It’s amusing to see Arnold Schwarzenegger flip around on the budget, caught between his reckless Yacht Party compatriots and Democrats looking for sanity in the revenue structure.  And so we get the Guv signing off on an education report that would spend $10.5 billion on universal pre-school and increased teacher pay, at the same time putting forward a budget which proposes deep funding cuts in education and has led to school boards distributing pink slips around the state.  There has never been any coherence to Schwarzenegger’s rhetoric, but this is bordering on a Jekyll-and-Hyde scenario.  I mean, taking the mantle of the green governor and promoting nuclear power is just schizophrenic.  But saying that you back billions in education spending while eliminating massive amounts of education spending is grounds for institutionalization.

And nobody’s really buying his “all things to all people” act any more.  This is from an event in Fresno:

Schwarzenegger met with members of the Council of Fresno County Governments, which includes elected and law enforcement officials from the county and its 15 cities. The governor is scheduled to be in Riverside today.

“There were two different things going on in the room,” Fresno County Supervisor Henry Perea said. “He was telling us what we already knew,” that the state budget faces a huge shortfall, “but folks were saying, ‘Don’t cut my programs.’ “

There is really a moment for the Democrats to offer an alternative option.  It’s doing to be distorted through the lens of corporate media, but at the grass roots level, parents and students and teachers know exactly what the choices are, and that’s the key.  It’s going to be a long fight, and expect education and crime issues to take the lead (“How can you take cops off the streets?”), but the essential truth is that residents of this state expect the best of themselves and their society, and aren’t going to settle for an artificial constriction built on failed conservative ideology.

Yesterday I noted how the Governor is trying to lower the Medi-Cal rolls by increasing the paperwork for enrollees and hoping that they’ll get tripped up by the process.  This is officially a trend.

Midnight on March 1 — Saturday — recently became the deadline for students to apply to seven Cal State campuses that traditionally accepted applications months later. An even earlier deadline, Feb. 1, has already passed for 16 other Cal State campuses

The root cause of the time crunch is a multibillion-dollar state deficit. In his provisional budget for next year, Gov. Arnold Schwarzenegger set Cal State’s share of reductions at $386.1 million. If that figure holds, schools have much difficult budget-cutting ahead. As a precaution, Chancellor Charles B. Reed limited the number of students by shortening the application period.

“An effort was made to try to slow down what was otherwise going to be a record year in enrollment,” said Jim Blackburn, director of enrollment management services in the chancellor’s office. Blackburn did not know of another time when Cal State sought to curtail students in this fashion. He noted, however, that campuses frequently stop reviewing new applications when they reach enrollment thresholds. The priority application period ended Nov. 30, which was the deadline for Cal State Long Beach and four other especially popular schools. Three other campuses would have closed by Feb. 1 regardless.

What we have here is a coward of a Governor, who instead of cutting programs wants to throw up sneaky barriers to entry in an effort to take the blame away from himself and toward those who need the services.  It’s about as scummy as you can get.  Frank Russo shares my disdain.

Is this what the great state of California is coming to? I thought, apparently naively, that we celebrated and cherished the desire of our young wanting to further their education and attend institutions of higher learning. Instead, because of the budget proposed by Governor Schwarzenegger for next year, and difficulties the California State University (CSU) system expects to have with cut backs, they are, with premeditation (but propbably without malice aforethought) advancing the deadline for applying and hoping that many students miss the deadline.

Now we see the “Year of Education” and the “Year of Healthcare” turned into the “Year of Changing Paperwork and Deadlines So We Can Kick People Off Education And Healthcare.”  The Legislative Analyst has already deemed the Governor’s budget unworkable.  I wonder what she’ll say about these latest efforts.

When Arnold Schwarzenegger endorsed Prop. 93, some considered it the result of some deal on health care or some other quid pro quo.  I thought it was much simpler than that.  

Schwarzenegger has a good working relationship with Fabian Nuñez and Don Perata.  He for the most part gets what he wants out of that relationship.  Why would he want to change it for his last two years in office?  The pessimist’s view would be “Why would he want to housebreak someone else when these two are already housebroken?”  The optimist’s view is “He’s moving forward on his agenda, why rock the boat?”

