I guess post-partisan was so nine months ago. Today, Arnold Schwarzenegger appeared on FoxNews (h/t SacBee) with Greta Van Sustern. Always a “fair and balanced” forum, don’t you know.

Ol’ Greta really went after him, with such chin music as “Is it hard to make the cuts?” and “Why are the Democrats mad at you?”

But Arnold took a different tack than the New York Times Article where he famously said that after work he goes home to enjoy a stogie in his jacuzzi. This time he claimed to, you know, give a damn about the state that he was elected to govern.  He claimed there were many sleepless nights, interesting how that differs from last time. I suppose he learned a lesson.

But the more interesting thing in terms of policy was his frank talk about his use of the shock doctrine to bend California to his crazy will. From my rough paraphrase of the interview:

GVS: Why does California have big problems?

GAS: California is more exaggerated about everything, with the good things, but also with the bad things. We don’t have just a lack of revenues, but we have an outdated tax system. It’s always very popular to pile on the rich, but it backfires when Wall Street takes a hit. Other states don’t have those kinds of losses, like $60 Billion in losses, that’s bigger than any other state’s budget. The budget in this system is outdated, the tax system is outdated, the initiative system is outdated. There is a lot of things like that we need to modernize. We also have a budget which needs 2/3 of the vote, which a lot of states don’t have. We have to use the loss of revenues as an opportunity to reform all of those systems as quickly as possible.

I tried to do this for the last 5 years. I tried through the initiative system, but the people didn’t vote for it. The special interests spent hundreds of millions, and I tried through the legislature. But we can use this crisis to create change.

This is pretty much textbook Shock Doctrine Theory, using a crisis to push through reforms that are democratically unpopular.  It really isn’t that much of a stretch that Arnold himself was in fact pushing the state towards that crisis. Whether that was willful depends on your political take of the situation, I suppose.

I suppose there shouldn’t be any surprise left with this governor.  But, on occasion, Naomi Klein’s thesis just rings so dramatically true with this guy, that you just have to shudder.

Over the flip, you’ll find my very rough paraphrase.

GVS: Why are they made at you:

Gov. Arnold Schwarzenegger: I promised the people of California that I would never sign a budget that was not balanced and did not have a reserve. … So I had to make the tough decisions. … We need a reserve for fires and earthquakes.

GVS: Making Cuts isn’t a lot of fun is it?

GAS: This is the greatest job, the most rewarding job, the most challenging job. There are moments when it is hard…You have sleepless nights. You don’t want to make the cuts. But if you don’t have the money, then that’s what you have to do. Just cuts, cuts, cuts, to bring the spending in line with the revenues.

GVS: Why does California have big problems?

GAS: California is more exaggerated about everything, with the good things, but also with the bad things. We don’t have just a lack of revenues, but we have an outdated tax system. It’s always very popular to pile on the rich, but it backfires when Wall Street takes a hit. Other states don’t have those kinds of losses, like $60 Billion in losses, that’s bigger than any other state’s budget. The budget in this system is outdated, the tax system is outdated, the initiative system is outdated. There is a lot of things like that we need to modernize. We also have a budget which needs 2/3 of the vote, which a lot of states don’t have. We have to use the loss of revenues as an opportunity to reform all of those systems as quickly as possible.

I tried to do this for the last 5 years. I tried through the initiative system, but the people didn’t vote for it. The special interests spent hundreds of millions, and I tried through the legislature. But we can use this crisis to create change.

GVS: What would you change structurally?

GAS: I would change the tax structure, to make it less volatile, to not just rely on rich people. It makes you vulnerable.

I would change the budget system to have at least a $10-15 billion rainy day fund.

We need a spending cap to never spend more than 4-5% than the previous year. We have to give the extra revenues for a rainy day fund

I would also change the initiative system, so we don’t have people just trying to spend money we don’t have.

GVS: Were the rich complaining? Would taxing the rich solve the problem? Is the money there to tax the rich?

