UPDATE: I can’t forget about the other Democratic candidate: SF Supervisor Michela Alioto-Pier thinks she’s running for the race as well.  She entered the race too late to file for the July filings.

Here’s today’s entry into my continuing money race series: insurance commissioner. The insurance commissioner is kind of a strange gig. There are a number of other insurance regulators in the governor’s administration that also do a lot of regulation that the title is kind of overbroad.  For example, the department of managed care regulates HMOs and most health insurance, so strike that one off the list. Although I’m not really sure it should be an elected position, the insurance commissioner does play an important role in publicly defining the relationship between the state and insurers.

This should be an interesting race. In theory, it’s one of those races where typically people vote based upon party because they haven’t really heard of the candidates.  The exception would be 2006 when voters had heard enough about the Democratic candidate, Cruz Bustamante, to know they thought his campaign slogan was very apt: Lose with Cruz. Seriously, the campaign was something about weight loss or something.

Anyway, this time you have three Assembly members running for the race, with the Republican, Mike Villines, probably having the highest profile due to his Assembly Minority Leader position until he was deposed after the February budget deal. On the Democratic side you have Dave Jones, a long-time progressive who is pretty popular with the grassroots wherever he goes, and Hector De La Torre, a pretty good guy himself.

All of the candidates are pretty good fundraisers, but Villines has one key advantage: he’s taking money from every insurance company he can.  He’s received money from Aetna ($1500), Farmers ($3900) and the Association of California Insurance Companies PAC ($2000), among others. Asm. Jones has said that he will not accept any insurance money, and I found no evidence that he has done so.  Asm. De La Torre has taken a few contributions from insurance companies as well, but it seems to be less pervasive than Villines. That being said, if you are looking for the guy who is keeping as far away from taking money from the people you are supposed to be regulating, there is a clear winner: Dave Jones. UPDATE: It turns out those transactions were old, dating all the way back to 2006 and 2007. Asm. De La Torre has also pledged to take no insurance company money for this campaign.  It is reassuring that both Democrats see this as an important issue this time around.

As for the money totals, Dave Jones takes a huge cash on hand advantage into the race from his assembly account. Contributions for the first half of the year, despite looking lopsided in favor of Villines and De La Torre, were actually quite equal, as both of those candidates included transfers from their old accounts into their new insurance commissioner accounts. Keeping track of Villines money was particularly confusing because he also has an account for state senate in 2014 where he raised for the first part of the year, and the transferred to the IC account.  Nonetheless, each raised slightly under $300K for the first half of the year. Villines spent a ton of money, over $400K. It seems to have gone to slate mailers, so perhaps this was related to the May 19 election. Otherwise, I’m not sure when these mailers are going to go out.

This should be an interesting race. The Democratic primary could be an interesting discussion between two qualified candidates, while the general election could end up being a little more competitive than we’d like.

In a last-ditch and ultimately futile attempt to get the Republicans to support the May 19 ballot measures, Yacht Party leader in the Assembly Mike Villines played the majority vote card.

One fear of GOP lawmakers surrounding the May 19 special election is that should the ballot measures fail, Democrats and Gov. Arnold Schwarzenegger could go around them and simply swap certain taxes for fees and raise revenues without their votes […]

“I know it’s counterintuitive, but by coming to the table and negotiating, we saved the two-thirds protection,” Villines said as the California Republican Party opposed the measures. “Mark my word, I believe that if these initiatives don’t go through, you will see a majority-vote budget, you will see it signed and you will see the defense of taxpayers in this state disappear.”

Mike, you say that like majority rule is a bad thing.

Unfortunately I don’t share the optimism of Asm. Villines about the backbone of the Democratic Party to go ahead and fill the budget gap with a work-around fee increase.  I had the opportunity to share the stage with a couple members of the legislature this weekend to debate the special election, and in particular, Senate Majority Leader Dean Florez seemed especially pessimistic on the majority vote option.  He basically said that the lawyers advising the legislature questions the legality of the effort and that if the ballot measures fail, “we will have a cuts-only budget.”  He even went so far as to identify particular cuts that have already been discussed, all affecting the usual suspects – the elderly, the blind, the IHSS patients, kids without health care, CalWorks members, etc.  So that’s the May 20th strategy that the legislature is teeing up.