Arnold has now confirmed this, by the way.

Schwarzenegger said he has developed a “trust” with sitting legislative leaders and hopes to continue to work with them. The governor said he felt a loss when former Senate leader John Burton was termed out of the Legislature.

“I just got this groove going with this guy and we got to understanding each other and all of a sudden he’s being ripped away,” Schwarzenegger said.

The governor said he and current lawmakers would be better able to tackle major issues facing the state, from the budget crisis to the state’s need for $500 billion worth of infrastructure improvements.

Besides, he said, “I really want some of those guys to stay.”

It’s a selfish view from the standpoint of Schwarzenegger (should the governor really be picking the majority leaders in the opposite party?), but perfectly coherent.  He wants to continue the working relationship.  In the short term, it’s up to the voters to decide if that working relationship is good for California.  I think the sum total of this site could be “Exhibit A,” but your mileage may vary.

(As a side note, interesting how this experience vs. change question continues at the state level, no?  Of course, we must wonder about the right kind or the wrong kind of experience.)

“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.

Tomorrow, Arnold Schwarzenegger, reminded that he’s the governor of California and not the governor of Time and Newsweek, will walk up to a dais in Sacramento and claim that now, four years after he was elected to enact reform, the time has come to reform the budget process.  But it’s a curious use of the term “reform,” since it will be an attempt to resurrect a policy that was soundly defeated by voters in 2005.

Heading into a week in which he’s expected to deliver grim news about the state’s fiscal health, Gov. Arnold Schwarzenegger is also preparing to propose changes to the budgeting process.

The Republican governor will offer a “budget reform” plan when he outlines his goals in his State of the State address Tuesday. Such a proposal, if successful, would likely give the executive office more authority in making cuts even after the Legislature has passed an annual spending plan.

First of all, California already gives the governor the ability, through the line-item veto, to make plenty of spending cuts.  Schwarzenegger oughta know, he used it to terminate mentally ill homeless people from getting treatment.  What Arnold really wants to do is something that Pete Wilson was denied as far back as 1992.  He wants to be able to subvert the will of the voters through Prop. 98 (so much for “let the people decide”) and eliminate spending baselines for education, health care, and other government services.  This is nothing but a wank, an effort to eliminate the revenue side of the budget equation and solely solve a $14 billion dollar problem with deep spending cuts.  He’s also trying to essentially defund education right at the beginning of the already-D.O.A. “Year of Education”.

What this will also do is shield Schwarzenegger’s corporate buddies, who finance all of his travel, from the possibility of actually having to pay their fair share for access to the California market.

Considering that this is the third time Schwarzenegger has sought the ability to defund education and health care, I don’t know how you can see his legacy as anything but that.  This has been the very public agenda from day one.  Everything else is window dressing.  Let’s hope the Legislature understands that, even if the media doesn’t.

California is dragging down the rest of the country with its job performance statistics:

California gained just 900 payroll jobs last month, the state said Friday, a lackluster showing that reflects a national slowdown attributed in part to the housing slump.

The slight gain followed a revised loss of 13,500 jobs in October, the Employment Development Department said.

The slowing job market combined with declines in taxable sales and falling home prices “paint a picture of an economy that is slowing sharply,” said Stephen Levy, senior economist at the Center for Continuing Study of the California Economy

In California, a little more than 1 million people were looking for work last month, an increase of 16,000 from October and up 186,000 compared to the year-ago period.

The state’s unemployment rate was unchanged from October at 5.6 percent. It was 4.7 percent in November 2006.

Significantly, it’s the rising cost of living that is playing a part in sinking the state.  With people unable to fall back on their home equity for cash, they slash spending, and nobody’s buying any homes, which leads to declines in the construction industry.

So don’t expect payroll taxes to somehow save us from our budget woes.  And don’t expect the magic 10% across-the-board cut fix to work, either.  First of all, it’s unconstitutional.  And that’s just part of the problem.

