Just a précis on budget negotiations today: the Big Five leadership has met over the last couple days, with more heat than light.  The Governor remains committed to adding unrelated policy changes into any budget deal, items like changing contributions to public employee pensions, and tightening eligibility and rooting out fraud in programs like in-home supportive services for the disabled, Medi-Cal and Cal-Works.  These items will do nothing to affect the current budget numbers, a fact Schwarzenegger has acknowledged, but he continues to leverage the impasse to capture long-sought goals.  The Governor also has taken to lying about how these issues suddenly appeared in the negotiations, claiming that “reform issues were very clear” from the start, which is true if you define “reform” as “whatever Arnold wants it to mean.”  Karen Bass signaled her frustration with the Governor’s clear unwillingness to close a deal by inserting unrelated items, boycotting today’s meeting and questioning the Governor’s figures on what reducing “fraud” would actually reap in savings (and since he’s been consistently wrong on this front in the past, it’s a good bet).  The Governor did concede that suspending the Prop. 98 education funding mechanism would not be viable, but he keeps pushing for the amorphously defined “reform”, no doubt because he thinks it plays well with the public (Matier and Ross transcribe that private polls show a jump in Arnold’s approval ratings).  This speaks more to the Democrats’ inability to clearly explain reality than anything else, though Bass gave it a try today:

But Bass said she believes talks have gotten worse, not better. And she publicly blasted the governor for comments he made in Sunday’s New York Times Magazine, in which he said he explained why he doesn’t go home depressed by budget woes.

“Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger told the Times. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

“He said he’s happy to just go home and sit in his Jacuzzi every night,” Bass said Monday. “I’m very, very concerned about this. He doesn’t seem to be concerned that people are getting IOUs, and all he has to do is go out and blame the Legislature.”

With squabbling and posturing like this, you’d think I’d agree with the Calbuzz take of why this crisis has dragged on for so long.

The constitutional requirement for a two-thirds vote of the Legislature to pass a budget is clearly the single most important reason why the Capitol is in a state of near-permanent political gridlock. But the two-thirds rule has been around since the New Deal and budgets used to get passed. So what’s the hang-up?

Power: Nobody’s got it.

The governor and the Legislature fulminate and flounder simply because no one in the Capitol in 2009 has the stature, clout or influence to cut a deal like Ronnie and Jesse or Pete and Willie once did.

Actually, the budget has ALREADY been passed once this year, closing a $42 billion dollar deficit.  The new $26 billion dollar problem points to the unique nature of the current deep recession.  I’d like to see good ol’ Ronnie and Jesse and Pete and Willie deal with a $68 billion shortfall in the space of six months.

But beyond that, what is also missing from this analysis is the lengths to which the “big bully” theory of how to manage California government, where Democrats and Republicans get together and “cut a deal,” is in a real sense RESPONSIBLE for the problem we now face.  Take the assessment of the 1992 budget in the midst of a recession:

Contrast this year’s with the budget meltdown of 1992, the last time California issued IOUs. Although many of the same conditions applied, the big difference was that both Gov. Pete Wilson and Speaker Willie Brown wielded enough political authority to sit down in a room and cut a deal: Wilson took responsibility for rounding up Republican votes for tax increases and Brown for putting a lid on Democratic caterwauling over program cuts.

Somehow the inability of these major players to avoid a situation where IOUs had to be issued gets put to the side.  But what Willie Brown did not use that clout to do, what no Democrat has done since 1978’s Prop. 13 opened the structural revenue gap enforced by the 2/3 requirement for budgets and taxes, is actually solve the real problem.  Instead he  cut a deal, relying on a future asset bubble to bail him out again and again, and setting the table for today’s crisis.

The 1980s saw the construction of the model. Sprawl was used to provide affordable housing. Special tax systems were set up to pay for suburban schools – the 1982 Mello-Roos Act – which were funded as long as there was enough credit to sustain sprawl. The loss of property tax revenue led cities to shift toward retail, further promoting sprawl (big box stores, malls). The jobs and spending created by sprawl provided enough prosperity to keep voters happy and the politicians in power. For those who were left behind – those living in the city centers, people of color, and the poor – 1978 had been partly about their political and economic marginalization, and the majority of Californians embraced it as part of the deal.

The ideal feature of the centrist system, from the view of its practitioners, is that it apparently neutralized the right-wing revolt of 1978. Low taxes could be paired with preservation of core services, albeit at a slightly reduced level, and thereby avoided another Jarvisite outburst. Well-paid consultants could run statewide TV campaigns to force the public to accept the consensus, without having to do the messy work of engaging a grassroots that would challenge the centrist status quo.

