Gov. Schwarzenegger is giving a speech right now at the Commonwealth Club in San Francisco, the kickoff of his campaign for the state budget items in the May 19 special election.  In some remarks released earlier, it’s clear Arnold is highlighting – and is most concerned about – the spending cap.

“Our state capital is a town that feeds on dysfunction. The special interests, left and right, need the process to be dysfunctional. That is how they control Sacramento. That is how they prevent change.”

[snip]

“But now we have an agreement, passed by two-thirds of the legislature, that puts on the ballot serious budget reform, including a spending limit and a rainy day fund.

“And the very interests, the far left and the far right, that prefer dysfunction over change have already launched a campaign to confuse people and defeat the reform. But this time they are not going to succeed.”

Arnold probably sees this as a selling point, that if Democrats are against his plan, and Republicans are against his plan, then it must be just right.  But this Goldilocks centrism masks the extremism of the spending cap plan, which would ratchet down revenues and cut vital services permanently.  It also represents a serious miscalculation on the part of the Governor, who apparently still thinks his post-partisan message actually works in this state.  That’s the same political genius that has Schwarzenegger polling worse than Carly Fiorina in potential 2010 Senate matchups against Barbara Boxer.  And even Schwarzenegger’s own strategists seem to know that he cannot be the public face of the special election, lest he doom it to failure.

Opponents of the measures say their private polling has shown linking the initiatives to the governor drives down support of the measures. That has been echoed by some supporters of the ballot measures, who have also started testing potential campaign messages.

But (campaign strategist) Adam Mendelsohn said Schwarzenegger’s star power and his ability to get news coverage is still a great asset for the campaign.

“There is no elected official in this state capable of dominating coverage like Arnold Schwarzenegger. The chattering class loves to look at his approval numbers and then cast dispersions, but communicating in a campaign is a lot more complex than just looking at approval numbers.”

Uh, yeah, Mr. Mendelsohn, that’s the PROBLEM.  He’s extremely unpopular with everyone but the Dan Weintraubs of the world.  And there aren’t 17 million Dan Weintraubs living here.

The spending cap, with something for everyone to hate, is particularly vulnerable in the special election.  Republicans have been calling for a hard cap for years, if not decades, but they’ve become so blinded by the Heads on a Stick faction of their party that they cannot look past the short-term of two years of tax increases and realize what they would be getting.  But the Yacht Party infantry clearly doesn’t care: heck, they’re trying to recall Roy Ashburn, who’s termed out in 2010 anyway.  So their entire side, or at least everyone who wants to be elected in a primary, is lining up against 1A.  Meg Whitman has come out against it.

Republican gubernatorial candidate Meg Whitman has already announced her opposition to Proposition 1A, and Whitman spokesman Mitch Zak did not rule out the possibility that Whitman would spend money against the measure.

“She’s been very outspoken in her opposition to 1A,” Zak said. “We’ve not made a decision how that opposition manifests at this point. We’re keeping our options open.”

The Flash Report is claiming that Steve Poizner will oppose the measure as well, and he is hinting at contributing funding.

They will be joined by at least some segment of Assembly Democrats.

After a long, closed-door meeting Tuesday, Assembly Democrats remain divided over the budget-balancing ballot measure at the heart of the May 19 special election, Proposition 1A, which would impose a cap and raise taxes.

“Our caucus had a very long discussion on this,” Assembly Speaker Karen Bass told Capitol Weekly. “There are a number of members who are supportive of 1A, there are several members who are opposed to 1A, and there are many others who are trying to decide. We are working through this and we will have another caucus next week,” she said Tuesday evening.

Looks like Bass will have a lot more colleagues to boot out of committee assignments.  You’ll remember that she punished the three Democrats who actually voted against the spending cap on the floor back in February.  Now a good bit of the caucus is revolting.

