is pretty much what the Governor has been proposing all along.
  5. Redevelopment and Enterprise Zones – It’s pretty convenient how this comes back up again in the context of a business coalition.  After all, while there are some very good redevelopment projects, it’s hard to get boondoggle funds without the redevelopment agencies.  There might be new ways, but the agencies are just so, umm, there.  Now, it’s probably a bit unfortunate that we are killing them entirely.  But, really, something has to go, right? Right?

So, what have we got here? Well, not a whole lot new, just another brick along the road…

All Avenues

PhotobucketBeyond the tragic news of Arnold and Maria’s possible breakup, there was a bunch of actual news here in the state.  Robert mentioned the CTA protests in Sacramento yesterday, but those weren’t the only ones.  Teachers (and others) have been activating across the state.  Beyond the scene in Sacramento, where a big group of protesters were arrested by CHP, the anger trickled down to specific local politicians.

Dozens of teachers marched outside state Sen. Tony Strickland’s Simi Valley office Monday, saying their students deserve a better future.

Deep state cuts in recent years have prompted local school districts to cut hundreds of positions, increase class sizes and shorten the school year.

“We’ve cut counseling and increased class sizes. We’ve reduced summer school and library hours. Our students are receiving less instruction and less support,” said Colleen Briner-Schmidt, president of the Unified Association of Conejo Teachers. “Our students deserve a better future.”(Ventura County Star)

And in Orange County:

Nearly 300 educators, parents, students and rallied on Monday outside the Orange County offices of state Assemblyman Chris Norby, R-Fullerton to support proposed tax extensions they said will prevent billions in cuts to public schools.

Clad in red and black, the demonstrators held signs reading “Save our schools,” “Stand up for schools – support tax extensions” and “Budget cuts to schools are killing the American dream” as motorists passing along Harbor Boulevard honked horns to show their support.(OC Register)

This is by no mean sufficient to change the tide in the state.  We still need a lot of work before we can really change the narrative in the state.  But this is how we do it.  Go to the offices of these intransigent legislators and let them know what these cuts are doing to the state.  And more importantly, mostly because many of these legislators hear lobbyists dollars far louder than their constituents, make sure that the story is picked up by the media.

And the California Teachers Association and their allies are doing a pretty good job at getting the attention of the media.  Whether the state is listening is a better question.  However, given the nature of this problem, we need to be using every possible avenue.  Big protests like this, and small conversations with your neighbors.

This budget is simply not going to resolve itself, no matter how much wishful thinking we engage in.

Dream Act Clears First Vote Hurdle

If you’ve been to any of the California Democratic Party conventions recently, or if you’ve otherwise had the chance to speak to some of the students that happen to be undocumented, you’ll know how important the Dream Act is.  And so, yesterday, when it passed its first major hurdle along the road to the Governor’s desk, there was reason to smile:

Illegal immigrants could receive college financial aid under legislation approved Thursday by the Assembly and apparently destined for the desk of a new Democratic governor who supports the concept. …

AB 130, among other things, would allow a small segment of illegal immigrants – those who currently qualify for in-state college tuition – to apply for aid from private gifts or endowments that totaled more than $72 million last year.

Assemblyman Gil Cedillo proposed both AB 130 and a pending companion measure – AB 131 – that would open the financial door wider by allowing those illegal immigrants to seek Cal Grants and other public aid.(SacBee)

The governor has said in the past that he supports the concept of the California Dream Act, but hasn’t committed to the specifics of these measures.  However, considering that the first of these bills, AB 130, doesn’t even touch public money, it seems to be a no-brainer.  CalGrants might be a different matter, but only time (or Jerry) will tell on that one.

These students, who were brought here when they were young, and then succeeded in schools, are what this country should be about.  It is about people coming to America to work hard to build our economy.  We shouldn’t just be kicking these students out of our country, we should be helping them stay here.  The California Dream Act is a good first start on that.

Up $2 Billion in Tax Revenues

As April was closing, we noted the big surge in tax revenues as people got their taxes in on the last few days.  Now it seems that we are even doing better than we expected then:

State officials are reporting an unexpected $2-billion surge in tax receipts that will help lawmakers close the remaining $15-billion budget deficit, and the Capitol is humming with hope that more is coming. …

Some analysts say the surprise – the sign of a brightening economy – could be just the beginning. Revenue has crept up incrementally for months and jumped in April, when people paid their taxes. It may be time to raise projections, they say, with the potential for billions more to flow into state coffers.

“As much as a third of the deficit will probably, hopefully, disappear,” said Brad Williams, an economist and former chief revenue forecaster for the Legislature.(LA Times)

Of course, in California nothing is easy.  This increased revenue has come at a time when the Governor is attempting to find some way, any way, to extend the taxes from two years ago.  It’s a great thing, of course, but it sure does make the people who don’t want to really address the structural imbalance want to wait it out.

But in the end, we won’t close this deficit with mere hopes and prayers.  It is going to shrink, perhaps to as low as $10 billion or so, but it isn’t going to close on its own.  And the next $10 Billion of cuts won’t come easy.  That these increased revenues come with the higher tax rates should be a sign that extending them won’t kill the economy, but those facts are fairly unlikely to sway any of the Republicans.  You see, no matter what evidence of economic realities that you give them, they all point to one thing: lower taxes.  Economy is going strong? Lower the taxes! Budget deficit? Lower the taxes! California is burning? Lower the taxes!

The tax extensions aren’t what I would choose for sound policy, but they the best shot.  Now if we could just get the 2 Republican votes in the Legislature, we could get back to trying to rebuild the California Dream.

