Tag Archives: Infrastructure Bonds

Prison Health Care Deal Finally Reached

Prior to yesterday, the buzz around the federal prison health care receiver was that he  spent half a billion more than budgeted in 2008-2009.  As Clark Kelso explained, these were overcharges for out-of-prison hospital care.  Because the facilities are so lax and because the proposed money Kelso has consistently sought hasn’t arrived, prisoners with medical issues often must be sent offsite.  “There’s a lot [of inmate care] that does have to be sent out […] because we don’t maintain that level of care within the prison.”

That was a message statement.  He was essentially saying “and I’ll keep going over budget if you don’t build the facilities needed.”  Interestingly enough, the very next day both sides floated a deal that would cut back the amount of prison hospitals to be built, but finally, actually build them.

State corrections officials and the prison system’s medical care receiver said Thursday they have reached the outlines of an agreement to build two new long-term health care facilities for inmates at a cost of $1.9 billion.

If the two sides can craft the memorandum of understanding that they say is imminent, it would represent a significant step toward ending the federal oversight of prison medical care in California that has created a constitutional crisis over the past year.

“That’s certainly something I believe we can finalize with this deal,” federal receiver J. Clark Kelso said in a joint telephone press conference with the California Department of Corrections and Rehabilitation Secretary Matt Cate […]

The facilities would house 3,400 inmates and be bond financed – possibly without having to be approved by the Legislature, according to Cate.

Originally, Kelso had sought a 10,000-bed set of facilities costing $8 billion, so this is significantly cut back.  However, it makes some sense if it is accompanied by a reduction in the overall prison population, thus requiring less health care infrastructure.  The point that Kelso finally got across is that we can keep delaying and delaying and go massively over budget every year to meet Constitutional responsibilities, or we can build the damn facilities.  This looks like a loss for Kelso, but it’s a win.

Bonds for infrastructure are at least somewhat inoffensive, but they need to be issued.  AB 900 bonds to build more prisons never got issued two years after being approved.

Scott Graves has more, including the data point that our corrections population is much older now than in past years, requiring more health care.  Another legacy of insane ToughOnCrime sentencing policy.

Governor Hoover’s Plan To Weed Out The Sick

I just appeared on KPFA with Eric Klein to talk about the Governor’s proposed budget cuts, along with several experts and stakeholders, including friend of Calitics Anthony Wright of Health Access California.  I agree with him that it’s almost hard to fathom the amount and severity of the cuts proposed for health care, especially at a time with the federal government is moving forward with a “do or die” plan to reform the health care market, increase access and lower costs.  The proposed Governor Hoover cuts would have the exact opposite effect, and the people gravely impacted by this will not have the luxury of waiting around for the Feds to catch up and fill in the gaps.

Two recent CBP fact sheets help break down the Governor’s proposed cuts to Medi-Cal and Healthy Families, in numbers that are easier to grasp. These fact sheets show:

More than 940,000 California children would lose health coverage if the Healthy Families Program is eliminated as the Governor proposes. More than 240,000 children in Los Angeles county alone would be affected. Want to know how many children would be impacted in your county? Check out the fact sheet to see.

In total, more than 1.9 million Californians could lose access to health coverage within three years through proposed reductions to the Medi-Cal Program and elimination of Healthy Families.

As the Governor said himself today, “behind every one of those dollars that we cut there are real faces.”

Kudos to the LA Times, by the way, for allowing the great unmentionable to get printed on their pages – the decisions made in Sacramento will truly be the difference between life and death for many Californians.

Schwarzenegger argues that the state’s declining economy and plummeting tax revenues have boxed California into a corner, forcing deep and historic cuts in the health and welfare programs that form the state’s social safety net. Without those tough measures, he says, California will cartwheel toward insolvency.

But a 10-person legislative budget panel, which is reviewing the governor’s proposals, listened during a long day in a crowded hearing room to scores of people who said their survival depends on programs set to be hit by the budget ax.

They heard from mothers of children with autism, representatives of people on dialysis, poor parents whose children see dentists on the government’s dime, former drug abusers set straight by a state rehab program.

And they heard from a woman named Lynnea Garbutt who has lived with AIDS all of her 24 years.

She has survived with the help of a state program that provides the expensive antiviral drugs she takes. Now, with that program facing elimination, she pleaded with lawmakers to save it — and her life.

“If these cuts take place, you’re not just cutting money from the program — you’re cutting my life,” she told the panel, her voice shaking and tears falling. “I choose to live. Please don’t make me die. My choice is life.”

This is how Yacht Partier Chuck DeVore responded – move out of the state.  Love it or leave it!