The caucus did vote to support 1B through 1F, and that’s probably because they know that there’s going to be more cuts coming down the road, and voters opposing the revenue-enhancing items on the ballot will make their job harder.

But, she added, “I’m hearing that we are going to have a $4 billion dollar (revenue) hole, so if the ballot measures don’t pass, then it becomes  $9 billion or $10 billion hole.”

As I said, the crisis continues.

So I’m seeing the anti-tax groups, progressive advocates, the big money in the GOP, half the Assembly Democratic caucus, all against 1A.  On the pro side, Arnold, George Skelton, and Steve Westly, who says 1A will “instill much needed fiscal discipline”.  Yeah, poor people and the blind, get some fiscal discipline, you scumbags!

The wildcard remains the unions, who with even a little bit of financial backing could tip the scales on 1A.  SEIU and AFSCME have delayed formal positions until later this month.  But the Administration is trying to intimidate them into going along with it.

Here’s why it matters to state workers: Last week, the Association of California State Supervisors asked administration officials if the governor would still lay off employees, or if he would abandon the plan since lawmakers have passed a budget.

(Remember, state workers’ twice-monthly furlough is just part of how the governor wants to cut costs. Layoff warnings went to 20,000 of the state’s least senior employees last month. Half could lose their jobs, officials have said.)

The administration’s answer, from notes taken by an association representative: “We hope the five budget-related propositions pass … . If the propositions do not pass, we will be in a worse situation, with more furloughs and layoffs.”

This is despite the fact that 1A would have NO IMPACT whatsoever on the immediate bottom line; in fact, passing it would hurt the budget for state workers more than defeating it.  “Vote like your job depends on it… because it does.”  That must be the working motto.

The question is, will the intimidation work?  Obviously, the fact that the tax increase extensions in 1A are practically hidden on the ballot is going to arouse anger amongst the Heads on a Stick crowd.  And progressive advocates are sticking to principle that an artificial spending cap has failed wherever it’s been tried and is wrong for the state.  In the mythical middle you have the vain Mr. Schwarzenegger, desperately trying to stay relevant.  Ultimately, this is a referendum on him.

UPDATE: And here we go.  The League of Women Voters just announced they’re opposing 1A, along with 1C, 1D, and 1E (selling the lottery and moving money from voter-approved funds for children’s programs and mental health).  This is big if it’s a harbinger of how other groups will line up.

Mac Taylor at the Legislative Analyst’s Office (LAO) has made his preliminary assessment of the impact of the federal stimulus on California’s bottom line.  This is important, recall, because if the state can get over $10 billion in such a way that reduces the budget deficit, they would hit a “trigger” that would allow the state to eliminate $1.8 billion in tax increases and restore about $1 billion in really painful cuts to social services, particularly health care for the needy.

Taylor doesn’t think we can get there:

A significant portion of the $31 billion in aid to California will be available to address the state’s budgetary problems. We estimate that, based on the enacted state 2009-10 budget, California can use $10.4 billion in new federal dollars for this purpose over the life of ARRA. Of that amount, $8 billion would be available in 2008-09 and 2009-10. The Director of Finance and State Treasurer will determine their own estimate of the latter amount by April 1 of this year. If the amount is less than $10 billion, then annual state program reductions of nearly $1 billion and revenue increases of about $1.8 billion adopted as part of the 2009-10 budget package will go into effect.

Given the state’s continuing economic struggles, however, it is possible that state revenues (and the Proposition 98 minimum funding level) may continue to fall. In that case, it may be possible to use additional federal education dollars for budgetary relief.

This is an analysis of things as they stand right now, with no further changes from the legislature to qualify the state for more funding.  It is not the final version of things, as Taylor notes, because the legislature could act quickly on a number of fronts to put the state over that $10 billion dollar line.  And the Budget Act provision is written so sloppily that it’s hard to even know what money would be eligible under it.

