Category Archives: Jerry Brown

Do or Don’t Get Paid: Budget Deadline Looms As GOP Stays Loyal to their Owners

Yesterday we had the reports of an impending gimmicky budget, but today we get a few more details:

Here’s some of what’s on the table without a bipartisan budget deal:

• Raising the state sales tax by one-quarter cent.

• Raising vehicle registration fees by $12 a vehicle.

• Adopting the so-called “Amazon” tax requiring online retailers to collect sales taxes.

• Adopting firefighting fee for rural homeowners.

• Cutting the budgets for the University of California and California State University systems by another $150 million each.(SacBee)

Now, some of these items aren’t entirely bad.  In fact, I’ve written a couple  of times in support of some of these measures, the Amazon tax fairness thing especially.  However, each of these items should get a full hearing on its own merits, not a rushed process shoved into the budget fight.  And of course, the additional cuts to UC and CSU continue to mock the long-dead dream of a California Master Plan for higher education.  Sorry Pat Brown!

But, really, this is  what we get with a bloc of legislators that won’t do anything other than complain about taxation.  The fight today is really something of a bizarro world.  It is like the 80’s Me-firsters decided that they were totally not down with helping anybody else.  And they wanted all of their own damn money.  And along the way they helped the super-rich game the system.  As Robert Reich describes in the video, the top 1% of earners take home 20% of the nation’s income, twice what they did in 1980.  Yet at the same time, they pay lower taxes than ever before, as the capital gains cuts have lowered their taxation down to the mid-teens.  Meanwhile, as a nation we are only at 15% of income coming through to taxation nationwide.  This is an astonishingly low figure considering our many military endeavors. In fact, it is the lowest rate in over 60 years.

Today we’ll get some sort of Frankenstein budget, but Brown will keep pressing in his Sisyphean task of getting some additional revenue into the system.  At this point, I’m really past the point of surprise, all news is old news in Sacramento.  In the end, it is hard to put this in anything but a class struggle construct.  The rich are dominating governments the world over as they seek to increase their share.  We can’t even protect our food supply anymore, and yet the rich still want tax cuts?

Amazing isn’t it?

Out Come the Gimmicks

With the Republicans continuing their obstinacy, Democrats in the Legislature are looking for some way, any way, to make sure they don’t lose their pay after tomorrow’s Constitutional deadline.

The alternative plan would keep paychecks coming even though talks between Gov. Jerry Brown and Republicans have snagged on the issue of taxes.

“We will have a budget,” said Nathan Barankin, a spokesman for Senate President Pro Tem Darrell Steinberg (D-Sacramento).

Barankin and others close to the process declined to provide details. But a fallback blueprint would almost certainly rely on accounting moves and other measures that would merely paper over the state’s remaining $10-billion shortfall: Democrats, who have sharply cut back many programs already, have little appetite for further reductions.

Barankin acknowledged that any plan written without a renewal of some tax increases or more drastic cuts would not fully restore the state’s financial health.

“There’s no way to solve our long-term fiscal problems without taxes],” Barankin said, and “Republicans are simply unwilling or incapable of supporting a budget that includes [more] revenue.” ([LA Times)

The Governor has already walked back from his hard-line “No Gimmicks” stance from the election.  Certainly that would appear to be what he wants, but he is trying to make some accommodation to get something, anything passed.  Most likely, some of that will be borrowing and a bunch of accounting tricks.

They have about 36 hours to pass something, who knows what we’ll get.

Brown Gives State a Status Update

In January, Gov. Brown released a video highlighting his plan for the budget.  You know all about that, and the video update to the right alludes to that plan.  Tax extensions on the ballot and big cuts.  That’s the long and short of it.  The big cuts were made, but there has been no extensions, by vote or any other manner.  And those taxes expire in 17 days from today at the end of the month.

So, today Gov. Brown gives the people a status update on where he is in that process, and, again, we know where it is.  We are still waiting on 2 GOP votes in either house to materialize for either a vote or the actual tax extensions.  At this point, Brown has made major moves on ancillary (at best) issues, but still can’t lure the votes across.

Punishment for defying orthodoxy in California’s GOP is extreme and swift.  There will be major challenges, especially with so many of the sitting legislators drawn together for 2012.  This is the sort of the thing Republican primaries are made of.  Whether a Republican candidate who votes for some sort of extensions can make it through into the Top 2 system is yet to be seen.  And frankly, they aren’t particularly keen to be the guinea pigs.

But somebody is going to be the guinea pig. Taking that step past the brink is never easy, but that’s why it is called leadership.  If it were easy, we could just have some action movie star like Arnold… wait… we’ve tried that already…

And It’s Down to This

Well, at least with Jerry Brown, as opposed to Arnold, on occasion you get a glimpse into what the hell is going on.  And on this occasion, we know what the hell is going on, the Republicans do not want the temporary extensions until a fall election can decide the fate of the rest of the tax extensions.

Gov. Jerry Brown and Republican legislators said Tuesday they are in a budget standoff over whether to extend higher sales and vehicle taxes until a mid-September election.

Without legislative action, the state sales tax is slated to decline by one percentage point and the vehicle license fee by half a percentage point on July 1. Brown wants to forestall those reductions until voters can decide in a fall special election whether to keep higher rates for as many as five years.

“That’s the big sticking point,” Brown said Tuesday in a phone interview.