When the system came crashing down in 1991-92, the centrists found it possible to cut a deal to keep things going. Pete Wilson and Willie Brown had much in common, and were able to hammer out a package of tax increases and spending cuts that got a 2/3 majority. I don’t romanticize that deal, but instead use it to show that it confirmed to the centrists that the system they’d built in 1980s could withstand crisis as long as everyone was willing to sit down and make a deal, damn the consequences.

However, the right-wing wasn’t sleeping. In 1990 they managed to convince a bare majority of voters to approve Prop 140, a radical term limits measure that should have fallen afoul of the “revision” rule. But the real moment of change came in 1994, when the far-right in the Republican Party grabbed control of the agenda and launched a massive attack on Latino Californians. Pete Wilson wholeheartedly embraced the attack, and although it brought Republicans gains that year, it was a victory to make Pyrrhus jealous. Latinos registered for citizenship and to vote in massive numbers, and beginning in 1996 what had once been a state whose politics were fairly balanced shifted massively to the Democrats.

As long as Republicans stood a reasonable chance of winning control of California’s legislature or its electoral votes, Democratic deal-cutting with Republicans could be sold to the base as a necessary move to stave off the Jarvisite hordes. But after 1996 this became less and less plausible. The California Republican Party became a captive of the extreme right, even more than usual, and in one of its last acts before leaving power in 1998, pushed through a massive and reckless series of tax cuts.

I don’t disagree at all that we currently face a lack of leadership and clout to get deals done in Sacramento.  Arnold Schwarzenegger has no role inside his own party, and Bass and Steinberg preside over a dysfunctional set of rule requirements and are term-limited out of gathering political capital.  My point is that such leadership has ALWAYS been lacking from the Democratic side of the aisle, at least since 1978.  When prosperity waned, it was clear that California’s political structure would resist responsible governance at every turn.  But instead of preparing for that eventuality by changing the rules, those good old boys of the past cut deals that exacerbated the problem.  They forced the current crop of non-leaders into ringing up the state credit card and enabled the right-wing faction that holds a veto over economic policies.  The center did not hold – but it could never hold.  And the centrists who ruled California in the years after Prop. 13, the timid types who ran away from real solutions and put the state in the position to fail, should not be lauded.  They should be ashamed.

I’m sure many political observers will laud this New York Times magazine article on California’s crisis and the men and women who seek to solve it, but I found it oddly pedestrian.  The profiles of the candidates reveal little of substance, and aside from displaying the salient fact that Arnold has no interest in the well-being of his constituents, I didn’t see the point.

“Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger said. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

Overall, I saw too much focus on personality in dealing with what is essentially a problem of process.

Actually, while I didn’t agree with all of it, I thought Gary Kamiya had a much smarter take, and it didn’t mention Arnold Schwarzenegger or the names of any of his potential replacements more than once.  The headline, “Californians are sinking themselves,” doesn’t seem to match the bulk of the article, which focuses on the dysfunctional governing process.

The immediate source of California’s financial problems is a lethal combination of ideology and rules. It is deeply politically divided, and its governmental mechanisms are completely broken. Bay Area leftists stare at Orange County conservatives across an unbridgeable abyss; a large and potent group of anti-government libertarians faces off against an equally powerful group of pro-tax, proactive government liberals. If California, like most states, required only a simple majority to pass its budget, the disagreements between these camps could be worked out; after all, the Democrats control the Legislature. But California requires a two-thirds majority, which gives the GOP, now dominated by anti-government, anti-tax ideologues, veto power over the process. The result is deadlock.

Compounding this problem is California’s notorious initiative process, which allows voters to bypass the Legislature and place initiatives directly on the ballot simply by gathering enough signatures. The initiative process was originally passed by voters in 1911 to circumvent the power of the oligarchic railroad trusts by restoring direct democracy. And it still offers citizens a chance to take control of important issues. But it has gone out of control, abused by powerful interests who hire people to collect signatures and ram through bills that no ordinary citizen can be expected to comprehend. By sidelining elected officials, it achieves the worst of both worlds: It gives ordinary citizens, who lack requisite expertise, institutional memory and accountability, too much power, and then forces legislators to clean up their mess — except that because of ideological gridlock and the supermajority requirement, they can’t.

