So the legislature has scheduled a weekend vote on a new budget plan for the special session.  It could be that they will vote on Governor Schwarzenegger’s plan without modification.  In fact, that’s almost certain, because Denise Ducheny, the chair of the Senate Budget Committee, is in India until next Wednesday, and unless she’s holding hearings in Mumbai, I don’t think she’ll be marking anything up.

So what exactly ARE they going to vote on?

The basic political dynamic that caused a record-long impasse over the state budget last summer – Republicans blocking any new taxes, and Democrats vowing to protect services from deep spending cuts – has not changed. Even so, Schwarzenegger is expected to gather with the Democratic and Republican leaders this morning, after more than three hours of talks on Monday.

“We’re committed to making a dent in this problem with this Legislature and not waiting until Dec. 1,” Darrell Steinberg, the incoming Democratic Senate leader, said after Monday’s negotiations. But asked if he knew what legislators would be voting on Sunday during the scheduled floor sessions, he said, “We definitely don’t know yet.”

The Governor seemed to suggest in this weekend’s interview with George Stephanopoulos that his proposal would be changed before the vote, but I don’t see how that would happen.

STEPHANOPOULOS: Yet, your critics say that this one-and-a-half- cent sales tax is the most regressive form of tax. It’s going to hit the people who are going through the toughest times right now the hardest.

SCHWARZENEGGER: Well, no one should be that worried about any of that, because remember, the way it works is that the governor puts up a proposal, and then the legislative leaders go and start debating over that and looking into it, if they maybe have a better idea or a different idea. So we have a very collaborative kind of approach to the whole thing. So they may come up with different type of taxes.

Get to work, Sen. Ducheny!  Or maybe the hordes of lobbyists can come up with something.

Meanwhile, at this point, it seems like the best option for the state is to beg the Congress for aid.  The stalemate with the Yacht Party is overwhelmingly likely to continue, and the numbers that California would need to survive are dwarfed by the handouts to banks and other industries.  The Governor has been lobbying for support as well, and Speaker Pelosi appears to agree that some aid is needed.  Without that help, we’re going to see cutbacks even worse than lowering future enrollment at CSU by 10,000 students.  And sadly, it’s better at this point to seek help from Washington than Sacramento.

As the special session gets underway, the new “Budget Nun” Mac Taylor, and since it’s a he this time I think we’ll go with “Budget Priest”, has released an overview of the Governor’s proposals.  The first thing that pops out is we now have a new shortfall number: $28 billion for the next 20 months, and an unsustainable long-term deficit thereafter.

State Faces $27.8 Billion Shortfall. We concur with the administration’s assessment that the state’s struggling economy signals a major reduction in expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the next 20 months.

Long-Term Outlook Similarly Bleak. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 2013?14 absent corrective action. From 2010?11 through 2013?14, we project annual shortfalls that are consistently in the range of $22 billion, as shown below.

Overall, Taylor is generally supportive of the Administration’s proposals for closing the gap, but I think that has a lot to do with the fact that the Governor is finally using realistic numbers and not employing any borrowing gimmicks.  Compared to the 2008-09 budget, this is extremely welcome.  However, Taylor makes the point that a short-term increase in the sales tax cannot possibly be the backbone of a long-term solution, and three years out we’d still see deficits in the range of $9-11 billion.  Instead, he offers a couple points.  First is one that I’ve been making a lot, that California needs to lobby hard for state and local government relief in the second stimulus package:

In the coming months, there is a good chance that Congress will pass economic stimulus measures in an effort to boost the national economy. In the past, some components of such measures have directly provided state fiscal relief. To date, the administration has not built any estimates of such relief into its budget numbers.  For the time being, this is appropriately cautious to avoid counting on relief that may never come.  The state, however, should continue to press the federal government for economic stimulus measures that will provide California with flexible fiscal relief. While such relief would not solve the state’s budget problem, it could provide several billions of dollars in budgetary solutions.

(While we’re at it, we could also recoup the $2 billion giveaway to Wells Fargo precipitated by the Treasury Department illegally changing the tax code to allow banks to avoid corporate taxes.  Any California Congresscritters want to hop right on that?)