The cuts made to programs like Healthy Families (California’s SCHIP) would eliminate federal matching funds and double or triple the scope of the cuts.  And it would be one thing, by the way, if the Yacht Party simply held the line and said “we can’t afford it.”  But no, they want to spend billions of dollars, only on their own projects instead of saving human lives.

In this article in the San Diego Union Tribune, the same Republicans (and Republican governor) who would eliminate children’s health care and basic services for the neediest Californians, actually want the state to pony up the money for a water bond.

Schwarzenegger, says the article, is still fixated on a whopping $10 billion bond. And Senate Republicans are right there with him:

“Sen. Dave Cogdill of Modesto, the lead Republican on water issues, agreed. “It’s obviously a tough time to bring it forward, but we can’t wait,” the article notes.

We can’t wait? According to my calculator, If the entire $10 billion was sold together, the interest payment could be in the neighborhood of $660 million annually. That’s $660 million more that would have to come out of  schools, health care, and other items on the chopping block.

Similarly, the Yacht Party cried poor about programs that help people, but made room in the February budget for a huge corporate tax cut.

Everyone who has spent 10 seconds on this recognizes that there’s no good way to use current revenues to provide the basic level of services Californians deserve.  To the extent that I have hope that we will overcome the selfishness of the cruel and the impossibility of navigating a broken system, it comes from people, who are fed up and starving for leadership and change from a government that no longer serves their interests.  To turn the figurative starvation literal, Los Angeles teachers are going on a hunger strike to protest budget cuts.  We’re all hungry, and we’ll be a lot hungrier if Governor Hoover has his way.

The California Bailout – Not Enough, Won’t Help: UPDATED

The economic recovery that is currently being bandied about in Congress, particularly in the House, would deliver $4.5 billion dollars for infrastructure projects to California.  That’s 10% of overall infrastructure spending, which is in line with our population, but the overall pot for infrastructure is too small nationwide, and that kind of relief is not enough to make a dent in the budget nightmare.  The fact that money for tax cuts designed to snare Republican votes is crowding out infrastructure spending and job creation contributes to this, but the other problem is the deteriorating nature of our infrastructure, which could cost half a trillion dollars to fix properly.  All that money doesn’t have to come from the Feds, but with the bond markets unwilling to deliver for California until a budget solution is made, $4.5 billion over two years is a drop in the bucket, and the problem will grow worse.  This shows why floating bonds is a horrible way to fund government.

The report cites California’s dependence on bond financing as a chief reason the state can’t meet its infrastructure financing needs. California has increasingly used borrowing through state general obligation bonds to finance infrastructure projects. But the need for infrastructure investment far exceeds the capacity of these bonds, according to the report, Paying for Infrastructure: California’s Choices. Years of declining investment have left the state with crumbling classrooms, congested roads, and an aging levee network that puts many homes and businesses in harm’s way. Problems in the government bond market are making it more difficult to sell the bonds already authorized, and in the long term, large projected budget shortfalls will limit the state’s ability to rely on these bonds to meet California’s future needs.

We can of course see this right now, and the effects are widespread.  With the bond markets frozen, environmental projects all over the state have to be shut down, having a very real impact on the environment and public health.  Forget the more innovative projects we’d all like to see strengthened with fiscal investment – like the growth of the solar industry and even wave harvesting, the type of green jobs that can save our economy – we’re not even going to be able to clean the ocean this year.

If swimmers in Santa Monica Bay bump into trash or bacteria this summer, one culprit will be California’s budget impasse.

Hundreds of millions of dollars worth of voter-approved projects have been halted because of the state’s financial problems. That includes $12 million that the Santa Monica Bay Restoration Commission was counting on to prevent dirty storm water and filthy runoff from draining into the bay.

“People expect to be able to enjoy the beach and not come home sick,” said state Sen. Fran Pavley (D-Agoura Hills), chairwoman of the state Senate Water and Natural Resources Committee.

The money freeze has immobilized construction of new biking trails along the Santa Ana River in San Bernardino and Orange counties. It has stopped plans to tear down the Matilija Dam in Ventura County and restore the sediment-filled Matilija reservoir. It has impeded efforts to boost the populations of salmon and steelhead trout off the coast of Los Angeles and Ventura counties.

These are not small inconveniences.  A new report from Brigham Young University scientists shows that cleaner air, for example, has a direct effect on increasing the lifespan of a population.  There is a cost to bad borrowing.  If we can’t fund infrastructure, the ports and the oceans don’t get cleaned.  Smog reduction projects may shutter.  The air gets dirtier.  And you die three years earlier.