GAS: It doesn’t have to do with the rich complaining, but all the rich people are living the state. They can leave the state, and income tax is volatile. The revenues are not just based on economic activities in California, it’s based on Wall Street. We can’t make important programs go on a roller coaster ride. You can’t continue running like that.

GVS: After the Democrats left, did they know this was coming?

GAS: Yes, they realized it. Sometimes, legislators come to me and say we are a bunch of kids. They were not willing to make the extra step. It was not balanced, and in the hole by $150 million.

This is the legacy of historically unpopular Governor Arnold Schwarzenegger and his friends in the Yacht Party – corporate sponsorships for state parks.

State parks officials and nonprofit organizations scrambled Wednesday to find funding and possibly new corporate sponsors to keep as many as 100 parks and beaches open after Gov. Arnold Schwarzenegger slashed an additional $6.2 million out of the state parks system […]

State officials won’t finalize a list of park closures until Labor Day and said they hope to see the parks reopened in one to two years.

“We are actively seeking anyone who can help us with these places, all of them jewels, at a time when people need them most,” said state parks Director Ruth Coleman.

“There are many groups and corporations that will step up to the plate and try to help,” said Elizabeth Goldstein, executive director of the California State Parks Foundation, a nonprofit organization dedicated to protecting state parks. “But it would be a mistake to think that these efforts will be sufficient to replace the public funds being extracted.” […]

The crisis also triggered debate over the kinds of recognition corporate sponsors could expect in return for helping to subsidize a state park.

“We’re reaching out to all possible partners — cities, counties, nonprofits, banks, corporations, newspapers, individuals — who would be interested in helping us,” said Roy Stearns, spokesman for the state parks department. “Maybe we can find agreements that don’t alter, commercialize or degrade our state park system.

“For example, if Budweiser came forward with money for Malibu Beach State Park, we wouldn’t change the name to Budweiser Beach,” he said. “But why not put up a banner saying, ‘This park is kept open by Budweiser’ for as long as they continue helping us?

If this isn’t a hop, skip and a jump to unique licensing agreements to sell products on site, I don’t know what is.

The article makes pretty clear that, while state parks and beaches may not be financially self-sustaining, they generate major amounts of economic activity.  In fact, over the past year, the system “is currently packed with the highest visitation rates ever recorded,” according to the parks director.  This leads to residual spending in the areas around parks and beaches, increased tourism, etc.  The natural beauty of California is a major attraction throughout the world.

Thanks to Governor Hoover we must lock them up or turn to the private sector to sustain them.

All part of his plan.

…I want to also address George Skelton’s complaint that progressives somehow made their bed by voting down the May 19 ballot measures and now they must lie in it.  I’ll ignore for the moment this major error in the piece, the assertion that “state revenue has been plummeting, down 13% in the last two years even with February’s tax increases.” (um, they didn’t take effect until April, not over the “last two years”) And I won’t comment on his barely suppressed glee over eliminating cost-of-living adjustments for poor people on welfare.

Schwarzenegger and the Legislature were widely accused of scare tactics — crying wolf — when they warned about the consequences of voters rejecting the May ballot measures. The wolf just broke down the door.

So let’s do Skelton’s counterfactual.  Let’s envision a world where the ballot measures that impacted the bottom line passed.

Those were worth a little less than $6 billion.

The deficit was $26 billion.

$1 billion of those $6 billion were cuts to different programs.  If a world where cuts to certain programs means we wouldn’t feel cuts to other programs is a world you populate and exalt, I think you’re alone.

The other $5 billion was dubious borrowing.  The most contentious item in the budget, and the most likely to have been dropped in your counterfactual… was $5 billion in dubious borrowing, only to local governments.

So the consequences of voting down very unwise ballot measures was… what, exactly?  Different cuts to vital services and different dubious borrowing?

(And of course, we’d have a permanent spending cap, rather than the political spending cap we have now thanks to the conservative veto.)