He also rightly notes that the Governor’s tax proposals are regressive in nature, and offers one final solution – fix the VLF that you broke as your first act in Sacramento.

Alternative Program Realignment. As noted above, raising the VLF tax rate to 1 percent has merit from a tax policy perspective. If the Legislature made it the foundation of a program realignment with local governments, programmatic outcomes could be improved as well. Under this approach, $1.6 billion of state criminal justice and mental health programs could be realigned to counties and supported by (1) the revenues raised by the increase in the VLF rate and (2) most of the VLF fee revenues currently retained for administrative purposes by the DMV. By consolidating these program responsibilities at the county level, and giving counties significant program control and an ongoing revenue stream, we think California could achieve greater program outcomes and significant budgetary savings.

You can see the total savings chart at the end of this PDF, but clearly the VLF raise is the big story here.  The LA Times picked it up as a news story and also on their op-ed page today.  For those who counter that the VLF is just as regressive as the sales tax, it doesn’t have to be.

Right now the VLF is a flat rate on the assessed value of a vehicle, which is based on its purchase price and a fixed schedule of depreciation (basically 10% per year). It’s true that if all you did was raise the VLF to its old rate of 2% it would remain about as regressive as a sales tax (see Table 5 here), but that’s not the only way you can do it. Unlike a sales tax, which needs to be a flat rate for administrative reasons, the VLF could easily vary by assessed value. It could stay at its current rate of 0.65% up to, say, $10,000 in assessed value, increase to 2% for more expensive cars, and increase still further to 4% for top end cars. The average rate would still be about 2%, but the incidence of the tax would be more progressive.

You can also build progressivity into the VLF by having it function as a carbon tax, essentially. You could set the VLF at a higher rate for cars that produce greater emissions, and at a lower rate for cars that are cleaner. As California is about to get a waiver to regulate tailpipe emissions under the Clean Air Act in a new Obama Administration, they would certainly be empowered to do so.

This is a repudiation of the very issue Schwarzenegger ran on in 2003.  We’ll see if he’s inclined to own up to his mistake.

The past few days have seen another spate of “OMG, Republican incumbents are in trouble!” stories in the traditional media.  Aside from them not understanding and internalizing the theory of coattails, this problem is particularly acute among the California media, where gerrymandering is just supposed to lock up Congressional and legislative seats airtight, except when, you know, it doesn’t.  Peculiar to this rendering of the world is the idea that nobody ever moves, dies, or reaches the age of 18 in any particular district, and thus voter registration statistics are completely static.  But of course this is not true, and once the Democratic Party started putting resources into registering new and lapsed voters, why look what happened:

One of the major reasons for these competitive contests has been the narrowing gap in registered voters between the parties. While Republicans still enjoy a substantial advantage over Democrats in all three districts, their leads have shrunk significantly.

Four years ago, Republicans led Democrats among registered voters by margins of 17 percent in the Orange County-based 46th, 15 percent in the San Diego-area 50th and 11 percent in the Riverside County-based 45th. By this year’s registration deadline of Oct. 20, those leads had shrunk by 6 percent in the 50th, 5 percent in the 46th and 6 percent in the 45th.

There are still the conventional wisdom-besotted punditocracy that simply can’t conceive of these major shifts in the electorate (it’s not like anything has happened the past eight years that would lead people to desert the Republican Party in droves, right?), who believe that incumbents just win and that’s the end of it.  But just ask one of those incumbents what he fears on Tuesday:

HUNTINGTON BEACH – Rep. Dana Rohrabacher, R-Huntington Beach/Long Beach said Friday he’s concerned that Republicans will be discouraged by a possible Democratic landslide at the polls, affecting his re-election bid.

“If (Republican nominee John) McCain does not do well, and Republicans stay home, my lead could evaporate,” the nine-term incumbent of the 46th Congressional District said.

Huntington Beach Mayor Debbie Cook, the Democratic challenger, said the race is a “statistical dead heat,” and agreed that a solid turnout for change – from the economic problems facing the country – could be the difference in Tuesday’s hotly contested race.

“All the uncertainty that’s going on now is helping,” she said, adding that incumbents who have been “part of the system for the past 20 years” could be vulnerable.