Kamiya looks at the three strikes law and in particular Prop. 13, which he views as the ultimate manifestation of the Two Santa Claus theory, that California can have endlessly lower taxes with endlessly more social services.

This was, in effect, a mass outbreak of cognitive dissonance, an up-yours delivered to government with the public’s left hand, while its right hand reached out for Sacramento’s largesse. Now, 31 years later, the bill has finally come due. There is no free lunch. If you want good roads, parks, decent schools (California’s schools, once the best in the nation, are now among the worst) and adequate social services, you have to pay for them.

Out of this, Kamiya points his finger at the people who voted in Prop. 13 and failed to modify it over the ensuing 31 years, who are “self-centered” and have “not decided what it thinks about the New Deal, or government itself.”  They need to “grow up,” Kamiya says.

I think this ignores the fact that Californians have traditionally been offered precious few choices to rectify the broken system.  The Democratic Party essentially has made a pact with themselves to nibble around the edges for three decades instead of confronting the great unmentionable crisis of governance.  People see the dysfunctional politics play out year after year and become rightfully disaffected with the system.  And they are never told anything from anyone in a position of power to counteract the Two Santa Claus theory, and so they necessarily believe it.  I don’t blame citizens for responding to their leaders.  The problem lies with the leadership itself, or more to the point the lack thereof.

I was 5 years old and on the other coast of the country when Prop. 13 was passed, and I’m not about to bear the brunt of the blame for that decision.  I would blame myself if I continued to live with the failure of the political leadership to confront the root causes.  But Californians are starting to use movement politics to go around the leadership and force the necessary solutions.  The sheer enormity of the problem and the size of the state makes this a difficult option.  But the alternative, to acquiesce and wait patiently for the leadership to figure things out, is unthinkable.

You can almost set your watch by it.  The state budget picture is a mess, Democrats ask for a balanced solution, Republicans hold their ground and say no, Democrats don’t have the vote so they let it go.  It happens practically every single year, and it’s happening again, according to CapAlert:

Gov. Arnold Schwarzenegger and Senate President Pro Tem Darrell Steinberg said separately Thursday that they are optimistic a budget deal can be struck within several days.

The tone of their comments marked a stark contrast to Capitol fighting over the last few weeks between Democrats and Republicans over bridging the state’s $26.3 billion budget gap.

Steinberg also said Democrats had given up any attempt to increase taxes on tobacco or establish an oil severance tax […]

The Senate president said that Democrats no longer are pushing for a 9.9 percent tax on oil extraction or for hiking the state’s tobacco tax by $1.50 per pack.

“We would like to see an increase in the tobacco tax and the oil severance tax as a solution, but in this chapter that’s not realistic and it’s not what we’re holding out for,” Steinberg said.

It’s never going to be realistic in ANY CHAPTER.  Republicans know exactly how to play this game.  Their votes are needed for tax increases, so if they hang together they cannot lose.  The Democrats haven’t figured out how to shame the Yacht Party or make them pay for their votes, giving them no reason to do anything but hijack the process.  You’ll notice that as a result of this horrific experiment in governance, California is operating worse than practically every other state in the union.  

We’ve seen this kind of “it’s almost over” trial balloon on many occasions, so I wouldn’t put on the party hats just yet.  But somehow at the end of this process, somebody will step up to a microphone and claim how reaching agreement is a sign of success.  No.  It’s a sign of failure.  A failure to responsibly manage the state’s finances, reflected by the worst economy in 70 years.  The only lesson that can be learned from this process is that it’s fundamentally broken.

P.S. You’ll be thrilled to know that Schwarzenegger still sleeps well at night.

Schwarzenegger and I then repaired to a tent that he had put up in a courtyard next to his office, which allows him to smoke cigars legally at work (no smoking is allowed inside the Capitol). The tent is about 15 square feet, carpeted with artificial turf and outfitted with stylish furniture, an iPod, a video-conferencing terminal, trays of almonds, a chess table, a refrigerator and a large photo of the governor. Schwarzenegger reclined deeply in his chair, lighted an eight-inch cigar and declared himself “perfectly fine,” despite the fiscal debacle and personal heartsickness all around him. “Someone else might walk out of here every day depressed, but I don’t walk out of here depressed,” Schwarzenegger said. Whatever happens, “I will sit down in my Jacuzzi tonight,” he said. “I’m going to lay back with a stogie.”

This is the guy who dares to chide others for not doing their job.