California’s delegation needs to push for General Fund relief in the recovery package, as well as federal guarantees for our municipal bonds, which would frankly jump-start projects faster than anything.  If it’s good enough for the banks, it should be good enough for California.

UPDATE: OK, the CBPP has a more comprehensive report, and the numbers are much more in line with current needs.  They predict that California will get $11.1 billion in increased Medi-Cal spending, and $7.8 billion from a new State Fiscal Stabilization Fund, in addition to the infrastructure spending.  That approaches $20 billion over the next two fiscal years.

Now THAT’S better.

Budget Follies

“Budget Nun” Elizabeth Hill’s pessimistic report about Governor Schwarzenegger’s budget stressed the need for more revenue to close the $14 billion dollar gap and maintain a professional level of services.  But if the money boys on Wall Street are to be believed, even that $14 billion dollar shortfall represents a number borne of outsized optimism.

Deep spending cuts proposed by Gov. Arnold Schwarzenegger last week were followed yesterday by more bad news – a Wall Street firm placed the state’s bond rating on “negative watch” amid fear that a $14.5 billion budget shortfall could get bigger.

The governor’s budget is based on data from November and early December that assumes tax revenue will grow 2 percent next year. But in recent weeks, some economists have begun to warn that the economy may slide into a recession, which would shrink tax revenue and widen the budget gap.

Fitch Ratings placed California’s bond rating of “A+,” already one of the lowest ratings of any state, on “negative watch” because of lawmakers’ inability to close a chronic budget gap and revenue forecasts in the governor’s budget that may be outdated.

By the way, the bond rating becomes slightly more important when you finance the government by, you know, floating bonds.  Boy, do we ever need a governor with a strong fiscal background to ensure our bond rating doesn’t go to crap!  Where d’you think we should get one of them?  Do we need another recall?

(over)

What choice did I have but to reach for the phone and dial three ringleaders from the 2003 recall of Davis? […]

Ted Costa, the anti-tax crusader and the man who drafted the Davis recall petition, was on the horn right away.

“We’ve got to get it going again,” I told him.

Costa seemed confused.

The recall, I said. The recall.

All the same conditions are there again, I told Costa, and there has to be another “throw the bum out” campaign.

“There probably should be,” Costa agreed, warming to the idea.

(that article is hilarious.)

The point is that if you have to use creative accounting just to get to a $14 BILLION dollar loss, something is fundamentally wrong.  And cutting spending is not going to produce a satisfactory solution.  For one, it will result in forfeiting $1.5 billion dollars in federal matching funds, doubling the real-world impact on Californians.  For another, it will not make up for shrinking revenues that will necessitate more cuts, and on and on.  I know that the Governor, and really the whole Legislature too, has a speech impediment where the word tax comes out sounding like the word fee.  But fixing the revenue side is unavoidable, and Sacramento is not a movie set.  Welcome to reality, Governor.

Finding the Money

Last night on Warren Olney’s Which Way LA?, which everyone should be podcasting, Dan Walters from the Sacramento Bee made a very interesting point about the budget that has been somewhat unremarked-upon to this point.  I’m not generally a fan of Walters, but it’s hard to argue with this.

The budget that passed the Assembly took $1.2 billion designed to go to transit and put it back into the general fund, with the reason given that the infrastructure bonds are financing transit improvements so there would be some duplication there.  That’s not what voters approved in November at all.  Not even close.  The infrastructure bonds on transportation were meant to be additional funds that the state could use to start new projects.  It was in no way meant to stand in for the regular finances received from the state regarding transportation.

So we now have a situation where bonds have been floated to finance existing projects and maintenance.  Is this a preview of things to come, a get-out-of-the-deficit-free card by using Arthur Andersen-style creative accounting tactics?  Voters approved those bonds because they wanted to see new mass transit options and new carpool lanes.  They did not approve an addendum to the state budget to solve the fiscal mess.

(We of course see this also in the cut to Prop. 36 funding for drug treatment in prisons, also approved by voters, which I guess doesn’t matter.  It’s a good thing nobody covers this state in the media, or there would be some howling going on)

My Thoughts on Arnold’s MTP Appearance

( – promoted by SFBrianCL)

I suppose the Republican Party is putting all of its eggs in the California basket, backing a guy who dishonestly ran pretty much as a Democrat, who also can never be President under current law and admits that no change on that could possibly happen in his lifetime.  I’ll bet actual conservatives are out there thinking “With friends like these…”

So it was that the Republican nation, and Tim Russert, turned its lonely eyes to Arnold Schwarzenegger on Meet the Press yesterday, hoping to glean some kind of knowledge on how to win again.  Judging from portions of the transcript and personal experience with California, apparently the way to win is to have millions more than your opponent, and run screaming away from any conservative policy there is.