This is all the more reason why Democrats and progressives need to remember Jim Corman and get as many voters to the polls as possible.  And Don’t Stop At The Top, of course.

And if the scenario is bright in the Congressional races, the Assembly looks even brighter.  Why, even Dan Walters has figured this one out.

Voters may not realize that they could dramatically alter that balance, but interest groups that are pouring millions of dollars into legislative and ballot measure campaigns certainly get it.

Democrats could pick up one seat in the Senate and are so certain of gaining three to five seats in the Assembly that they’ve diverted resources into several marginal districts, taking advantage of Obamania-inspired voter registration gains, to shoot for the six added seats that would give them a two-thirds majority. That margin is required for the budget and tax increases and could happen as the Capitol wrestles with a rapidly deteriorating economy and a fast-growing budget deficit.

We know about those top-line seats: AD-80, AD-78, AD-15, AD-10, AD-26.  But it’s Linda Jones’ race in AD-36 that has captured my attention.  She represents the ultimate swing vote as the potential 54th Democrat in the State Assembly, the vote that would give us a 2/3 majority, which in California is a governing majority.  And Linda Jones happens to be really great, campaiging on a message of green jobs in the waning days of the race.

As part of her campaign to create a stronger economy for the region, Democratic Assembly Candidate Linda Jones (36th District) today announced her “High Desert Region Green Jobs Initiative” – using ‘green jobs’ to increase opportunities for unemployed and underemployed adults in the High Desert communities. Lt. Governor John Garamendi, a longtime advocate for environmental protection and renewable energy, offered his full support of the plan, calling it a “giant leap forward” for the region’s economy.

“Investing in the ‘green economy’ is a win-win because it will create jobs and increase our clean energy efficiency,” said Linda Jones. “The High Desert Region Green Jobs Initiative will create outreach, educational, and training programs to recruit, develop, and sustain a green industry that will create jobs, increase our clean energy efficiency, and grow our economy for the region.”

There’s a website, High Desert Green Jobs, that details the initiative.  It’s fantastic that someone in a swing district trying to become the first Democratic member of the Assembly from this region in 34 years is offering such a bold agenda.

This district had an eight-point GOP lean just two years ago.  Now the registration gap is GONE.  400 votes separate Democrats and Republicans.  Don’t give me that redistricting stuff, nothing’s stopping this progressive wave.  I’m excited for Linda Jones and so is her community.

There’s just one day to go.  You need to Stay for Change because you can have a major impact right here in California.  I’m going to give predictions on everything in the morning.  But right now, I’m psyched.

If he were still at the Hotline this would be more specific, but unlike so many of the California punditocracy, he knows what a wave election means.

California: As unpopular as Bush supposedly has been in California, he only lost the state by 11 points in both 2000 and 2004. So what happens with McCain in ’08? I think Obama’s margin in this state will tell us a lot about Democratic enthusiasm among the base. Anything above 15 points for Obama probably means he will have some coattails down the ballot. And frankly, I wouldn’t be surprised if some two to four GOP incumbents go down, shocking  folks in Washington (Reps. Mary Bono-Mack? David Dreier?) No one is safe in this Blue state.

As we know, the latest Field Poll had Obama up by 22.  And that big a spread is going to cause some disruption.

I hear that Dana Rohrabacher dropped a last-minute mailer to Republicans, imploring them to turn out.  The latest registration numbers show that Dan Lungren is in serious, serious trouble.  This is not going to be a normal election year in California.  And it’s going to put the lie to the primary rationale for redistricting that Arnold Schwarzenegger is peddling to reporters.

Gov. Arnold Schwarzenegger said the Kremlin in Russia sees more turnover than the statehouse in Sacramento, as he made the case for Proposition 11 Thursday in a conference call.

“We have to make our politicians responsive to the people, not to the party,” Schwarzenegger said, joined by state AARP president Jeannine English and national AARP CEO Bill Novelli.

Well, the Kremlin is going to see some shakeups this year.  I don’t know if people are going to make the connection between all that turnover and the inherent fallacy that re-gerrymandering would allow for more competition, but maybe some of that late money flowing to No on Prop. 11 can make that case.  Because the facts are that the Yacht Party is on the verge of being wiped out, at the state and federal level.  And no redistricting had anything to do with it.