The Legislature will need to take many actions in the coming months to ensure that the funds are used in ways that meet its priorities and preferences. To assist in this process, we offer the following considerations in making decisions regarding these new federal funds:

• Maximize the Benefit of Federal Funds to the General Fund Budget. In this report, we make specific recommendations about how to help the state’s budgetary situation under different scenarios.

• Act Quickly in a Handful of Cases. In certain instances, the state will need to act rapidly to ensure it receives the maximum amount of relief or to use the funds in the most effective way possible. Addressing a Medi-Cal eligibility issue and providing direction on the use of transportation funds are two such examples.

The Medi-Cal eligibility issue ALONE would make over $11 billion in funding available to the state.  In addition, we know that revenues are going to come up short, which would allow up to $3 billion in education funding to be shifted to budget relief.  Taylor makes a number of recommendations that would allow the state to cross the trigger.

Nevertheless, the headline from the LA Times is “Stimulus Money Might Not Be Enough For California”.  That’s only true if the legislature does nothing.  And so these opening grafs are really kind of misleading.

Reporting from Sacramento — California appears likely to fall short of getting the federal stimulus money it needs to avoid the full tax hikes and spending cuts lawmakers approved last month to settle a contentious 100-day budget stalemate.

A fresh analysis of California’s flagging fiscal situation says the state needs about $2 billion more than Washington is providing. Lawmakers will be unlikely to reduce the personal income tax increase the new budget contains, or to restore some of the money they cut for universities, courts, social services and health care programs.

John Myers at Capitol Notes has a much more nuanced take, and he updated it with the LAO report today.  In the hearings today, Taylor didn’t sound assured of his own analysis.

But the LAO presentation, during this morning’s hearing of the Assembly Budget Committee, certainly didn’t sound definitive when it came to the $8 billion estimate. “This was our best kind of shot at it,” said Taylor […]

But when the question and answer session from legislators wrapped up, it was clear that a feisty debate is brewing as to whether to count more federal stimulus money towards deficit relief… thereby allowing some of the cuts and taxes to be set aside… or let the budget package stand as it is.

“I think taking for granted the $8 billion figure,” said Assemblymember Mike Feuer (D-LA), “is a big mistake.” Feuer went on to say that the Legislature should try to reach the magic $10 billion figure “any way we can,” thus maximizing federal matching dollars that state government has often left unused.

The California Budget Project’s analysis shows that there are plenty of ways to reach that $10 billion, through competitive grants and moving items to offset the budget, without costing the state very much at all and saving the worst budget cuts from being enacted.  There’s no reason not to get creative and do this.

Two other things.  The original trigger was set at $9 billion, until Abel “My Precious Tears” Maldonado wouldn’t sign off unless the gas tax increase was eliminated and lawmakers had to raise the trigger.  So if you want to blame someone for IHSS services being cut (or, if you prefer, raising your taxes), there’s your man.

Second, this will largely be resolved at a public meeting next week between Mike Genest, the finance director for the Governor, and state Treasurer Bill Lockyer.  And because the wording is so vague in the Budget Act, that meeting could erupt into chaos:

The actual bill says the two jointly have the responsibility of whether to “trigger off” those budget items. What if they disagree on the analysis? Ummm, well, no one really knows.

Well, at least it’s simple and elegant.

There’s a very pernicious habit in California of turning away from budget issues once a crisis is averted, in a show of relief that we will at least get a small reprieve from having to deal with the contentious battles for a period of time.  This false sense of security is bad enough in regular years, when the budget is cobbled together through borrowing against the future and no long-term solutions are implemented.  In this dynamic economic crisis, when rosy outlooks can darken in a matter of days, it’s downright foolhardy.