So the Senate Republicans voted en masse against $11 billion in cuts as part of the budget proposal put forward by the Democrats today.  Lou Correa and Leland Yee voted no as well, and the final vote was 22-16.  Technically, I believe the bill could go to the Assembly, and after passage to the Governor, but Arnold has vowed a veto, so that’s probably out.  Meanwhile, California will start to use the reserve fund to pay bills for the next week or so, and failing a solution after that, will resort to IOUs, which basically was the deal back in February as well.  Yes, the Democratic proposal has its share of gimmickry, but no more than the Governor’s own plan, and considering the Yacht Party refuses to write a plan, ALL OF THEIRS is gimmickry, as is their entire ideology.  But the Yacht Party smells blood in the water, the Democrats have pulled their tax proposals off the table, and the future is incredibly uncertain.  

I cannot disagree with Greg Lucas’ analysis.

Examining the Senate’s budgetary actions of June 24 from a political rather than a policy perspective, the majority party Democrats may not have achieved their objectives […]

Judging from the remarks of Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, the intent of the exercise was to illustrate that Democrats are unwilling to cut as deeply into social programs as Gov. Arnold Schwarzenegger and to portray Republican lawmakers as obstructionist or hypocritical or both for not backing the cuts embraced by Democrats.

“Democrats are asking Republicans to vote for billions of dollars in cuts and apparently your answer today is ‘no,’ Steinberg said. “Why won’t you cut? Why won’t you cut?” […]

In a purely political sense, the “bad” vote is the one cast by Democrats, ostensibly champions of public education, who – if the February budget they backed is included – have chosen to reduce state support of schools by more than $12 billion over a two-year period.

Republicans can portray their “no” vote as a refusal to cut nearly $5 billion more from public schools.

Perhaps a more effective illustration of support for what Democrats call the safety net would be to bring several of the GOP governor’s more draconian proposals to a vote.

It seems unlikely Schwarzenegger’s call to eliminate California’s welfare program would garner the votes necessary for passage. Nor would the governor’s proposal to end state grants to lower-income high school students to help them attend college.

After rejecting those and possibly other gubernatorial proposals then a vote on the more modest – more humane – measure with $11 billion in cuts might more satisfactorily frame the issue.

I would argue that making these “symbolic” votes doesn’t do a ton of good unless you’re willing to use them in the context of the 2010 campaign (and I don’t remember votes coming into play in key districts in 2008) or in a coordinated and widespread media campaign immediately.  To the latter point, we don’t have any such media in California.  It’s a good argument in search of a broadcaster, and that goes for Lucas’ alternative solution.

The real problem is that Democrats don’t appear to have an endgame strategy, and haven’t for years.  The words “two-thirds majority” hasn’t exited anyone’s lips in quite a while.  This is a process problem, and only a process solution will suffice, and teachable moments like these have been wasted for 30 years.  

In the upside-down world of the California budget mess, the Senate President Pro Tem is now criticizing Republicans for their refusal to vote for cuts.

Senate Leader Darrell Steinberg wants to put Republicans on record today on two political questions: whether they can accept $11.4 billion in cuts that Democrats are proposing, and whether they will vote on $2 billion in new taxes.

On taxes, Steinberg conceded he is unlikely to win a single Republican vote when the Senate takes up the Democrats’ $23.3 billion deficit reduction plan. But that, he said, shouldn’t stop them from supporting his package of cuts, which will be voted on separately.

“If they’re going to stand on the argument that cuts are not deep enough and thereby not vote for $11 billion in cuts, then we have some issues,” Steinberg said at a news briefing next to his Capitol office. “It’s interesting. I’m getting a sense that Republicans are getting shy about voting for cuts. That would be an odd headline: Democrats urging Republicans to vote for cuts.”

Actually, it’s not an odd headline.  It’s the inevitable consequence of a broken political system where you need a simple majority to make cuts and a 2/3 majority to raise taxes.  Period.  

In this case, Steinberg can pass the whole budget, save $2 billion in oil and cigarette taxes, by majority vote, because this is not a budget enactment, but a revision.  If he doesn’t muster 2/3 for the cuts, however, the revision will be delayed 90 days, reducing the effectiveness of the cuts by roughly 1/4, and forcing additional solutions to fill the deficit later.  Even when mostly cuts are on the table, Republicans are using the leverage of undemocratic supermajorities to force more cuts.

Here’s Zed Hollingsworth playing dumb that all he wants is a comprehensive solution.