I mentioned a few days ago that I spent a couple nights camping in the state parks over the weekend.  I was up in Mendocino and stayed in two different state parks between there and SF.  We are really fortunate to have resources like these. They provide a lot to the people of California, not only in terms of recreation and preservation of our natural resources, but also to our economy through the tourist dollars that they bring to their local communities.

Yet with the signing of the budget, Arnold Schwarzenegger took another $6 Million from the state parks budget, bringing the total cut from the state parks budget to $14.2 million for this round of cuts.  These cuts will result in the closure of nearly 100 parks, or almost a third of the entire state park system.  A closure list has yet to be released, but we should be seeing something on that front from the folks at the state park system very shortly.

At any rate, the situation is dire for the state parks.  In fact, it is so bad, that the parks’ web page now has google ads on some pages. Scary, but you can’t blame them.  Perhaps if enough Californians click through on those Google ads we can save a park or two!  But, on a more serious note, the question of how the state parks will be financed is a vexing question.

The trouble is that the parks are seen by some as a sort of luxury. That is far from the case, and many of the really talented and visionary leaders of our state and nation have understood that and advocated for the parks. But as long as they are seen as of lesser importance they will continue to be killed by a thousand cuts.  I have no doubt whatsoever that the parks will once again be on the chopping block when we come back to the budget fight, likely around October or so.

Of course, for long-time park defenders, the subject of a ballot measure to protect the funding stream is certain to come up.  Parks are always popular, but the polling on the cuts doesn’t exactly bode well. Back in April, Field showed (PDF) that 51% of Californians favor cuts to state parks. Yet, in the press release I’ve included below the fold, there is some vague mention of “a dedicated funding source.” Such an idea would be a mistake for a litany of reasons.

It’s not that I don’t want to protect the parks, it is that our state cannot be run by the ballot box any more. It’s that our system already has too much money outside of the regular budget process. Of course, it is the budget process itself that is the problem. It is no shock that in a system like ours, we cannot fund traditional state priorities. It is a sad, sad sign of the legacy of this generation of leaders.

But, if you have $15 million laying around, perhaps you could shoot it over to the parks. I’m sure they’d appreciate it, and so would I.

California State Parks Foundation Statement on Governor’s Budget Revise

SACRAMENTO, CA – Today, the Governor signed a revised Fiscal Year 2009-2010 state budget, based on the package of bills sent to him by the Legislature on July 24.  In using his blue-pencil veto authority, the Governor exacted an additional $6.2 million cut to the state park system, bringing the total General Fund cut to $14.2 million.  It is expected (and referenced in the Governor’s budget summary) that more than 100 state parks will be closed.  Below is a statement of the California State Parks Foundation (CSPF) on the Governor’s veto.

Statement of Elizabeth Goldstein, CSPF President

“This is a dark day in the history of California’s state park system.  At a time when Californians are most in need of their low cost, accessible state parks, the gates are being slammed in their faces.  At a time when local businesses, particularly in rural communities, most rely on tourism and park visitation for their own economic stimulus, the doors are being shut to them.  In the context of an $85 billion General Fund budget, the $14.2 million in “savings” that would come from closing more than 100 state parks is truly a drop in the bucket.  But it’s a small drop that will have a ripple effect, then a tsunami, for park visitors and local economies.  

Closing more than one-third of the state park system cannot be done without real consequences to Californians.  Although CSPF and other park partners are already trying to identify ways to keep some parks open, it will simply not be possible for the state to walk away from 100 parks and expect others to fully substitute for its public responsibility.  California’s state parks have been teetering on the brink of a funding cliff for several decades, this action now pushes them over the edge.  California cannot afford for its state parks to be a political football every year.  Our state parks desperately need a dedicated funding source to protect them from these now-annual budget actions.”  