Greg Lucas at California’s Capitol has been one of the louder voices in insisting that the budget crisis is not at all over.  According to Controller John Chiang, revenue in February was $900 million dollars below estimates.  Now, if you extrapolate that out, we’ll be in a $10-$12 billion dollar budget hole by the end of the year just if things remain at the same level.  This is of course unlikely, as the February national job numbers showed.  So much of the tax increases passed in the February 19 budget solution are tied to employment – an increase in the income tax, and sales tax increases that of course rely on residents having purchasing power.  In addition, these lean economic times will push more people into needing state services, like unemployment and Medi-Cal.  Then there are the counter-cyclical increases and cuts that are working against what the economic recovery is attempting at the federal level.

In addition, many of the spending and taxation decisions made in the recent budget cancel out some of the benefits to California of the American Recovery and Reinvestment Act.

The federal package provides an estimated $13.1 billion in refundable income tax credits for middle to low-income Californians at the same time the state budget includes $12.2 billion in tax increases, only some of which are deductible. And only half of taxpayers deduct.

The federal bill includes a one-time $250 payment to the state’s aged, blind and disabled poor at the same time the state is reducing the maximum grant for an individual by $37 a month, $444 annually.

“California is roughly an eighth of the nation. The impact of this is sufficiently large that it could affect the prospects of recovery for the nation as a whole,” said Jean Ross, director of the California Budget Project, who has been examining how the state’s budget interacts with the federal stimulus package.

The biggest short-term issue is cash.  Lucas did an interview with John Chiang where he admitted that we will still need to borrow against the anticipation of future revenue as early as April, to the probable tune of $1.5 billion.  Because the budget deal was completed too late to include changes to the income tax code, those revenues will not come in until the following tax year.  The sales tax will go up April 1, but that will not be enough to cover expenses.

CC: Is February a big month for obligations?

JC: No. April is the real difficult month. If we don’t get that RAN, we’re $636 million in the red. But then the bigger issue is July. When we walk into the next fiscal year we will need a massive cash infusion.

CC: How come?

JC: We always borrow at the beginning of the year, 25 out of the last 26 anyway and then in April we make up the difference. But this year we walk in with weakness into the next fiscal year. There are less tools in the tool kit.  We’ll need a massive RAN or RAW (Revenue Anticipation Warrant).

Remember these last budgets borrow $16.5 billion from (state) special funds to backfill the general fund. So if we have any emergency in the state requiring aid from one of those special fund departments, the state is in trouble. Over 1,100 special funds in the state and we borrowed from over 650 of them. Part of this last budget solution gives us the ability to borrow another $2 billion more. The governor’s budget has us borrowing $11 billion from special funds over the next 18 months.

So we’re going to have to do some outside borrowing for the next fiscal year. Period.

And of course, there’s very little anticipation of the worsening economic picture in the budget, meaning that we’ll be in unquestionably worse shape by summer.  And the cash crisis, forcing short-term borrowing, really impacts selected projects that go out into the bond market, for example infrastructure like the high speed rail project, which will basically have to shut down if there isn’t a quick infusion of cash.  Keep in mind that California has the worst bond rating in the country and the credit markets are still not that friendly to the state.

Another pressing matter is the determination of how much money from the federal stimulus will be available to the state to fill budget holes.  There is a “trigger” in the state budget that would actually reduce some cuts – most of them the worst of the worst, particularly in health care for the needy – as well as reverse increases to the income tax, if at least $10 billion dollars in federal money hits the state budget.  It’s not just that money comes in, it’s that it has to go toward general fund relief in order to contribute to the trigger.  And Mike Genest, the Governor’s finance director, has a preliminary estimate up showing that the state will come up short.  This is insanity.  As the California Budget Project noted on a conference call today, there will be many billions above the trigger number available to the state, the legislature need only craft the receipt of that money in such a way to hit the trigger.  Otherwise, they are raising taxes and cutting services, and needlessly so.  One such bill would change Medi-Cal eligibility requirements to free up as much as $11.23 billion over 27 months.  That should happen ASAP.  Democrats are trying to write this as a special session bill and ensure that it requires only a majority vote.