“We’re willing to vote for the cuts that provide for a complete solution,” said Republican leader Dennis Hollingsworth, R-Temecula. “We’re not willing to vote for a partial solution that has us coming back in the spring having to find more revenues when another calamity hits. We’re not interested in political gamesmanship.”

No, the Yacht Party would NEVER be interested in political gamesmanship, perish the thought.  They’d never want to try to send the state into bankruptcy to make a political point or anything.  By the way, Zed, news flash: you’ll be back in the spring.  The projections from the Legislative Analyst have consistently fallen short of reality, and no matter how big a budget reserve gets baked into this new budget, you can bet dollars to donuts it won’t be enough, especially considering the potentially accelerated Depression that additional cuts to the social services net will force.  The Anderson Forecast estimates 64,000 government jobs lost from this round of budget cuts.  Even in Dan Walters’ world, that’s a significant chunk.

My problem with the Democrats on this is mainly their insistence on working within a broken system.  They miss every opportunity to put the failed governmental structure on trial.  Something as absurd as Republicans voting against program cuts – to ensure MORE program cuts – defies belief without an explanation of how it’s a symbol for a bad process that must be fixed.  The goal of this budget, which was never going to be pretty regardless of the May 19 election, should have been to heighten that reality.  

Dan Walters is touting a UC Riverside poll on budget issues that interviewed 276 respondents, 63% male, with a 42-38-11 split among Democrats, Republicans and independents.  He does this with a straight face.

It barely matters what such a flawed poll shows, but I’ll mention it anyway.  According to 276 people, 57% support the 2/3 requirement for passing a budget, 24% preferred a simple majority, 6% in between, 4% other (?), and 6% don’t know.  Given the bad methodology, these numbers mean nothing.

But I’ll tell you who has historically taken numbers like these as the gospel’s truth and used them to mute themselves about any reform efforts for thirty years.  That would be the leaders of the California Democratic Party.  And they latch on to any poll numbers showing a view like this as a blunt instrument to kick hippies, not a starting point for the political advocacy and opinion leadership that can and should be done to change perspectives.

Here’s the problem, in a nutshell.  In 1978 California passed Prop. 13, and Democrats have run for cover ever since.  They should have put up a fight immediately.  But instead, Democrats cowered in fear of losing power, despite the demographic shifts in the state since the mid-1990s, so they lay low and never advocate for the necessary reforms, and buy completely into the myth that the 70’s-era tax revolt remains alive and well, and they take public opinion polls like this as static and unchangeable through anything resembling leadership.  Obviously Republicans are insane in this state, but they can barely manage 1/3 of the legislature (and if we had a half-decent campaign apparatus among California Democrats they’d lose that too) and shouldn’t be feared in any respect.  Yet our Democratic leadership exists in a post-1978 fog, a kind of “Sacramento Syndrome,” where they’ve come to love their captors on the right, and have bought into their claims.

Meanwhile, the David Binder memo, with ten times the poll respondents and a clear majority favoring a broad swath of tax increases over spending cuts to deal with the deficit, goes unmentioned by virtually everyone in this state.  And in that desert, voters go vainly on a futile search for leadership.  They find nothing but shell-shocked politicians.

…As if on cue, view for yourself the craptastic “Post-Budget Reform Push” press release Assembly Speaker Bass just dropped.  You’ll be thrilled to know that your state government will be more “user-friendly” when leaving AIDS patients and the poor to die on the streets.  You can almost smell the fear coming off this press release (on the flip):

BASS LOOKS TOWARD POST-BUDGET REFORM PUSH

SACRAMENTO-Assembly Speaker Karen Bass (D-Los Angeles) today announced the California Assembly will begin preparing information and analyses on ways state government can better serve Californians.  The move is in advance of a joint Assembly-Senate government reform effort expected to begin in July following passage of solutions to the state’s budget deficit.

Bass released the following statement regarding the effort:

“As the Budget Conference Committee continues to meet and we work to resolve the state’s budget deficit, Senator Steinberg and I are also looking ahead to developing a bicameral, bipartisan, back-to-basics approach to reform what is wrong with California’s system of government.

The following are examples of goals this effort could include:

Making government more customer-friendly.

Giving Californians more value for their tax dollars by making government more efficient and accountable.

Cutting through the gridlock caused by outmoded rules and undue partisanship-gridlock that only leads to late budgets and last minute decision making.

Consolidating agencies and functions so they make sense and save money.  Not just blowing up boxes, but also folding, stacking and storing others more efficiently so the ones we need fit the room we have for them.

