As the Governor has tried to hijack the budget crisis to serve his own ends of punishing union workers and shredding the social services net, over the last couple days we’ve seen Democrats fighting back.  For example, Dean Florez surgically took apart the Governor’s idiotic smear attempt on legislators for doing their job of legislation.  Considering that the Governor has never invited all 120 lawmakers into his smoking tent for a pow-wow, I think there’s room for multitasking here.  But understanding that would involve basic knowledge about how government works, as Florez said:

Assembly bill 606 creates a commission to serve the marketing interests of the blueberry industry. Another bill defines “honey” to mean the natural food product resulting from the harvest of nectar by honey bees, and a third bill adopts regulations establishing definitions and standards for 100-percent pomegranate juice.

“Look, we’re pro-condiment, we’re pro-fruit, but the focus needs to be on the budget crisis,” McLear said.

Senate Majority Leader Dean Florez (D-Fresno) called Governor Schwarzenegger’s criticism “childish” and said he is fed up.

“The governor’s turned from an action hero into just another politician,” Senator Florez said. “He should really, really take a course on fundamental government on how the legislature works.”

“The fact that he doesn’t understand these things worries me,” he added.

Asm. Nancy Skinner held a press event with small business owners, again using the imagery of Arnold Antionette smoking a stogie in his Jacuzzi to contrast with the state’s struggles:

Skinner called a news conference at the corner of Solano Avenue and The Alameda in Berkeley, outside the vacant storefront formerly occupied by A Child’s Place. Near her podium was a poster of Arnold Schwarzenegger with a cigar in his mouth, with the headline “While the state drowns in IOUs ARNOLD DOESN’T CARE” and featuring a quotation from this past Sunday’s New York Times Magazine article on the governor’s method of coping with the stress of the budget crisis: “I will sit down in my Jacuzzi tonight. I’m going to lay back with a stogie.”

Skinner said that’s pretty cheeky talk for a governor who nixed bills that would’ve helped solve the state’s cash crisis, avoided the need for the IOUs now going out and kept the deficit from growing by another several billion dollars. And it’s particularly distasteful, she said, to small businesses that are struggling through this recession even as Schwarzenegger proudly talks about vetoing a plan to collect sales tax from large online retailers doing business through California-based affiliates.

You can debate AB 178, the plan to collect sales tax on affiliate sales (I don’t sell enough in affiliate sales to have much skin in the game, but there are decent arguments on both sides), but aligning with small business to attack a supposedly business-friendly Governor has good optics.

For the wonks, the Assembly produced an analysis of the Governor’s so-called “reform” agenda, showing that most of it would be completely irrelevant to the current budget year, and all of it uses math that magically eliminates implementation costs but assumes outrageously oversized savings years down the road.  These are cuts to social services pretending to be reform.  I guess it’s a step up from completely eliminating programs like CalWorks, but it’s fundamentally dishonest.

Moments after the Governor’s press conference yesterday about CalWorks “reform” (fact-checked here by the CBP), welfare advocates held their own press event that made most of the news items:

“I’ve never liked when people pick on the poor because they haven’t got the ability to fight back,” said John Burton, the state Democratic Party chairman and former Senate leader known as a fierce advocate for the poor. “It’s a Republican syndrome. It isn’t tough for Republicans to beat up on poor people. When finances are terrible, they go after the poor and blame the poor. Republicans constantly use that and don’t worry about all the benefits government gives to businesses.” […]

Welfare advocates countered that nearly two-thirds of recipients are working or participating in training, and that half are making some kind of income. They also said that the governor’s own May revised budget proposal estimated an annual savings of $100 million with that reform.

“He’s reinforcing negative stereotypes and scapegoating people for the failure of his own administration,” said Frank Mecca, executive director of the County Welfare Directors Association of California. “It’s a reflection of a bully mentality, to go after the problems of struggling families when he doesn’t get his way. The last thing those families need is to have a powerful figure accuse them of fraud, of not trying.”

Furthermore, the CA Democratic Party has collected budget horror stories to highlight the human cost of the crisis.  Here’s one picked at random:

I am on Social Security Disability and with the amounts allowed to get SSI having been cut, it has also cut my income. Also, my medical coverage is being hit as well as so many of the social programs all of us depend on. Fortunately, I am not homeless yet, but it is a good possibility. I just do not understand how you could make all Californians suffer, especially those of us who are very low income, in favor of giving a huge tax break to oil and tobacco. This is not just or right and I believe that the solution is to sign the compromise bill, and tax the big corporations that are not now paying their fair share! – Christine, Victorville

The structural barriers in the state are so high that I’m not sure any of this can work.  One thing is certain, however – this aggressive strategy creates energy in the grassroots, inspires changes to the system and can leverage public opinion far better than desperately seeking some compromise behind closed doors.

We’re hearing that there could be a budget vote as early as tomorrow, although with the Big Five meeting today, that doesn’t seem physically likely, and the AP says no deal has been reached.  Nevertheless, according to Greg Lucas:

Allegedly the spending reductions – and tax increases – have been agreed to and the focus of continuing budget talks is the shape of the so-called “economic stimulus” legal changes sought by Gov. Schwarzenegger and his GOP allies.

Those changes, such as relaxing state environmental review of less than a dozen highway projects and allowing more outside engineers to design such projects, having been a sticking point for the Republican governor since last year when he criticized – and this year vetoed – a Democratic budget plan for not doing enough to boost the economy.

The new taxes are said to include a half-cent boost in the sales tax, which generates roughly $4 billion annually, and a return of vehicle license fees to 2 percent of a vehicle’s value. At 2 percent, the license fees, much of which are deductible on federal taxes, would generate $6 billion in new revenue for the state – and increase over time.