Now, maybe it’s easier to ramp up the fear by playing up this disaster scenario in the event of the failure of the ballot measures.  But I definitely expressed disappointment that the Majority Leader was foreclosing on an option which the nonpartisan Legislative Counsel found perfectly legal.  I see no need to shut down creative solutions to the budget problem, especially when they can offer a glimpse into how a working government can function in a post-two-thirds environment.  Even moderates and conservatives understand that the Yacht Party has hijacked the state and irresponsibly used their chokehold on legislative rules to force failed solutions and drive California into a fiscal ditch.  The point is that this is coming, or at least it ought to be, whether by a work-around or ballot initiative, and we can end this hostage situation that Republicans have forced upon us for the last thirty years.  To their credit, everyone in the legislature that I’ve talked to wants to move forward on repealing two-thirds.

Sen. Florez and I had a lot else to discuss in our debate (including his admission that “if you want to vote No on 1F, go ahead,” which was a bit off the reservation), including the continued debate over the state spending cap, Prop. 1A (or a spending constraint, if you prefer, but certainly not anything like the inoffensive tweak that supporters make it out to be).  In the end, the West Los Angeles Democratic Club took no position on anything but No on 1E, and PDA, where I also spoke this weekend, voted NO on all the ballot measures.

A few quick updates.

First: Two great sources of Twitter updates. John Myers Capitol Notes here and Anthony Wright of Health Access here.

From the twitter updates I’ve seen so far, it looks like the Governor is leaning very, very hard on Cogdill, Ashburn and Dave Cox.  At this point it looks like Sen. Cox (R-Fair Oaks) is the key vote.  Incidentally, Maldanado is doing us no favors.  Good thing nobody ran against him last year.

Another interesting tidbit from the Capitol: Asm Chuck DeVore, (R-OC) and Republican candidate for Boxer’s Senate seat, attempted a coup on Assembly Minority Leader Mike Villines.  It failed.

Update by Robert: DeVore resigned his post as whip in the aftermath of the apparent leadership struggle, thereby taking his ball and going home:

“For these reasons, I believe it is appropriate for me to resign as Chief Republican Whip, effective immediately.  I can no longer participate as a leader on a team that is preparing to make a fundamental mistake of colossal proportions.  For the sake of California I hope I am wrong – however, I fear I am right and that this tax increase and budget deal will result in more harm to the Golden State than good.”

In the Byzantine world of Yacht Party politics this of course is good news for his chances of winning the party’s nomination to get pummeled by Barbara Boxer in 2010.

Update by Brian: Per John Myers’ tweets it appears Dave Cox is trying to get Prop 10 (tobacco tax) money diverted from children’s health care programs. So far, it seems the Democrats are resisting. While we’re speaking of kids, the CA Budget Project has a chart (PDF) of how much the deal would cut from K12 funding by district.

Update by Brian 6:30am: Well, it seems the legislators have pulled an all-nighter, as the Senate continues to be one vote short.  John Myers has been a real sport and tweeted throughout. Sen. Cox announced at about 1am that he was a no on the budget, despite the changes to Prop 10 that were done only to please him. On another note, apparently when the Assembly went into lockdown, they really went into lockdown, Assembly sergeants-at-arms at the doors and everything. Over in the Senate, they dimmed the lights.

This process has been a disaster.  The worst of everything that we’ve been going through for months, even years, with the Republicans.  This is a fancy stick-up, with a patina of legitimacy. Who knows if a deal will be reached, but at this point there can be no question from the High Broderists who caused this.  Every newspaper, every television station, every radio station should do what the Media News group did and call out the Republicans for their stickup of the state.  

Their sheer cowardice to face down their own interest groups is remarkable. It is truly a sad day when a group of elected leaders, when faced with a clear policy decision between what is good for the state and what is good for the politician, have decided that they choose themselves.  They have willingly played along with the anti-tax rigid ideology, and their capacity to actually lead on their own has withered away.

What happens from here is anybody’s guess. Maybe they get the additional vote, maybe they don’t.  Perhaps, Arnold will be willing to sign the majority budget agreement that the Democrats passed back in December now, because lord knows we cannot simply do nothing.  Arnold wanted to play brinksman, well here it is.  We are standing at the precipice, does he want to jump?