Building on the upcoming recommendations of the bipartisan Commission for a 21st Century Economy so our revenue system makes more sense.

Making government more transparent and accessible from around the state.

The Assembly will immediately begin compiling a wide variety of ideas, information and input on these areas.  This way the bicameral reform effort will have the resources and data they need to move forward quickly and effectively with a lot of the necessary groundwork already out of the way.

We will also be looking at ways to involve outside experts and stakeholders, as well as increase public participation in the reform process.

Senator Steinberg and I have been talking frequently about this, and I know he and his team are making similar headway in the Senate. I look forward to sharing our collective information and working together to help give Californians the government they deserve.”

 

George Skelton has a punishingly absurd column today.  He has in the past recognized that Prop. 13, and more importantly the Trojan horse of the 2/3 requirement for revenue hikes embedded inside it, has foisted much of the problems upon the state that it now faces.  He recognizes that again here.  But he then goes on to suggest that Arnold Schwarzenegger should take the attitude of “born-again tax cutter” Jerry Brown and treat our current “tax revolt” (which he takes as gospel from the results of last week’s special election) by slashing services for all manner of struggling Californians.  Skelton hints at a tactic of merciless cuts as a means to show the public the painful reality of Howard Jarvisism, but really he just sort of agrees with the conventional wisdom, which he plays a role in setting, that the voters rejected tax increases of any kind and now the Governor must do the serious thing of cutting all manner of state spending.

Let’s take a look back in time and be clear about who’s driving this conventional wisdom.  California’s political observers have been stuck in a post-June 1978 mindset for the past thirty years, scared to death of the terrifying spectre of Howard Jarvis, himself a bundle of contradictions.  He was a Mormon who drank vodka.  An anti-government crank who nonetheless ran for US Senate and Mayor of Los Angeles.  A supposed defender of homeowners when at the time of Prop. 13 he was employed by the Los Angeles Apartment Owners Association.  Jarvis was a liar and a fool.  In the ballot argument for Prop. 13 in 1978, he claimed that school funding would not be affected by the amendment, and responded to the possibility of library services being cut by saying that “63 percent of the graduates are illiterate, anyway.”  He had a disdain for the average Californian, and probably took up the mantle of property tax revenue caps after seeing his home at 515 North Crescent Heights Boulevard in Los Angeles increase in value from $8,000 to $80,000 in 35 years.

Prop. 13 addressed one specific problem – property tax assessments were growing faster than wages.  But grafted onto the measure designed to slow down that growth were a series of proposals – shifting the balance of power from local to state government, capping commercial property with residential, and establishing the 2/3 requirement for revenue – that have gradually but steadily eroded the quality of life that previously made the state the envy of the nation and the world.  In 1978 the state had enough of a surplus to paper over the immediate effects of Prop. 13.  The measure was practically designed to drain that, and put an end to effective governance in the state.  Today, businesses and homeowners benefit from public investment in infrastructure – sewers, roads, electrical lines, freeways, mass transit – without having to contribute to the improvements.  And to get a true sense of how that attitude of, basically, selfishness, can be traced back to Jarvis himself, read this flashback from the 1979 budget crisis, and the anti-tax champion’s march on Sacramento.

Into the volatile political atmosphere parachuted Howard Jarvis, the irascible co-author of Prop. 13 and the cranky embodiment of the tax cut movement. Jarvis and his posse came to Sacramento on June 7, the one-year anniversary of the measure; 30 years later, the episode offers a look back in time at some hints of what was to follow.

Jarvis, a burly and profane spud of a man, had come to deliver 150,000 computer-generated letters sent by tax-cut supporters to warn the Legislature, “We’re not going to let anybody get away with a new plot to circumvent Proposition 13.”

One target of his ire was Assembly Bill 8, which radically restructured California’s system of public finance and sent $5 billion from Sacramento to local jurisdictions. Still in effect in 2009, it cast the framework for many of today’s structural budget problems, by putting the state in the permanent business of financing schools, cities and counties.

Surrounded on the east steps of the Capitol by dozens of boxes containing the letters, Jarvis accused then-Speaker Leo McCarthy of a “plot” to undercut Prop. 13, and got into a beef with a reporter who asked him to be specific about the alleged conspiracy.