CCPOA’s hurt feelings

The race between Anthony Cannella (R) and Anna Caballero(D) was one of the closer races last year.  Ideally, Democrats would have taken that seat, which runs from Salinas near the coast to a big swath of the Central Vally, and been a bit closer to the 2/3 vote in the Senate.  However, a bunch of IEs made the difference in that race, ultimately giving Cannella the 3 point victory.  The interesting one was from CCPOA, who dumped a big pile of cash against Caballero a few weeks before the election.

From a story back in October of last year:

The CCPOA’s independent expenditure for a “media buy” to oppose Caballero was reported today. The race has attracted nearly $1.75 million in independent expenditures, including nearly $1 million from business-backed groups on behalf of Cannella and about $400,000 from organized labor for Caballero.(SacBee)

So, CCPOA ended up putting a few slices in their nose to spite that mischievous face.  And you know what happens when you do that? Well, the ungrateful nose always gets its revenge.

The contracts were the subject of a pretty tense debate and seemed all but dead, until a late afternoon switch by Sen. Anthony Cannella (R-Ceres) sent them to the Assembly for consideration.

While the legislation, SB 151, contains the new contracts for six bargaining units and modifications of contracts for others, the marquee deal was a new contract for members of the California Correctional Peace Officers Association.

Cannella was the final vote, and didn’t go easily, that ungrateful bastard.  The funny part of these contracts, of course, is that they are virtually the same as contracts passed last year.  But you know, that was Schwarzenegger, or something.  This is the season for grandstanding, so especially when labor contracts are involved, there must be Republican grandstanding.  Heaven forbid Republicans agree with a union!

But CCPOA plays both sides of the aisle, and sometimes you get burned on that.  But with CCPOA, and their game playing on sentencing reform (we’re for it, we’re against it, give us more money!).  It is hard to really keep track of what they are doing, and occasionally how you feel about the organization.  

Don’t cry for CCPOA, I’m sure they’ll recover from their hurt feelings over Cannella.

 

Peter Schrag: Cuts In Red Districts Could Make Sense

Last week, Treasurer Lockyer and Senate President Pro Tem Steinberg each called for targeted cuts in Republican districts.  They were both non-specific, but the clear target was to both shake the trees for a few Republican votes and to make voters in the district hold their leaders accountable.  The generality of the threat made it political rather than policy.

But that’s not Peter Schrag’s style.  Schrag, the longtime columnist for the Sacramento Bee and author of several books on California governance, knows his policy.  So, rather than just saying cutting in red districts, he has some ideas with specifics.

The obvious first question: are these serious ideas or just threats? And to what extent could the legislature’s Democratic majority do it even if they wanted to? But in some instances, targeting Republican districts might be good policy even if it’s not unequivocally good politics.

The most obvious example is the state’s costly class-size reduction program (CSR). Ever since Gov. Pete Wilson, in a blatantly political maneuver intended to punish the teacher unions, arm-twisted the legislature into the hasty adoption of CSR in grades K-3 some fifteen years ago, there have been serious doubts about its effectiveness. … Nonetheless, despite the program’s erosion under the budget pressures of the past couple of years, it still costs the state over a billion dollars a year. CSR probably shouldn’t be abandoned, but it should be focused on the low income students and English learners who most need the additional attention and who, according to most research, are the most likely to benefit.

That change of focus would hit affluent Republican districts harder than those represented by Democrats, but it would almost certainly be the more effective use of resources that conservatives always demand. (CPR)

Another idea he has is to reform sentencing, particularly 3 strikes to reduce the size of the “Central Valley prison archipelago.”  This one, in terms of sound policy, is really a no-brainer.  Politics, well, that’s another story.  Unlike CSR, there should be no serious argument about this on pure policy perspective.  Undeniably we are warehousing prisoners that should not be in the system.

In the end, as Schrag points out, this might score a few points, and save a few billion.  However, we can’t balance the budget that way.  We need revenues, no matter how you slice or dice the problem.

As the California Democratic Party Convention Begins, What of the Death Penalty?

Well, the California Democratic Party Convention is set to begin in a few hours, and I am just shoving the last of my items into my bag as I get ready to head to Sacramento.  For the most part, the convention will be fairly unified.  Democrats are thankful for their electoral success in 2010’s elections, but what issues might arise?  Well, there’s always the budget, but there is one other issue rearing its head as we head into it.

A new David Binder Research poll is showing that a strong majority of voters now supports converting all of our death penalty sentences to life without the possibility of parole (LWOP):

A recent statewide survey of 800 high propensity voters conducted by David Binder Research showed a strong  63% support for converting all current death row sentences to life imprisonment without any possibility of parole  in order to save the state $1 billion dollars in five years, where the money saved would be required to pay for  public education and law enforcement. Notably, support for this idea to convert all of the death row sentences to save the state a billion dollars over five years receives support from all political parties and from across all regions of the state. This idea appears to be the type of solution voters are looking for politicians to develop, but this idea in particular is one that political figures have so far overlooked.  

This is likely to come up throughout the convention, but not likely from the podium.  However, grassroots support for a signal of agreement with this poll has been bouncing around over the last few days and weeks. I’m interested to see where the question goes from here.

I’ll be focusing much of my communications on Twitter, check my Twitter feed here.

UPDATE: On a somewhat related note, Governor Brown is actually letting the parole board do its job rather than what Govs. Davis and Schwarzenegger did by blocking pretty much every parole.  We can’t really begin to address the prison mess without prioritizing for dangers criminals.