The main point here is that we remain in crisis mode with the state budget, and will continue for years upon years until we stop putting off the fundamental, structural solutions the way we constantly do.  For example, the prison system remained virtually untouched during the budget crisis, despite being both crippling to the bottom line and unconstitutional in its overcrowding and inability to provide health care.  We desperately need structural changes with how the state budgets, and those will only be accomplished by demolishing the conservative veto over the process and repealing the 2/3 rule.

UPDATE: Here’s a link to the CBP study of the American Recovery and Reinvestment Act, identifying as much as $50 billion dollars available to the state in funding.  Surely the legislature can figure out how to capture 20% of that and set off the budget trigger.

Arnold Schwarzenegger got a lot of good press from going on ABC and saying that he would take the stimulus money of any GOP governor who refused a portion of it.

“Well, Governor Sanford says that he does not want to take the federal stimulus package money. And I’ll say to him, I’ll take it,” Schwarzenegger said. “I’m more than happy to take his money or any other governor in this country that doesn’t want to take this money. I’ll take it, because we in California need it. I think it’s a terrific package. I think if you ask a thousand people for their opinion, what is their ideal stimulus package, you will have a thousand different answers. So everyone’s is a little different. I think he’s done a great job and I think California benefits tremendously from that $80 billion of tax benefits there, for around $35 billion. There are other advantages: $45 billion of money that go to transportation, to education, to health care, all those different areas. There’s even some money that could benefit our revenues or, I should say, our budget itself….”

As you may know, what Sanford and Bobby Jindal and Haley Barbour and these Southern Republican Governors were objecting to is changing their unemployment eligibility statutes so they could accept millions in additional funding through the stimulus to give to the jobless.  It’s the best kind of stimulus there is and would probably keep some of the retail sector in business, but these Governors feel that once the federal money to fund the new eligibles ran out, it would be too burdensome on business to raise the funds.  So they have, rhetorically at least, sided with the corporate community in rejecting the funds.

Which is exactly what the Governor appears to be doing.

At a hearing of the Assembly Insurance Committee Wednesday, Republican Governor Arnold Schwarzenegger’s representative, Labor and Workforce Development Agency Undersecretary Steffanie Watkins, refused to support AB 3x 23, legislation that makes California eligible for $839 million in one-time federal unemployment insurance funds available at part of the President’s economic stimulus package.

This from the same Governor who just last week was all over the national media circuit criticizing Louisiana Gov. Bobby Jindal and other Republican Governors who were spurning economic stimulus funds.

What a difference a week makes.

In the end, the bill made it out of committee by an 8-2 vote with members of the Yacht Party crossing the aisle, suggesting that the legislature would have the 2/3 vote necessary to override Schwarzenegger, if it came to that.  But take note of the extreme hypocrisy here.  Mr. Governor-by-Magazine-Cover, the media darling, goes on national TV and wags his finger at fellow Republicans who won’t take stimulus money.  Then he signals that he won’t take stimulus money FOR THE EXACT SAME REASON as those governors he criticized.

Incredible.

There is actually another major hearing going on in the state today, in Sacramento Superior Court.  Various plaintiffs are suing to change the title and summary on two of the ballot measures in the May 19 special election, on the grounds that they were fraudulent and misleading.  And there’s already been one victory today.

The May 19 ballot measure to temporarily take money from a 2004 mental health initiative has a new overview that will be presented to voters, after a settlement to a legal challenge was reached this morning.

The challenge to Proposition 1E’s ballot title and summary, and its ballot label, was centered on charges by opponents that the Legislature wrote a “false and misleading” overview, in order to make Prop 1E’s redirection of some $450 million in mental health funds more palatable.

The new summary makes it more clear that earmarked mental health funds will be taken away from the voter-approved Prop. 63 and used to balance the state budget.  Earlier, the weasel words “provides temporary flexibility” were used.