As a daily report of the incident had it: “Jarvis snapped angrily: ‘I’m not going to list all of them. I don’t carry the bill numbers around in my pocket.'” […]

As Jarvis spoke, a group of mothers who’d come to Sacramento to lobby for more spending for pre-schools began shouting at him: “What about the schools? They’re ending programs to help,” a woman from Azusa hollered.

“That would be your problem, not mine,” Jarvis yelled back. “It’s absolutely not so. Prop. 13 didn’t have any effect on the schools at all.”

Jarvis then walked into the Capitol, where he and his backers dropped off boxes of letters in legislative offices. All went well until he called on Assemblyman, later Congressman, Doug Bosco, who was meeting with a county supervisor and three fire chiefs from his district.

“We were discussing why there isn’t enough money to put out the fires,” Bosco said later. “In walked Howard Jarvis and I said, ‘Good, you can explain it to them.'”

“Jarvis insisted that reduced property tax revenues allowed by Proposition 13 were more than sufficient to finance essential services,” a future Calbuzzer reported. “When the chiefs asked Jarvis what specific cuts he proposed, he told them, ‘that’s up to you,” which set off “a heated exchange that lasted 10 or 15 minutes before Jarvis left…in a bit of a huff.”

“A short time later, Jarvis wandered by Governor Brown’s office, where he received a considerably warmer reception.”

Howard Jarvis had no interest in governing and even less interest in people.  He treated budgeting only in the abstract, without detail and certainly without any projection of a human face on the consequences of his actions.  He was a miserable, selfish old coot.

Only in California can this man be transformed from guy-shouting-at-the-end-of-the-bar status into a figure worthy of any respect, both by politicians like Jerry Brown and the political media.  The assumption is that he led this grand movement that persists to this day, but his stature only remains because so few dared to challenge him on the basic facts.  We have a government with the structural architecture of that selfish old man, but a population that simply doesn’t think that way.  Yet nobody has the courage or the leadership to actually point out that architecture, the main stumbling block to returning California to anything approaching fiscal sanity.  Howard Jarvis, like a headless Ozymandias statue surveying a wrecked land, became a king because of the vacuum of leadership into which he stepped.  His reputation is unassailed, and we are all poorer for it.

Paul Krugman actually understands the nature of the crisis here in California, and he writes about it today.

Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is – and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.

It’s a key point.  Without the insanity of Prop. 13, making revenue so unstable and volatile from year to year, and completely inequitable, locking in older homeowners while increasing the tax burden on younger ones, the crisis would be as manageable as other states.  Without the Trojan horse of the 2/3 rule for taxation snuck in through Prop. 13, the tax structure would not become the hideous, mangled beast we see today, where the effective tax rate is higher for the lowest-income Californians than for those with the highest income.  And without the growing extremism of the Yacht Party, where anyone who breaks Grover Norquist’s pledge draws an effort to drum them out of the party, perhaps Sacramento would be populated with public servants who want to fix the problem instead of break it.

Krugman’s point is to sound a warning bell for the nation at large, to view the problems of obstruction and dysfunction at the state level with a wider lens.  He explains that Republicans have “been driven mad by lack of power,” with the extremist rump faction predominant.  But even then, he gets that California’s problems are unique.

So will America follow California into ungovernability? Well, California has some special weaknesses that aren’t shared by the federal government. In particular, tax increases at the federal level don’t require a two-thirds majority, and can in some cases bypass the filibuster. So acting responsibly should be easier in Washington than in Sacramento.

But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?

It’s a sad commentary, when the finest liberal columnist in America basically reassures his readers that no government could possibly be as ridiculously constructed as California’s.

Via OC Progressive, Assemblywoman Noreen Evans, Chair of the Budget Committee, spells out slowly for everyone the structural problems and false assertions about the California budget process.  If you have non-political junkie friends who want to understand this in a quick and easy way, pass them this link.

This is a very good place to start.  Evans puts the lie to three big myths about California:

1) The “runaway spending” assertion.  Um, no.  Population and inflation accounts for 68% of the increase.  I LOVE how Evans cites the tough on crime sentencing laws as a key element of over-spending, in this case on prisons (20% of the inflation and population-adjusting spending increase).  Ballot-box budgeting with no dedicated funding stream (separate from the initiatives voters stopped lawmakers from raiding yesterday, which have funding sources) also contributes to the problem.  And there are the prior tax cuts like Prop. 13 and Arnold’s VLF cut (which would have filled this ENTIRE current deficit).  To cover for this we sell bonds and now have to pay out interest to service that debt.  The problems beget more problems, and necessitate more cuts because the conservative veto resists taxes.