Congratulations to Debra Bowen.  Under her leadership, a record 17.3 million Californians are registered to vote in the November election.  That is 74.56% of total eligible voters, which isn’t too bad.  Bowen released the statistics today, and there are lots of interesting numbers in there.

Here are the county stats.  Democrats have a 2.25 million voter lead on Republicans, and represent 44.40% of the electorate, as opposed to 31.37% for the Yacht Party.  Riverside and Imperial Counties are still below the average for eligible voters (both around 65%), but well up from earlier in the year, a great boon for Manuel Perez’ efforts.  Orange County is among the best for percentage of eligible voters registered, with 86%.  Democrats have taken control in San Bernardino County, with a 10,000-vote lead.  And in San Diego County, the spread is an incredible 400 votes (539,560 for Democrats, 539,939 for Republicans).

Let’s go to the Congressional stats.

CA-03: Republicans outnumber Democrats now by just 9,000 votes, a difference of only 2.19%.  If Bill Durston doesn’t pull off the win, this is the #1 targeted seat for 2010.

CA-04: Still a hefty lead for registered Republicans, 45.94% to 31.06%.

CA-11: Registered Republicans still outnumber registered Dems here, but by only 3,800 votes (about 1%).

CA-26: Now a 20,000 vote spread (around 5.5% lead for Republicans).

CA-45: Republicans outnumber Democrats by 16,000 votes (4.6%).  This seat also needs to be targeted heavily now and in the future.  

CA-46: 31.91% for Democrats, 44.07% for Republicans.

CA-50: 31.35% for Dems, 40.55% for Republicans.

Here’s the Assembly.

AD-10: Literally 100 votes separate Democrats and Republicans here.  But you know, it’s hopelessly gerrymandered.

AD-15: Democrats have 12,000 more votes than Republicans (3.5%).

AD-26: Democrats outnumber Republicans by 5,000 votes (2.4%).

AD-30: A 13,000 vote lead for Democrats.

AD-36: Again, 100 votes separate Democrats and Republicans.  I didn’t realize it was this close.  Linda Jones has a real shot.

AD-37: Republicans have the advantage by 16,000 votes (around 6%).

AD-38: Republicans have a 9,000 vote advantage.

AD-63: That’s only an 8,000 vote lead for Republicans.

AD-78: Democrats have fully 26,000 more registered voters than Republicans (a lead of 11%).

AD-80: It’s a 15,000 vote lead here, 44.99% to 37.17%.

Six seats flipping, given the expected big turnout, is definitely a possibility.

The State Senate shows gains in SD-12 (47.33% Democratic, 33.41% Republican), SD-15 (40.86% Democratic, 34.82% Republican) and SD-19, where Democrats hold the registration advantage by a thin 1,058 votes.  2/3 is within reach by 2010.

This is not going to happen often, folks, so get it while it’s hot.

Republican Assemblyman Todd Spitzer thinks calling California’s termed-out lawmakers back to the Capitol after the Nov. 4 election is “absurd.”

“With the philosophical differences still firmly in place it is unlikely anything will be finalized” before lawmakers are forced from office on Dec. 1, Spitzer writes on his blog.

“As a termed out legislator, I feel it is absurd that my termed out colleagues and I could potentially be called back to try and fix the ever increasing budget deficit. Both sides have no incentive to reach across the aisle and accomplish anything, especially since Election Day will be in our past.”

He happens to be absolutely right.  As CapAlert noticed yesterday, a special session beginning on November 5 would have to reach agreement before the December 1 swearing-in of new lawmakers.  Throw in Thanksgiving and you’re talking about 10, maybe 15 business days, tops, to hammer out a deal.  And Yacht Party charter member Spitzer would know – the Republicans aren’t likely to agree to anything.

Why not let the will of the people express itself on November 4, and let the new solution to the budget mess flow naturally from that?  If the public wants Democrats to hold 2/3 of the legislature, so be it.  They would be making the choices on revenue and spending that they wish the legislature to enact.  To have a lame-duck session invalidates their wishes.  So much for the Governor of the people.