The other dispute is over Prop. 1A, the state spending cap.  John Myers is Twittering from the courtroom, and the plaintiffs are making the same clear and obvious points about the legislature’s treachery in this matter that George Skelton made this morning.  The title makes no reference to the spending cap OR the extension of tax increases that was part of the deal, and the summary only alludes to the taxes near the end of the description as part of the fiscal analysis.  The summary uses words and phrases like “rainy day fund” and “overspending” and “reform” in ways clearly designed to persuade the voter.  Defense lawyers claim that the fleeting reference to revenue in the fiscal analysis is all that is needed, and anyway voters “already understand all the underlying budget issues” so there’s no need for any changes.

As I’ve said, this now is starting to look more like a cover-up, which is very bad for a legislature and a Governor who aren’t seen by the voters as trustworthy, and in at least the Governor’s case, for good reason.  If the aftermath of the ruling is a court order that the legislature deliberately wrote the title and summary in a way to obscure the truth about what Prop. 1A would do, there’s your fodder for commercials for the next 2 months.  And it’s a potentially fatal blow.

We’re awaiting a decision…

UPDATE: So here’s the answer – the judge would like some of the more misleading language removed, but isn’t inclined to add in big bold letters “THIS MEANS YOUR TAXES ARE GOING UP.”  This obviously can be exploited by whatever campaign coalesces around the No side – the “hidden tax,” et al. – but it won’t be on the ballot beyond the bit in the fiscal analysis.  We’ll see what the final language will read.

As Becks mentioned in an eloquent diary on the Rec list, Karen Bass has made a baffling, counter-productive move to punish Sandre Swanson, Warren Furutani, and Tony Mendoza, lawmakers who did the right thing for their districts and their state by opposing the spending cap part of the budget.  The LA Times has a good story on this.

Like a military commander busting down insubordinate troops, Assembly Speaker Karen Bass (D-Los Angeles) has stripped committee chairmanships from a trio of wayward lawmakers after they refused to join fellow Democrats in support of a key budget provision.

The three assemblymen — Sandre Swanson of Alameda, Warren Furutani of Gardena and Tony Mendoza of Artesia — voted last month against a measure to cap state spending, which will appear on a special statewide ballot this spring […]

By removing the three lawmakers from their posts, Bass takes away key staff assistance, clout on policy issues and potential fundraising power.

She’s hurting those lawmakers, but as the above sentence makes clear, she’s hurting their constituents as well.  All because they couldn’t go along with a plan that will make it impossible to deliver basic services to Californians, even in good economic times.  And the spokeswoman for Bass trying to sidestep the rationale for this is pathetic.

“Having now had a couple months to see this class in action,” the speaker felt changes were needed “to ensure the Assembly can continue to do the best job for the people of California,” said spokeswoman Shannon Murphy.

She declined to elaborate, calling the changes “an internal caucus matter.”

You’ll notice that Darrell Steinberg did not mete out this punishment to, for example, Loni Hancock, who voted against the spending cap in the Senate.

I understand the desire for leadership to have control of their caucus, but unless we’re concluding that Karen Bass really really wanted to cap state spending, there is no good reason to enforce party discipline on a terrible vote.  When the spending cap goes down because of the arrogant way that Bass and the legislature hid the true costs, both on the spending side and on the taxation side, these three members who were right all along will appear to be the only ones who suffer.

I think it’s worth writing or calling the Speaker and asking her why she wants to punish progressives for voting to protect services for Californians.  And you might ask her, politely, to reinstate the Spending Cap Three.