2) There’s all these “waste” in the budget.  Again, no.  The Performance Review of 2004 found virtually nothing that would save the state any real money.

3) It’s just all that messy partisanship from both sides.  No.  The Democrats have made $40 billion in cuts over the past several years.  The Norquistian Yacht Party won’t budget because they don’t have to.  Evans details the 2/3 requirement and the conservative veto, and cites Norquist himself!

Seriously, pass this to your friends.  Facebook it and Twitter about it.  If you internalize these concepts, the solutions are obvious – we need to restore democracy and give our elected officials a budget process and a Constitution they can actually navigate.

And while we’re at it, let me debunk one other myth.  The one that says all California has to do is sell San Quentin and all that surplus property and save the state.  Well, the money raised from selling state property would not be able to be used to balance the budget.

Under the terms of Proposition 60A, approved by voters in November 2004, proceeds from the sale of any state surplus property can only be used to pay the interest on $15 billion in budget-balancing bonds sought by the GOP governor and approved by voters in March of the same year.

Once the bonds are paid off – the Legislative Analyst estimated at the time that cash from the sale of surplus property would speed retirement of the 30-year notes by a “few months” – sale proceeds would be deposited in the state’s reserve account for emergencies.

Oops.

George Lakoff writes today that this could be a moment of freedom for California Democrats.  Their compromised ballot measured having gone down in flames, they can now focus on the only solution to what ails the state: democracy.  They can include in every public utterance until the moment the 2/3 rule is repealed the theme that California’s democracy is broken, and that we must restore it with a majority vote for budget and revenue matters.  The time for half-steps and non-fixes must be over.

Up to now, Democrats have been acting like sheep being herded by the Republican minority. They need to show courage and stand up for what they believe. That’s what the voters are waiting for […]

Get rid of the 55% proposals. People understand that majority rule means democracy. 55% means nothing.

Even if you don’t address taxes and just address the budget process, the Republicans will still say you’re going to raise taxes. You may as well go for real democracy.

And finally, get a unified message that can be supported by the grassroots. Do grassroots organizing for 2010, starting now. Organize spokespeople to get that message out. Organize bookers to book your spokespeople in the media. You Democrats are a majority. Act like it. The public will respect you for it.

Unfortunately, Darrell Steinberg and Karen Bass failed the first test, stuck in a mindset that will bring the state to ruin.  First, Steinberg.

“The voters have spoken and they are telling us that government should do the best it can with the money it has. We will immediately and responsibly get to work to balance the budget and head off a cash crisis in July. Delay is not an option. The necessary decisions we must make will only get harder with time.”

That is not what voters are telling you. As I said yesterday, you cannot reconcile the supposed anti-tax fervor with the passage of a transient occupancy tax in conservative Palmdale with 64% of the vote.  California is a big state and no one message from a statewide election can predominate, but the mass boycott of the polls certainly suggests that we don’t want to do your job anymore.  I know it’s been so long since Democrats exercised their Democratic muscles and principles in Sacramento, but this election called out the political leadership for failed governance.  And everyone who has studied this for half a second understands that the failure will continue until the structural barriers are removed.  And so making this absurd and vindictive statement about voter intentions both misses an opportunity to refocus the discussion and angers the grassroots further.  

Here’s Bass:

“There are many difficult choices and a lot of hard work ahead of us.  We now have to responsibly fill the budget hole that has been caused by the national recession and deepened by the failure of today’s ballot propositions.  I hope the bipartisan cooperation between the Legislature and the Governor that went into this effort will continue as we move forward – the people of California clearly expect us to work together to get the job done.  And we will.

The people of California could give a rat’s ass who works together with who.  They don’t want to see this level of dysfunction anymore.  Bipartisan cooperation was clearly rejected last night, because inevitably that gives leverage to the minority and provides unworkable non-solutions.

Where is the argument for DEMOCRACY in these statements?  Since 1978 that democracy has crumbled and needs to be completely rebuilt.  Everyone knows this but refuses to say it out loud.  This is why the legislature and the Governor have historically low approval ratings.  People are starved for actual leadership and see none.  Only democracy will save us.  This failed experiment with conservative Two Santa Claus Theories has now become deeply destructive.  Because the democrats have provided no leadership and ceded the rhetorical ground, California public opinion holds the contradictory beliefs that the state should not raise taxes and also not cut spending.  And if it persists without leadership and advocacy to the contrary, nothing will change.