Returning the VLF to a historically consistent number would be poetic for a failed governor who based practically his whole campaign on reducing it and breaking the state in the process.  

What happens in between the taxes and the spending is going to be a key.  Whether the GOP is fighting old battles by trying to invalidate past environmental laws, or whether they are demanding a state spending cap, those details matter.  Dan Walters thinks that a “carefully written spending cap with realistic emergency provisions” could work in a swap for eliminating the 2/3 budget requirement, but when you’re adding emergency measures and writing it so carefully, you might as well raise enough revenue to pay for services people desire and be done with it.  Spending caps don’t work.

In the meantime, while these details are hashed out, citizens are paying the price, as this week California begins to stiff creditors and defer payments to individuals and businesses.

Wendy Hansen, a 52-year-old single mom in Monrovia, says she cannot afford a delay in her anticipated state income tax refund of $1,800.

Without the check, Hansen said, she will have to put off debt payments, long-needed repairs on her house and treatment for a back problem that she believes has been aggravated by stress over finances.

An estimated 2.7 million Californians expecting income tax refunds this month won’t receive them for now, because the state’s prolonged budget impasse has emptied its treasury.

“It’s horrendous,” said Hansen, an office manager for a doctors’ office. “I’m someone who counts on that refund every year to make ends meet.”

This will disproportionately hit those how make too little money to owe taxes and expect their entire withholding to return to them, as well as those expecting public assistance payments.  In other words, the least of society.

Who in Sacramento will speak for them?

I just heard Will.I.Am on NPR talking about education cuts in California.  The budget crisis has gone mainstream.  And once everyone gets the news that tax refunds, welfare checks and student grants will be suspended because the state is out of cash, a whole lot of other people might get some awareness as well.  The dirty little secret about “liberal bastion” California is that we are not a civically engaged people, generally speaking.  The budget has been in “crisis” for decades but not enough Californians have mustered up the interest in it.  We have right-wing astroturf movements that play to base emotion, but not really citizen’s movements that ask for basic fairness.  Californians are 45th in the country in volunteering, 44th in attending community meetings and 45th in working on community problems.  Chalk it up to traffic or self-absorption or what have you, but the general take is that Californians don’t see much beyond what is in front of them.  IOUs would change that.  Well, maybe.  It depends on if the banks will accept them, which is still being negotiated.

The payments to be frozen include nearly $2 billion in tax refunds; $300 million in cash grants for needy families and the elderly, blind and disabled; and $13 million in grants for college students.

Even if a budget agreement is reached by the end of this month, tax refunds and other payments could remain temporarily frozen. Chiang said a budget deal may not generate cash quickly enough to resume them immediately […]

State officials have already designed an IOU template, Chiang said, and have been negotiating with banks over whether taxpayers could cash or deposit them if they are issued. The state could be forced to pay as much as 5% interest on delayed tax refunds if they are not paid by the end of May, Chiang said.

The last time the state issued such IOUs — the only time since the Great Depression — was in 1992.

In other words, the only way this delayed tax refund is going to work is if it causes MORE debt for the state.  But let’s go back to 1992.  This was the last big recession in the country, and California again found itself unable to pay its bills.  Tell me again how the budget problems aren’t structural.  Anyway, the state issued about $350 million in IOUs that year, about 15% of what is being prepared today.  The process was not smooth:

IOUs have caused headaches for the state in the past. California issued $350 million worth of IOUs to 100,000 recipients in 1992 during a budget impasse between then Gov. Pete Wilson and the Legislature.

A four-year legal battle ensued after some workers had trouble cashing them. The dispute was settled in 1996 with some state workers getting paid time off for the inconvenience they experienced.

Beth Mills, a spokeswoman for the California Bankers Association, said individual banks statewide haven’t decided yet whether they will accept the state IOUs this time.

Banks are barely willing to lend money, I just don’t think they’re going to be interested in accepting $2.3 billion in IOUs when the process was so difficult last time, and there is more uncertainty in the financial markets now.  And even if they do, it will not be uniform across all banks, and customers are going to have varying experiences.  

The State of the State speech that nobody watched proved the need for fundamental reform, but it generated barely a blip among non-elites.  Having trouble cashing your disabled mom’s assistance payment, that’s a whole different story.  Not to mention the fact that the continued erosion of jobs and the 5,300 public works projects that have been delayed by the state will create a lot of angry and idle minds.  Of course, the cautionary part of this is that the 1992 IOUs did not lead to structural reform.  However, we all can agree that this is a much bigger problem.

Pitchforks and torches may be at a premium.  And while it’s hard to write a new Constitution in a riot, something needs to shake up this decayed and dysfunctional system.

And those priorities are…

Leaving poor people on their own to die:

After holding up the state budget nearly a month past deadline, Senate Republicans offered Tuesday to end the impasse if Democrats would move tens of thousands of poor families off welfare and make dozens of additional program cuts.

The linchpin of the plan, Ackerman said, is a $324-million cut in the state’s welfare program. The cut was initially proposed by the governor in January, but Schwarzenegger had not been aggressively pushing for its inclusion in the spending plan adopted by the Legislature […]

Advocates for the poor were alarmed to see the governor’s January proposal revived. They said it would result in as many as 40,000 families losing state assistance.

… and ensuring that the planet continued to be destroyed by man-made causes:

Several Republican Party Senators have threatened to block the entire state budget unless the California Legislature accepts a recent polluters’ plea to ignore global warming pollution when assessing a project’s environmental impacts under CEQA. This “ostrich exemption” would allow polluters to continue sticking their heads in the sand, pretending that projects like oil refineries, freeways, and suburban sprawl simply don’t create greenhouse gases. It’s dangerously loopy logic, but if they can convince the Senate to play along, we could see California’s bourgeoning fight against global warming come to a skidding halt.

Hey, at least we know where they stand…