MR. RUSSERT: George Lewis, who works for NBC News, did an analysis, and he talked about the specific issues that you focused on. And let’s look at that.  “Schwarzenegger did something that is unheard of in politics these days, he said, `I messed up. I was wrong.’ And he made a hard turn to the center politically and started working with the Democrats, who control the state legislature. … The new Schwarzenegger backs stem cell research. … He also favors a measure, that was written by Democrats, to increase the minimum wage here in California and to combat global warming. So the new Schwarzenegger is a moderate.” Is that fair?

GOV. SCHWARZENEGGER: Well, no, because I have always been a moderate. When I came into office three years ago, you and I talked about it then. I, I was, you know, promoting and pushing stem cell research then already, literally.  Like, I was not even in office when I was already out there campaigning for stem cell research. I think this is just a very important issue.

And we shouldn’t look at those issues as Republican issues or-vs. Democratic issues, or conservative vs. liberal. It is just-these are people’s issues.  We need to address those issues because I think that if we really promote stem cell research and fund stem cell research, I think we can find cures for very, very important-illnesses that so many millions of people are suffering from.  And I think that if it is-has to do with global warming, or if it has to do with raising the minimum wage, or if it has to do with lowering prescription drugs for vulnerable citizens-all of those things are people issues, not Democratic issues or Republican issues, and I think we were able to bring both of the parties together and accomplish all of those things.

Of course these are actually all issues that get near-universal support among Democrats, and near-universal disapprobation among Republicans, including those in Arnold’s own state legislature.  California’s State Senate and State Assembly Republicans voted for exactly zero of these proposals.  The notion that it’s now sensible and centrist to support core Democratic ideas is great news for national Democrats as a whole, and it’s simply silly for so-called “moderates” to suggest that this is where they were all along.  It’s not, and it took a “thumpin'” at the polls to get them to believe this.  It so happens that Arnold took his thumpin’ a year before Bush did, and so he saw the writing on the wall.  Without a special election, who knows?

By the way, Arnold AGAIN said that his 2005 Special Election initiatives were a big batch of “good ideas,” and since Russert probably had no idea what he was talking about, he let it go unquestioned:

MR. RUSSERT: And when you went to the people on four different voter initiatives and lost them all, and you took on the unions, you took on the Democrats, you said, “I made a mistake.”

GOV. SCHWARZENEGGER: Well, the mistake was not on what we were trying to do, because we need the reforms, and I think slowly we are seeing reforms happening in California. But what was wrong in-was the approach. To go and to say to the legislators, “I give you two months, and if you don’t agree with all of those things that I put on the table here in my State of the State address, then I will go to the people.” Well, the people really, you know, rejected that. They basically have said to us, “Don’t come to us with every initiative and with every idea. You fix it in the capital. That’s why we elect you, to go to the capital, and Democrats and Republicans work together.” And that’s exactly-we all got the message.

I’d like to see him try to bust unions again through “paycheck protection,” good idea that it is.  Or to decrease teacher’s job security.  Or to give himself carte blanche to line item the state budget.  I’d really like to see how those “good ideas” fly in the state legislature.  Of course, he’s going to use redistricting as the example, and it is a needed reform, though not in the manner he saw fit to implement in 2005. 

Meanwhile, on economic issues, Arnold continued to act like a lying supply-sider and leave the crucial information out of the answer.  Again, Russert didn’t challenge this astonishing bit of ju-jitsu:

MR. RUSSERT: One of the issues that are confronting you is the continuing deficit in California and also the six million uninsured, without health insurance. The San Jose Mercury wrote an editorial on Friday and said this, “While other states have been racking up surpluses and squirreling away money, California has run up deficits and piled on debt. That can’t continue. In the latest five-year forecast, the non-partisan Legislative Analyst’s Office projects a $5 billion deficit in the coming year and a $4 billion deficit the year after. … Now, something’s got to give – either Gov. Schwarzenegger’s vow not to raise taxes or his campaign pledges to fix health care and reform education. The latter should be the priority. He shouldn’t abandon promises on behalf of students and the [6 million] uninsured. … Schwarzenegger should swallow hard and consider taxes: either a dedicated tax, like raising the tobacco tax, or a temporary tax. … [Another] option worth exploring: expanding the sales tax to include some professional services in exchange for reducing the sales tax rate.” How do you juggle that?