The Democratic governor and GOP lawmakers said they were close to compromises over a spending cap, pension cuts and environmental regulation changes. Republicans agreed that the tax bridge to the election remains the fundamental divide.(SacBee)

Because all those other things are related to the budget, they got tossed in first? I suppose a more simple explanation is that Brown yielded a bunch of ground to get to the September vote, which now seems reasonably assured, and then just couldn’t give up on the so-called tax bridge.

We have basically until Monday before the Assembly and Senate leaders are going to be demanding some sort of vote.  Whether the handful of votes are there for a tax bridge will likely remain in doubt until that point.  However, given the situation now being that there are, according to Senate GOP leaders, no votes for it, its future remains very iffy.  Of course, we could hope that a few Republicans take a gamble on the shifting political landscape and vote for the bridge, but that will involve a lot of back room dealing with what one can only imagine is a lot of very tough questions of how much the Democratic caucus leaders are going to challenge some of these new Republican leaning (but not guaranteed) seats.

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.

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.

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.

Brown Cuts New Death Row Facility at San Quentin, Where Next?

With all of the cuts that Governor Brown has been making, at least he found one that isn’t totally objectionable.  He just announced that he’ll be (insert bad pun here…killing, pulling the plug, …) the new death row facility that Arnold had wanted to build:

Gov. Jerry Brown pulled the plug today on plans to construct a new housing facility for condemned inmates at San Quentin.

Brown said in a statement that he believes it would “be unconscionable to earmark $356 million for a new and improved death row while making severe cuts to education and programs that serve the most vulnerable among us.” (SacBee)

Given our lack of actually putting anybody to death since the beginning of Gray Davis’ administration, this probably makes a fair bit of fiscal sense.  Of course, so would just ending the charade of a death penalty entirely, but that doesn’t seem to be in the cards for now.

But with these targeted cuts, is Jerry Brown doing what Bill Lockyer has been suggesting by targetting projects and regions favored by Republican legislators?  Earlier in the week he suggested doing just that:

State lawmakers who want an all-cuts budget because less government is better should get their wish starting with their own districts, state Treasurer Bill Lockyer said this morning.

Lockyer, visiting the Bay Area News Group-East Bay’s editorial board, said that when these lawmakers – many of whom already serve the state’s most recession-stricken areas – start hearing from their constituents about even deeper cutbacks in police and fire services, public schools and universities, social services and the like, they’ll soon think the better of stonewalling a public vote on Gov. Jerry Brown’s plan to extend current tax rates for five more years. (BayAreaNewsGroup)

Indeed, Senator Steinberg has echoed the sentiment.  Of course, the question of cutting specific regions gets kind of tricky, and very dicey politically.  I’m not saying it can’t be done, but for now this is really all gamesmanship.  Gamesmanship that probably should have started a few months ago, but that’s neither here nor there.

Of course, on the flip side, Republican Senate Leader Dutton says that it is all the Democrats fault because they won’t agree to the Republican plan.  Oh right, I remember that night in November when hell froze over and the Republicans took a majority.  The fact is that the Republicans are overplaying their hand, and eventually it has to have some ramifications for them.

Cutting into the budget for the death penalty is a good start, but it isn’t going to really get to the heart of the matter.  Unless we get some movement from the Republican legislators, the cuts are going to be coming directly from classrooms.

LAT/USC Poll: Californians Oppose Cuts Only Budget

Governor Brown has been making the case for a vote on extending the sales taxes since January.  It’s not had much effect on the Republicans in the Legislature, but it does seem to making some headway with the people:

California voters agree with Gov. Jerry Brown that tax increases should help close the state budget deficit, and they want to vote on his plan for raising the revenue, according to a new Times/USC Dornsife poll. …

Sixty percent of those surveyed, including majorities of both Democrats and Republicans, said they back such an election. The alternative being pushed by most GOP lawmakers – forgoing an election and balancing the budget by cutting more from state services – was supported by just 33%.

You can view the full poll here, but there is some really interesting information.  It might drive pretty much any politically interested person crazy as much of it is wildly conflicting, but that’s kind of what you get when you ask questions that drop nuance in favor of simplicity.  Not that there is anything wrong with this poll, but asking questions that really focus on values is more of an art than a science.

The bold face numbers aren’t so bad, with only 25% of voters preferring a cuts only budget when they find out that such a budget would require cuts to K12 education.  Later on down the line you see that when asked if they support a state budget cap at the rate of inflation, a pretty strong majority supports it.  Of course, the fact that a budget that only increased at that rate would require some pretty heavy cuts due to population growth didn’t come up.  Oh…and we still have outstanding debt that has to be paid at some point.

This really does reflect the bigger problem of a system of governance with no real leader.  There isn’t anything wrong with the Governor, it is just that the system is designed to fail.  The elected leaders are subject to the whim of the initiative system, a process that favors feel-good slogans over sound policy.  For now, we have to deal with it, as Republicans are increasingly recalcitrant.  But, this is really no way to run one of the world’s largest economies.

After all, what it comes down to is that Californians want their cake, and they want to eat it too.  They want their two Santas, one to give them stuff, one to cut their taxes. While there are these competing visions (one of which, the Laffer-curve mania, has never been shown to work for anybody but the rich), we really can’t be surprised with these type of results. After all, the Republicans have been telling everybody that they can get something for nothing for years.

If we can get it on the ballot, a focused campaign can pass revenues, of that I am confident.  My certainty doesn’t extend much past that.