District Address

5750 Wilshire Boulevard

Suite 565

Los Angeles, CA 90036

Phone: (323) 937-4747

Fax: (323) 937-3466

Capitol Address

P.O. Box 942849

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Sacramento, CA 94249-0047

Phone: (916) 319-2047

Since it’s Don’t Curse Week here in LA County, I will be forced to be brief.  Last night a group of grassroots activists, including remnants of the Obama organizers in California, various progressive advocacy groups, and Democratic Club leaders, discussed a potential citizen-led ballot initiative to reform the California budget process.  Nobody disputes that something drastic must be done to permanently end the conservative veto and restore democracy to the process.  If you ask 100 activists what needs to be done you will get 105 answers.  Arriving at the conclusion that offers the best opportunity for success, both in being adopted as a reform by the voters and as a practical matter for the legislature, ought to be opened to a vigorous debate and a deliberative process.

That is the direct opposite of what happened yesterday, when a group of self-appointed leaders tried to dictate the form in which the reform will take, and sought to invite the remainder of the group to join their already-decided-upon course of action.  So the fight to restore democracy has begun with an undemocratic edict, from the grassroots no less, that is based in the same kind of mushy, don’t-make-waves approach that has devastated the state for decades upon decades.  If it sounds topsy-turvy, you’re not alone.

In short, the self-appointed leadership has decided to put up a website to “eliminate the two-thirds rule” and “restore majority rule” to the budget process.  This is a very tightly controlled statement based on, essentially, the fiction that eliminating the two-thirds rule is what these folks are seeking to do.  They are not.  As you may know, there is a 2/3 rule for passing a budget, and a 2/3 rule for any changes in the tax code that involve increasing revenue.  To the layman, this might seem like two discrete parts, but that’s really not true.  A budget includes taxes, spending, and a few other priorities.  Changing one without the other does actually nothing to overcome the conservative veto.  And yet this is what the self-appointed grassroots leadership’s proposal would do, only covering the repeal of 2/3 for passing a budget and not for taxation.

This is really the final blow in what was a long slide away from progressive leadership at the grassroots level.  I’ve heard a lot of justifications and rationales for not including fully half of the equation of settling a budget in the process of reforming the budget, most of them so twisted with pretzel logic as to be indecipherable.  Some say that there’s no way tax changes could pass in the current environment, so we should strive to make whatever progress we can.  That’s the kind of tissue-soft, gutless, out-of-touch-with-where-America-is-right-now statement that has made California a political basket case.  Those who bow down to the keepers of the tax revolt are usually the same people that are saying a spending cap that includes tax increases is destined to pass, or the same people saying a constitutional convention will take care of the tax problem even though it, too, is subject to a vote of the people.  It doesn’t make any sense.  There’s an argument that the polling shows any tax issues are a loser.  That’s just not true.  The latest PPIC poll shows very little difference between repealing two-thirds for the budget and for taxes – within the margin of error.

The other argument is that California lawmakers, given a majority vote on the budget, will have powerful leverage to bend the Yacht Party to their will on tax issues, or go directly to the people with tax solutions.  These are the same people who spend every day of their lives lamenting the terrible negotiating skills of Democrats in the legislature, and laughing at those who claim the Yacht Party is surely just a little bit more pressure away from folding.

I’ve made my position on this well-known, and I’ll repeat it here.

Changing the (repeal of 2/3 for the) budget but not taxes is TOM MCCLINTOCK’S view of things.  It makes Democrats own a budget that can only be modified with expenditure cuts.  In the event of a deficit, Democrats would have to either cave and cut services or hold out with the exact same dynamic that we saw this year.  And it will not allow the legislature to tackle the structural revenue gap that comes from a tax system too closely tied to boom-and-bust budget cycles.  This is perverse consultant-class thinking that is dangerously outdated, constantly compromising, and believes in political reality as static rather than lifting a finger to change that reality.  Thinking that March 2004 and June 2010 are the same is just ridiculous, and thinking that no argument can be made to the public, after the longest and most self-evidently absurd budget process in decades, that the system is fundamentally broken and has to be changed to allow the majority to do their job, is in many ways why we’re in this position to begin with.