Update by Brian: Quick thought – how big is that LA Board of Supes victory by former Sen. Mark Ridley-Thomas.  If he were still in the Senate, rather than the seat being vacant until March, the deal would have gone through by now. You have to wonder whether maybe labor wishes they hadn’t worked quite so hard to help him defeat Bernard Parks…

Two months ago I wrote about how Mike Villines’ threats on the budget were illegal under Section 86 of the California Penal Code:

86.  Every Member of either house of the Legislature, or any member of the legislative body of a city, county, city and county, school district, or other special district, who asks, receives, or agrees to receive, any bribe, upon any understanding that his or her official vote, opinion, judgment, or action shall be influenced thereby, or shall give, in any particular manner, or upon any particular side of any question or matter upon which he or she may be required to act in his or her official capacity, or gives, or offers or promises to give, any official vote in consideration that another Member of the Legislature, or another member of the legislative body of a city, county, city and county, school district, or other special district shall give this vote either upon the same or another question, is punishable by imprisonment in the state prison for two, three, or four years and, in cases in which no bribe has been actually received, by a restitution fine of not less than two thousand dollars ($2,000) or not more than ten thousand dollars ($10,000) or, in cases in which a bribe was actually received, by a restitution fine of at least the actual amount of the bribe received or two thousand dollars ($2,000), whichever is greater, or any larger amount of not more than double the amount of any bribe received or ten thousand dollars ($10,000), whichever is greater.

It appears that the California Labor Federation includes some readers.  Yesterday, they sent a letter to the Attorney General calling for an investigation into illegal vote-trading.

The charge by leaders of the California Labor Federation, State Building and Construction Trades Council, Sierra Club California and the Planning and Conservation League stems from reports that Republican legislative leadership are withholding their votes on a state budget as they attempt to extract votes on policy matters unrelated to the budget.

“Republicans are holding the state budget hostage in a shameful attempt to gut vital workplace and environmental standards that have absolutely nothing to do with the budget,” said California Labor Federation Executive Secretary-Treasurer Art Pulaski. “These actions aren’t just unconscionable, they may be criminal.”

According to a release from the California Labor Federation and the Sierra club there are several examples of actions that may be in violation of California Penal Code.

“Specifically, (Republican leaders) have demanded that legislators vote for proposals to weaken labor and environmental standards as a condition for any ‘aye’ vote from Republican caucus members on the overall budget,” the letter states.

According to the release, “This conduct appears to violate Penal Code Section 86, which prohibits any legislator from offering to give his or her vote in exchange for another legislator’s vote on the same or a different matter.”

Some would call this the criminalization of politics, but in this state, politics is too often a criminal enterprise, and it’s high time somebody was taught a lesson.  Like the Yacht Party.  

AG Brown should do this.  There’s already a Facebook group set up; I urge you to join it.  End the Blagojevich-ization of the California legislature.

Good ol’ Jon Fleischman is at it again. It seems Jon is getting a bit worried that some of his fellow Republicans aren’t willing to throw the state off the cliff.  Yup, Jon wants to break the unions, break the state, and break the government for all but the wealthiest amongst us.  Developing nation status here we come!

What did he do today? Why he brought a resolution for consideration by the California Republican Party, of which he is one of the vice chairmen.

Fleischman, who publishes the conservative FlashReport Web site, said the resolution is meant as a “stick” to dissuade GOP legislators from agreeing to any budget plan with higher taxes crafted with majority Democrats and Gov. Arnold Schwarzenegger.

“I think it is fair to say that if you are a Republican and, between now and the February convention, you vote for tax increases, you are likely to be censured by your party and cast out among the unwanted,” he said.

The resolution goes one step further than a censure. It calls for changes in party bylaws to allow the Republican Party “to campaign and contribute funds against these pro-tax Republican legislators in primaries, and in general elections.” (CapAlert 2/2/09)

As a member of the resolutions committee on the Democratic side, my guess is that this will face substantial heat.  But, as Nate Silver pointed out for the national GOP, the Yacht party is in a death spiral in California to an even greater extent.  As it loses supporters, its base clamors for more attention.  And, as you can see, the base is a rigidly ideological beast in search of a failed state.  That in turn turns more voters off, and the spiral continues.  This is a generally progressive state, with only one party that speaks to anything resembling a majority of the state.