GOV. SCHWARZENEGGER: Well, Tim, when I came into office, they said exactly the same thing: I got to raise taxes, I got to raise taxes, please raise taxes by at least 5 billion or $8 billion a year. And I said, “No. We’re going to stimulate the economy,” and that’s exactly what we’ve done, we’ve stimulated the economy. Now our revenues went up by $20 billion, first from 76 billion to $96 billion without raising taxes. That is the way to go. I think what we have to do in the future is, is we’ve got to go and pay down our debt, which we have been doing. And we have done a tremendous job of bringing down the structural deficit from $16 ½ billion when I took office to now $4 ½ billion. And we’re going to come down further this year and we’re going to eliminate it by next year or the year after that. I think that’s what we need to do. Never raise taxes, it wouldn’t happen. The people of California have voted “no” on all the tax increases this year, if it is the tobacco tax, if it is any kind of additional tax, everything was voted no on, including the nurses, as you remember, the nurses’ association, they have had a proposition on there to raise taxes, everything was voted no, including, including the oil tax.

You borrowed billions and billions of dollars.  That’s it.  To the extent that the structural deficit is “fixed,” which it isn’t at all, the only reason is the continued borrowing of money to finance current project.  The birth tax on Californians is astronomical.  And somehow, Russert lets him wriggle off the hook with this dishonest, ridiculous answer.  Also unmentioned is the fact that most of the “increased revenue” came in one-time tax amnesty payments from corporations who simply refused to pay their bills, a gambit largely executed by Democratic gubernatorial candidate and State Controller Steve Westly and Democratic gubernatorial nominee and State Treasurer Phil Angelides.  If corporations were made to pay their taxes to begin with instead of being bailed out by “amnesty” payments, we wouldn’t be anywhere near where we are today.  Instead we’ve financed the debt through continued borrowing, all of which goes completely unmentioned.  Indeed the entire infrastructure bond scheme, which he touts the whole interview, is a gigantic bond issue.  Arnold is so eager to please that he’s kicked the can down the road on any hard choices that need to be made for the state, and the people have willingly followed him.  That’s why no taxes were approved but all bond measures were.  He’s got people believing that borrowing is magic.  It’s not.  Eventually you have to pay the investors off, with interest.  I expect ordinary people to be self-interested, and eschew additional taxation, but approve bonds in order to put questions of debt out of sight and out of mind.  I don’t expect anyone who calls him or herself a leader to do the same.  It’s political cowardice.

Arnold’s going to come hard after a health care compromise this year, as well as prison reform and redistricting.  He’ll probably pick one big thing a year and run with it until his term ends, at which point he’ll try and challenge Boxer in 2010 (he didn’t deny the rumors to Russert).  As long as we have Democratic leaders in the State Legislature who take bribes from telecom companies, he’ll probably be able to steer this course.  And certainly he’ll get nothing but big pats on the rump from the media.  This is quite the problem for the state, because clearly those of us who live here will pay for this faux-moderation with a dysfunctional debt for decades, as well as naked attempts to stifle the voices of working people and all of the other “good ideas” contained in his twisted vision of “bipartisanship.”

California Blog Roundup for August 4, 2006

Just in time for the weekend, today’s California Blog Roundup is on the flip. Teasers: Phil Angelides, Arnold Schwarzenegger, Jerry McNerney, Paid-For Pombo, 15% Doolittle, Dan Lungren, Republican corruption, Proposition 89, Proposition 90, minimum wage, infrastructure bonds, prisons, global warming.

Governor’s Race

Jerry McNerney / Paid-For Pombo / CA-11

Charlie Brown / 15% Doolittle / CA-04

Other Republican Paragons

Propositions

The Rest

California Blog Roundup, 5/8/06

Today’s California Blog Roundup is on the flip. Teasers: infrastructure bonds and the governor’s race, just the governor’s race, CA-50, CA-04, CA-11, immigration, CA-45, auto insurance, levees.

Infrastructure Bonds

Gubernatorial Race

CA-50

15% Doolittle / CA-04

Immigration

Paid-For Pombo / CA-11

The Rest

California Blog Roundup, 5/5/06

Today’s California Blog Roundup is on the flip. Teasers:Infrastructure Bonds, Governor’s Race, Immigration, 15% Doolittle, Paid-For Pombo, LA-area Assembly Races, some cynicism, Latinos as a power, labor, and some pictures.

Infrastructure Bonds

Governor’s Race

Immigration

CA-4 and CA-11

Everything Else

March 16, 2006 CA Blog Roundup

Californa Blog Roundup for March 16, 2006

All on the flip…

That’s it for today. Use the comments to let us know of other bloggy California goodness.