“Can he get across-the-board cuts comprehensively? No,” said Jean Ross, executive director of the California Budget Project, a nonpartisan group that advocates for poor and middle-class families. Not only does the state have to comply with various laws and court orders, it has debts to pay, paychecks to deliver, and everything from schools to prisons to maintain.

“I could go on and on and on,” Ross added.

And this is where the recession meets up with the proposed health care reform.  Before such a program would kick in, you’re looking at a governor who may attempt to throw the health care system into more chaos than it’s in now, because it’s one of the only areas where he isn’t legally constrained against cutting:

“I think some people think that 10 percent may sound fair and it’s not that much, until you recognize what that means on a human level,” said Anthony Wright, executive director of Health Access, a statewide health care consumer advocacy coalition.

Wright said a 10 percent cut in the state’s health insurance program for the poor means 680,000 of 6.8 million recipients could be left without coverage.

If people aren’t denied coverage, Wright said the governor could slash benefits dramatically so that patients can’t get wheelchairs, prosthetic limbs or asthma inhalers.

Whether ABx 1 1 would restore all this public money or not (and the price tag is low if they think it will), the amplification of costs from two years of a lack of even the most basic care for the poor would be enormous.  Yet the Governor will claim on one day that our health care problems are solved, while on the next day slashing budgets so that they end up even worse.  This is his modus operandi, and you can’t trust someone with this track record.

Gov. Arnold Schwarzenegger won re-election in 2006 by selling himself as a problem solver who boosted California’s economy and resolved the state’s budget problems, all without new taxes.

The Republican governor declared in January that “through discipline and through new revenues that come from economic growth, we reduced the deficit over time and got our fiscal house in order.”

But less than a year into his second term, the narrative has run dry […]

“I think the problems were deeper and more structural than the governor realized when he was first elected,” said Jean Ross, executive director of the California Budget Project, which advocates for poor and middle-class families.

“There is a fundamental imbalance between revenues and expenditures,” Ross added. “Many budgets that were signed into law, including those signed by the current governor, made the problems worse, not better.”

Remember the 2004 “Performance Review,” which we were told was all that was needed to fix the budget problems (“Open up the books!  Then we’ll see the numbers!”)  Practically nothing that came out of that review was put into law.  Everything this Governor has ever said has been hype, as he plowed ahead with the same wrongheaded conservative solutions of passing off crises to future generations.

That’s why, given the fact of watching this guy operate over 4 years, it’s nearly impossible to give him the benefit of the doubt on anything.

Well, it was obvious, but we apparently know how the Governor is going to deal with the massive projected budget deficit.

Faced with what his staff now estimates as a $14 billion budget hole, Gov. Arnold Schwarzenegger has decided to seek across-the-board cuts to state operations.

The administration last month asked departments to prepare hypothetical budgets based on 10 percent reductions for the fiscal year beginning July 1 in case such a move was sought.

But now, as the fiscal outlook has worsened, the Republican governor has decided to go forward, according to advocates for social services and local government the governor has summoned in recent days for budget discussions.

That’s 10 percent across the board, but of course there are some spending mandates in there, so some of those cuts will not be allowed.

Schwarzenegger also said that he is hesistant to call for tax increases because of legislative and voter resistance.  In other words, he’s hesitant to lead.  This seems like one of those classic trial balloons to check the reaction.  Well, here’s one.  It’s clear that Republican policies of creating, artificially and against the will of the majority, a structurally unsound revenue model, will not be changing, at least not next year.  And so we’ll end up with a one-sided approach to a dire budget problem, when such an approach will only put off the problem.  This is how government shrinks, this is how public confidence in government saps, and this is how a belligerent, UNPATRIOTIC minority (California and America are worth paying for) gets its way.

UPDATE by Brian: I wanted to tack Sen. Perata’s statement on health care onto this post. (h/t CapitolAlert  )He doesn’t sound very optimistic:

“I am encouraged by the progress the Governor, the Assembly Speaker and I have made this year developing a plan for extending health care insurance to the many Californians who do not have it.”