So, who knows, maybe this will pass, and Fleischman will be touted as a hero as he seeks to become some sort of Chief Wingnut. But as he bloviates about bringing the state down, at least we get a peek at his real agenda:

Of course, the state should run counter to the economic times.  Anybody with an introductory economic class knows that.  The government is most needed when the state is in bad shape, and now is not the time to be slashing budgets, firing teachers, furloughing workers that are trying to process unemployment claims, and destroying workers’ rights.  No, this is the time to increase government spending, and doing it through the least economically painful method. Unfortunately, Republicans are barring every possible escape route. It’s like Dwight Shrute is playing games with the fire drills or something.

Just when you thought the Republicans don’t have anything to say, well, they say something. Mike Villines issues a question of What ifs. Many of them conflicted with each other if interpreted in any logical way.  Others are the same old tired Republican truisms that we’ve heard for years.  You know them, You hate them.  “waste, fraud and abuse” and “eliminate bureaucracy” to just name two of the golden oldies.

Of course, they don’t actually present any workable ideas, other than the same old “no more taxes.” But, you know, they are totally going to clear the state of the three-headed boogeymen of waste fraud and abuse.  The same damn boogeymen that have been dominating Sacramento for the past quarter decade.  You’d think the Republicans could clear some of that out during the 21 of 26 years that they’ve held the Governor’s gig.  Or perhaps it works better as a cliche than an actual policy? No, that would be cynical, and Republicans are never cynical.

By the way, did anybody else want to take a nap after watching this?

Transcript, and a whole slew of Republican Senators’ statements, over the flip.

COGDILL:

   I’m Senate Republican Leader Dave Cogdill.

VILLINES:

   I’m Assembly Republican Leader Mike Villines.

   California today is a state of problems, not a state of promise.

   It seems every time you open a newspaper, you read stories about our budget problems . . . Our unemployment rate . . . And our crumbling roads, levees and hospitals.

   Then there’s our declining schools . . . Not to mention our broken political system.

   Sometimes it seems things are hopeless in California.

   But what if it didn’t have to be this way?

   What if we didn’t have the highest unemployment rate in 12 years?

   What if we had a more competitive business climate?

   What if we passed state budgets on-time and ones that reflected the priorities of working families – and not special interests?

   What if we put jobs first and restored California as a place where opportunity was plentiful for our farmers and our small business owners who have made our state great?

   What if we reformed the system to ensure government worked for the people – and not the other way around?

   What if state government put Californians first for a change?

   This doesn’t have to be a dream . . . it can be a reality.

COGDILL:

   Californians deserve better from their state government.

   That’s why Republicans are fighting to change our state and pass reforms that will build a stronger California.

   We want to:

       * Get Californians back to work by lowering costs and promoting job creation.

       * Eliminate bureaucracy to help businesses hire more workers and prosper.

       * Give local schools more flexibility to put more dollars in the classroom for our children.

       * Help eliminate waste, fraud and abuse wherever it exists.

       * Provide greater oversight in how bureaucrats are spending your hard-earned tax dollars.

       * Reform our broken budget system.

       * Enact a spending limit to help our state live within its means.

       * And reject tax increases that hurt California families and devastate our economy.

   This is our vision for the Golden State in the year ahead.

VILLINES:

   By focusing on these priorities, I know we can make California the state of opportunity, prosperity and progress that it ought to be.

COGDILL:

   Thank you for taking the time to listen to us.

Statements from GOP Senators:

SACRAMENTO – Senate Republicans offer their comments regarding Governor Arnold Schwarzenegger’s State of the State Address:

Senate Republican Leader Dave Cogdill (R-Modesto) – “The Governor’s decision to dispense with the primetime pageantry of years past is appropriate in light of California’s dire financial condition. We see eye to eye on the fact that getting unemployed Californians back to work is vital to our economic recovery, and I’ve been pleased with his insistence that economic stimulus must be an integral component of any budget package.

“I also agree that our budget system is broken and in need of substantive and lasting reform. Senate Republicans have been proposing structural reforms of the budget process for years, and we’ll continue to press for them.”

Senator George Runner (R-Antelope Valley), Caucus Chair – “The Governor mentioned the political catchphrase of 2008: ‘change.’ The change that California needs to implement is to stop the ongoing cycle of overspending taxpayers’ dollars. California can beg, steal or borrow $40 billion today, but if we continue to spend with abandon we will be $20 billion in the hole tomorrow. Now is the time to live within ours means; we must adopt a spending limit, hold the taxations of our citizens to a minimum and allow government to provide only the most basic needs.”