###

About SOS

The Save Our State Parks (SOS) Campaign is a statewide, grassroots campaign to keep California’s magnificent state parks open. In partnership with organizations, businesses, local governments, and individuals around the state, the California State Parks Foundation is leading SOS Campaign activities and generating awareness and action about budget proposals that would result in unacceptable park closures. For more information visit www.savestateparks.org

About CSPF

With our 100,000 members, the California State Parks Foundation (CSPF) is the only statewide independent nonprofit membership organization dedicated to protecting, enhancing and advocating for California’s magnificent state parks. CSPF is committed to improving the quality of life for all Californians by expanding access to the natural beauty, rich culture and history, and recreational and educational opportunities offered by California’s 279 state parks-the largest state park system in the United States. For more information about California’s state parks, visit www.calparks.org

There’s been quite a bit of confusion about whether or not the Governor was able to make line-item cuts in this budget.  After all, it was a revision, not a budget agreement where spending appropriations are made.  In those cases the Governor can make cuts, but this was a revision consisting of a series of cuts and fund shifts, and it’s unclear whether the Governor can make additional cuts on top of cuts in a budget revision.

Craig Cornett, the Budget Director in the office of Darrell Steinberg, has sent out a letter to interested parties, which I’ve reproduced below.  Cornett reiterates the argument that the revision do not constitute appropriations, and should not be subject to the line-item veto.  This is particularly true with any appropriation reductions that passed with a simply majority vote, since a budget vote must have a 2/3 majority.  Cornett offers the remedy here, but he confines it to the courts.

Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit.  Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women’s shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.

What Cornett leaves out of this analysis is the ability for the Legislature to override the Governor’s blue pencil edits.  Obviously that is off the menu, as far as we know.

I don’t think it would surprise anyone to see Schwarzenegger break the law to balance the budget – so many provisions in this budget violate the law that it can be seen as a stimulus package for the legal system.

When the Governor signed ABx4 1-the bill that revised the 2009-10 Budget Act-and accompanying trailer bills this morning, he line-item vetoed about $500 million in General Fund expenditures in order to ensure that the state has a reserve for 2009-10.

Budget staff from both the Senate and Assembly worked closely with Legislative Counsel in construction of ABx4 1 and, based on that work, and follow-up conversations, we think that these vetoes-especially those of health and human services programs-are outside the Governor’s Constitutional authority, for a couple of reasons.

First, reductions to amounts in the various budget schedules do not actually constitute appropriations and, thus, are not subject to line item veto.  This argument is bolstered by Counsel’s long-held view that, unlike new or increased items of appropriation, the Legislature may reduce General Fund items of appropriation with a simple majority vote, and any General Fund action that takes place with a simple majority vote is not, by definition, an appropriation, and therefore not subject to line-item veto.

Second, most of the budget revisions for the health and human services departments were not even included in the scheduled items, but instead were placed in Sections of 568 to 575 of ABx4 1.  These sections of the bill added new Control Sections 17.50 to 18.50 to the 2009-10 Budget Act that reduced the various appropriations for HHS departments in a descriptive manner, thus making it even clearer that they do not constitute appropriations.  These control sections include departments that were specifically included in the Governor’s line-item vetoes-Aging, Health Care Services, Public Health, MRMIB, Mental Health, Developmental Services, and Social Services.

Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit.  Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women’s shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.

It’s not like the “budget deal” hasn’t already accomplished some sort of dark goal of letting a large group of Californians float in the wind.  Clearly, the “deal” will result in the untimely deaths of hundreds, but more likely thousands, of Californians.

We’ll get more details of the cuts up as soon as we can. But here is what the Bee has for now:

Line items totaled $656 million, including cuts in the Office of Aids Prevention and Treatment. (SacBee 7/28/09)

What does this mean? Well, it means more Californians will get HIV. Some will die young, and others will chronically take HIV meds for the rest of their life.  This is just one more  profound failure in an administration that has been one big disaster after another.

In case you are wondering what exactly the Office of AIDS does, here is the official Office of AIDS website. Because clearly this goal is just a waste of money:

OA is committed to assess, prevent, and interrupt the transmission of HIV, and to provide for the needs of HIV-infected Californians.

Oh, never mind actual statistics showing overall rebounding rates of seroconversion and skyrocketing HIV rates among minorities, especially African-Americans, Asian/Pacific Islanders, and young people.