And this is where the self-appointed grassroots leadership will take us.  This was carried out through perhaps a deliberative internal process (“Several hours!” we were told), but with no input from the broader grassroots.  The website set up has no ability for public comment, no discussion of why the position was taken, and, most crucially, no explanation that “restoring majority rule” as conceived by the proposed ballot initiative does not restore majority rule.  You can call that a lot of things, but the most accurate would be “a lie.”  It is a lie to suggest that this proposal would repeal 2/3.  It does not.  And it is being carried out in a top-down process that reminds one of the worst aspects of the Sacramento consultocracy rather than progressive leadership in the grassroots.

The working theory is that everything is on the table and this effort is initially to gauge support in the process.  That it is being done through misleading means really doesn’t inspire confidence in how open the process will be.  They can go down that road, and I actually support signing on to the site as a show of support.  But caveat emptor.  And if you do sign, maybe contact the leaders and ask them why they aren’t being truthful about their intentions or transparent about the decision-making process.

The latest poll numbers for the Governor and the legislature are pitiful, although clearly the electorate has hit Schwarzenegger more over the recent budget crisis.

Overall, just 33% of California adults give Schwarzenegger a positive job rating, barely above the record low of 32% that he hit in 2005 after pushing a package of failed ballot measures in a special election. As recently as January, Schwarzenegger’s favorable job rating was at 40%.

Faring worse is the state Legislature: Its 21% approval rating matches the record low it set in several previous polls.

There are a number of other questions in the poll regarding the right to choose and birth control, which you can see here (Short version: Californians still support the right to choose, though parental notification gets narrow support.  I would imagine that how the question is asked accounts for that, although this will probably give hope to the forces that have lost parental notification on the ballot three times in a row to try yet again).

What I want to focus on for the moment is those appalling numbers for our political leaders.  Given that, as well as the public tendency to vote down ballot initiatives, you’d think the last thing they’d want to do is put the public faces of lawmakers on the budget items in the May 19 special election.  You’d be wrong.

Gov. Arnold Schwarznegger, Senate President Pro Tem Darrell Steinberg and ex-Senate leader Dave Cogdill will join hands today for the first campaign event before the upcoming budget special election.

The trio — alongside other advocates for the package — will host a press conference this afternoon at a Sacramento-area child development center.

Now, maybe Darrell Steinberg has some grand design where the limits in the spending cap part of the package can be overcome.  Or maybe he’s perfectly content with ratcheting down spending and making it impossible to revive it no matter what the economic situation.  Whatever the reason, it seems like terrible strategy as well as bad policy.

On the flip side, SEIU editorializes against the spending cap in Capitol Weekly:

One of the most troubling aspects of the budget deal to us is the budget cap, which promises to make the cuts permanent by making it virtually impossible to restore them in better times. For SEIU members that translates into year after year of higher caseloads for social workers who help children endangered by neglect or abuse; ongoing cuts to healthcare for families struggling with unemployment or low-wage work; a future of shrinking support for families who have children with autism or cerebral palsy; ongoing cuts to hundreds of state services from parks to oversight of hospitals and nursing homes, and ongoing cuts to home care, higher education, K-12 schools, and other vital public services.

We know that we are not alone in our concerns. In fact, Californians do not support the inevitable result of a budget cap – each of these cuts is deeply unpopular; yet legislators have already voted for the cap without a single hearing on the cap’s effects, without explaining its effects to their constituents, and without asking for detailed analysis from the Controller, the Treasurer, or independent outside experts.

This is not the way such a serious measure should have been considered or passed. It reflects poorly on the Legislature as a deliberative and transparent body.

With the Governor trying to get in on the Constitutional convention, and offering a vision of reform that trades majority vote for the spending cap, essentially one horrible outcome for another, it’s beyond clear that, if the spending cap passes, it will be locked in for a very long time no matter what other reforms are undertaken, and with a baseline spending level “established during one of the, if not the, worst budget crisis in the state’s history,” as the author writes.  This would cripple the state in a fundamental way.