Senator Sam Aanestad (R-Grass Valley) – “Senate and Assembly Republicans remain committed to working with our counterparts on the other side of the aisle and the Governor to solve the budget problem facing California. But there are no votes in either Republican caucus for any tax or fee hikes until permanent cuts and budget reforms are adopted by both houses of the State Legislature and signed by the Governor.”

Senator Roy Ashburn (R-Bakersfield) – “The Governor struck the right tone with his speech – less talk and more action. California is in an economic state of emergency and the lives of many Californians is made worse by the endless budget negotiations. There will have to be compromise on both sides and as the Governor said, real political courage is needed to move the negotiations forward.”

Senator John Benoit (R-Bermuda Dunes) -“I join the Governor in his commitment to stabilizing the budget prior to anything else. This task requires the cohesiveness of all legislators to save the State money so we can provide the environment necessary to spur California’s business community into productivity and job creation. We must consider free-market measures and embrace cuts in State overspending, regulatory relief, reforming programs and a real spending cap to address California’s $42 billion deficit.”

Senator Jeff Denham (R-Merced) – “California needs the action and courage Governor of 2004. Promises were made that boxes would be blown up and waste would be cut. The time to detonate the California Performance Review’s recommendations of selling off underutilized properties, like San Quentin Prison, and abolishing the Waste Board is long overdue.”

Senator Bob Dutton (R-Rancho Cucamonga) – “I completely agree with the Governor that the State of California is in a state of emergency and our focus as a Legislature should be on permanently fixing the state’s budget that now projects a deficit of $42 billion over the next 18 months. This state of emergency is not only affecting state government, but all Californians who are struggling to pay their mortgage, wondering if they will be able to hold on to their job, or watching their savings and retirement funds disappear.

“A major part of the solution to this problem must be to lift the government burdens that have been placed on businesses – driving jobs out of this state over the past several years. We must do much more to protect the jobs we have while we work to create new jobs. We must make California a more business-friendly state, creating new business opportunities and energizing the entrepreneurial spirit that has made this state great.

“I look forward to working with the Governor and my colleagues in finding ways to fix this state’s budget crisis and once and for all bring state spending in line with revenues.”

Senator Tom Harman ( R-Huntington Beach) – “The Governor’s comments today underscore the seriousness of what we already know – that California is at a crossroads. The national economy is in a free fall with no end in sight and it seems unlikely California’s economy will rebound anytime soon. Every day in America 17,000 people lose their jobs, 11,000 lose their health insurance and 9,000 families have their homes foreclosed upon.

“In our haste to address the state’s fiscal problems I want to be sure the policies we adopt do not make things harder for struggling Californians. Tax increases would fall into that category. Californians are already among the top taxed people in the nation. I would urge the legislative leaders and the Governor of the need to act quickly but without haste. California cannot afford mistakes. Any meaningful solution to this crisis must address both the immediate cash crunch and long term job growth. Helping businesses and jobs flourish in California will result in a robust state treasury.”

Senator Bob Huff (R-Diamond Bar) – “2008 was a tough year. A weakened economy, a decline in the housing market, and a lack of the Legislature’s will to rein in government spending has wreaked havoc on the hardworking taxpayers of California. As we look to 2009, I am encouraged that the Governor’s top priority will be to restore the foundation of our state’s fiscal house, for we are hamstrung by a budget crisis that dwarfs all other issues.”

Senator Tony Strickland (R-Thousand Oaks) – “I think the Governor is right that this is a year of political courage. We need an overhaul on reform, not a bandage solution that equates to a Bill Murray movie of Groundhog Day where we relive the same budget problems year after year. I am hopeful that we will move forward with real structural reform.”

Senator Mark Wyland (R-Carlsbad) – “I’m pleased that Governor Schwarzenegger is focused 100 percent on reforming and balancing California’s budget. In fact, I propose that this year the Legislature work with the Governor to focus exclusively on the budget first, then only his legislative package-and I’ve introduced measures to accomplish this. It’s the excess of unnecessary bills clogging the Legislature that weigh us down and take our attention away from what we should really be doing: evaluating the effectiveness of state programs and working on nothing but crafting a fiscally responsible budget for an entire year each session.”

(selected audio files also available here)