No, we need to “live within our means” aka dying without them.

UPDATE: Over $52 million of the cuts were from the Office of AIDS. I wonder how his good buddies in Hollywood feel about this.

$52,133,000 General Fund for various programs administered by the Office of AIDS:

Education and Prevention, Therapeutic Monitoring, Counseling and Testing, Early

Intervention, Home and Community Based Care, and Housing

We’ve said here a few times that the budget plan is really neither a budget nor a plan.  Well, seeing as there really isn’t an idea of how to make the numbers meet, the words just don’t seem very descriptive. Most glaringly on this front is the $917 million  (give or take a million … or twenty …) that the Legislature didn’t include in the slew of budget bills they passed.  These included the Tranquillion ridge oil drilling project and the borrowing of gas tax funds from localities.

So, now the bills are in the hot little hands of our governor, action hero wannabe Arnold Schwarzenegger.  Under the rag that is our state constitution, Schwarzenegger now has the opportunity to make some cuts through line item vetos. Thing is, that he’s only given a few hints as to where he is going to act. Yesterday, his peeps indicated that there won’t be a fourth furlough day, as apparently that is even a bridge too far or something like that.

“A fourth furlough day will not be part of the solution,” Schwarzenegger spokesman Aaron McLear said. “It’s not something the governor’s considering.”

Of the line-item vetoes McLear added, “It’s unlikely we’ll be able to come up with cuts equal to the $1.1 billion, but we’ll get as close as we can. It’s important for us have as big a reserve as possible.” (SacBee 7/27/09)

But, where will he cut? With the constitutional protections under Prop 98, it really can’t be much in the way of K-14 education. That, of course leaves a big bullseye over health spending. Anthony Wright, a friend of this blog and the head honcho at Health Access, is quite concerned:

Anthony Wright, executive director of Health Access California, said he fears Schwarzenegger could further eliminate a block funding grant that pays for Healthy Families low-cost medical insurance for children. The program is already slated to lose $124 million.

Wright and other social service advocates suggested Monday that Schwarzenegger could face limits in what he can veto because the package of 27 bills constitute a series of budget reductions, rather than the spending approvals in February’s full budget act. (SacBee 7/28 09)

At this point, we really don’t know much about where he’s going with these cuts, but we should expect news soon.  Either way, some program is going to be decimated in the short term. The Legislature will then attempt to find some way to patch the leak, likely without much success.  This is how things work now in Sacramento. It’s the new normal.

Arnold Schwarzenegger will sign the FY2010 budget revision quietly tomorrow, with up to $1 billion dollars of line-item cuts that could potentially cause more pain for California citizens.  He’ll claim that he was acting responsibly and in the best interests of the people.  As CalBuzz says today in about as shrill a way as imaginable, it’s a load of crap.

“(T)he biggest winner to emerge from our negotiations is California,” the governor bragged, “our state’s legacy, its priorities, and its budget stability.”

Wrong, wrong, wrong!!

Schwarzenegger’s triumphalist braying was little more than a one-step-ahead-of-the-posse exercise in spin control, a pathetically transparent bid to establish a positive narrative for the budget disaster over which he’s presided, in hopes that voters and his suck-up pals in the national media will buy his story without bothering to check it out.

(NOTE TO NATIONAL POLITICAL WRITERS: Schwarzenegger did NOT solve or stabilize California’s budget. Despite his assertion to the contrary, his budget – passed in February and now revised twice – actually RAISED TAXES by $12.5 BILLION. With the latest revision, he threw off enough ballast to keep his hot air balloon afloat but in no particular direction.) […]

In truth, Arnold’s entire tenure has been one continuous failure of leadership. This is just the latest chapter.

From his first days in office (when he sowed the seeds of today’s never-ending fiscal crisis by his irresponsible cut in the vehicle license fee) to his ill-considered $15 billion borrowing bond (which helped make interest payments the fastest growing item in the budget) and his current shameful spending plan (which gives the University of California a major push into mediocrity while continuing the slow death of K-12 education and punishing the aged, blind and disabled), he has been little more than a narcissistic, tone-deaf poseur, surrounded by sycophants and devoid of principle or conviction.