“While I still strongly favor the concept, I have been shocked by the recent revelation that next year’s budget is facing a $14 billion deficit and what that could mean.”

“It would be imprudent and impolitic to support an expansion of health care coverage without knowing how we’re going to pay for vital health programs the state now provides for poor children, their families and the aged, blind and disabled.”

“The real issue now is the deficit and how this squares with everything else that we are going to do.”

(Bumped to move the 2 budget diaries together. – promoted by Brian Leubitz)

The Schwarzenegger era will be remembered as the era of “blockbuster politics,” where the Governor took the same marketing techniques that made his movies popular and transferred them to the political stage.  He wouldn’t just make an issue a priority, he would structure the entire year around it.  “The Year of Reform!”  “The Year of Education!”  “The Year of Healthcare!”  “The Year of The Environment!” As an actor he only put out one movie a year, so one legislative initiative a year sounded about right for the average attention span.  The details of governance would be pushed backstage; the thrust would be to go big on one issue and hope the goodwill gained from success would mask whatever failures occurred.  This has not been a slam dunk; the year of reform crashed badly, other signature issues have yielded fruit.  Now, with this year’s blockbuster on the rocks due to Republican resistance, legal challenges, initiative politics and structural roadblocks, the inattention to the small problems that weren’t on the big agenda are starting to consume the state.  In an excellent editorial, Assemblyman John Laird, Chairman of the Budget Committee, explains how our current mess of a $10 billion dollar shortfall could have been easily avoided if the Governor would have paid attention to something other than staging the next blockbuster.

… [T]he chronic boom-and-bust budget cycle is rooted in a simple problem: Californians generally believe in government and want it adequately funded — so much so that they repeatedly have voted for laws or constitutional amendments that lock in guaranteed spending for, say, education or transportation. At the same time, the state’s revenue system is antiquated and volatile. It is heavily reliant on income taxes, for instance, and so the pains of an economic downturn have a magnified effect on state revenue.

The short-term solutions that get us through on a year-to-year basis all have been tried — and tried. It’s time for bipartisan hard work to bring California’s long-term spending demands into balance with long-term revenues. It won’t be easy, but the easy paths have been taken, and they’ve left the state awash in red ink.

Wingnut conservatives are calling on the Governor to declare a fiscal crisis.  It’s one of their own doing.  When California could have eliminated the constant catastrophes of the budget process by restructuring the revenue offsets to services the population desires, instead the Governor floated a $15 billion dollar bond in 2004.  The result is $3 billion a year extra in debt, every year, to repay the costs of a senseless short-term fix.  If sound Republican budgeting means “put the problem off to children and grandchildren,” then we’ve got a lot of sound budgeters in Sacramento:

On paper, it may look like spending has increased in recent years, but that is largely driven by the expiration of earlier budget-balancing tricks — such as temporarily shifting school funding to local governments, shifting costs to special funds and the multibillion-dollar temporary cut to education.

There really haven’t been significant program spending increases, with three exceptions: public safety, the result of various court cases regarding our prison system and implementation of “Jessica’s Law” to track sex offenders; debt service, primarily the annual $3-billion payment on the $15-billion deficit bond; and local government funding, a result of the vehicle license fee cut because billions from that fee used to go to cities and counties.

Sacramento does not have a spending problem.  It has a denial-of-reality problem.  The cuts are always accommodated in the state budget, like this year’s delay of COLA (cost of living adjustments) for elderly public assistance, and the $1.3 billion in transportation funding.  The revenue increases are always blocked.  Stopgaps that run out and increases in population wipe out the cuts.  We’re left on an unsustainable track.

The state is rapidly headed toward bankruptcy if it continues down this stupid, temper-tantrum approach to the budget.  if Arnold Schwarzenegger wants to leave a lasting legacy, and let’s face it, that’s all he wants to do, he can work hard to fix the structural problems that will always put the state’s financial picture in peril.  That would require sitting in his office and doing his job, not holding big speeches behind backdrops that say “The Year of the Tiger!” or whatever he’s trying to peddle to the electorate.