Allow me to sit up and take notice at the shrill-ness.

And their points are completely inarguable.  It’s not just this budget revision, which makes draconian cuts and multiple faulty assumptions of revenue in order to pretend to fill a partially self-created deficit (we’re not getting $1 billion from the federal government for Medi-Cal reimbursement, for example, nor will we sell the State Compensation Insurance Fund for $1 billion).  It’s that his entire tenure has had the goal of enforcing the tax revolt and eroding the New Deal consensus that Californians still by and large support as an electorate, though they lack the governmental structure to carry it out.  And in that respect, he was wildly successful.  Except Californians have figured out implicitly that this vision of the future is abhorrent, and while they haven’t yet put their finger on who to blame, they could do worse than looking at the Governor.  It is no accident that Schwarzenegger is viewed unfavorably by both parties, having driven the state completely into a ditch and hastened the near-depression in which we find ourselves.  The structure of government resists workable solutions to our fiscal problems.  But Schwarzenegger’s reckless management has greased the skids and achieved nothing for the citizenry but future pain and suffering.

In the latest outrage, he enthusiastically endorsed a budget process that will help push the whole country into a deeper recession by canceling out the impact of the federal stimulus package.

Tens of billions of dollars are cascading into California from the federal stimulus package, but the economic oomph is being weakened by massive cutbacks in state spending.

The financial crosscurrents show up in places like downtown Sacramento’s old railyard, now undergoing a huge facelift. Stimulus money from Washington, D.C., will help move the train tracks, a key element of the plan. Separately, though, the slashing of redevelopment funding by the Legislature might derail a housing project at the site.

This push-pull effect will play out in education, transportation and other sectors. Economists say the likely result will be prolonged pain and a weaker recovery despite the $85 billion coming to California from the stimulus program over the next two years or so. Unemployment stands at 11.6 percent in Sacramento and statewide, and is forecast to exceed 13 percent next year.

The state budget “absolutely … will blunt the impact of the stimulus,” said Chris Thornberg, head of Beacon Economics consulting in Los Angeles.

Remember all this when you see some Twitpic of the Governor brandishing his pen and telling his list of followers tomorrow that he “fixed” the budget.  The fix is in, to be sure – and the people will feel the results.

So the Assembly is wrapping up their budget session, and it turns out that the Assembly came up $1.1 billion dollars short of the Senate’s solutions.  Oil drilling failed, and the local government raid on HUTA (gas taxes) failed as well.

So where does that leave us?  These bills will go to the governor, and since there isn’t concurrence, it will be roughly a $23 billion solution rather than $24 billion.  But, the Governor has a line-item veto.  He can make various cuts with his blue pencil.  But $1.1 billion?  Who knows.  That seems like a tall order.

Considering what Schwarzenegger did the last time a partial solution was handed to him, I guess there’s an outside shot that he’ll just say no and open a new extraordinary session.  But he’ll probably just line-item some, and maybe make up the difference by eating into what is now a $900 million dollar budget reserve.

Is everybody ready to be back here in October?

…We’ll have a couple days for final analyses, but let’s remember that this is a terrible budget and a dark day for California.

…Let me clarify.  The Governor can make line-item cuts but he doesn’t necessarily have to, because this is a budget revision.  He can also shift around the size of the reserve.  In the end, he doesn’t actually have to be in balance for a revision; that’s a Constitutional need at the beginning of the process, as I understand it, not now.  Clearly from the Governor’s remarks, he’s not going to veto the whole thing, so this is the “solution,” for now.  There also may be Constitutional problems with some of the stuff passed.

…Apparently, the Governor said, jubilantly, “We missed the iceberg”.  First, WE didn’t miss anything, YOU dumped the iceberg on poor people.  And second, if you really think you’re in the clear, um, don’t look behind you.