Tag Archives: budget crisis

Brian Dennert of the VC Star Interviews Eric Bauman

On Thursday, Brian Dennert of the Ventura County Star blog Brian Dennert Here had an an excellent and informative interview with current LACDP Chair and CDP Vice-Chair Candidate Eric Bauman.

Dennert talked with Eric about Proposition 8, partisanship, the budget crisis and much more.  Here’s a taste:

Q: The state budget is in obvious trouble with problems obviously this year and in coming years. Many point to the contracts with state workers including pension obligations.

Within that context do you remember the last time you disagreed with the tactics, budgetary priorities, or views of any of the large state unions both public employees and private sector unions?

A: California’s budget situation is a disgrace. This governor was elected on a pledge to “cut up the credit cards” and sweep the special interests out of the Capitol.

In the end he has done neither. Under his watch we have a far larger deficit than we did under Governor Davis and the divisiveness between the parties is at an all time high.

This governor cannot deliver a single Republican vote for his budget plan and it is so bad the members of the Republican caucus wore name tags to a meeting with him because he has so little

contact with them.

While Democrats have put compromise after compromise on the table, and even the governor has acknowledged the need for new revenues, not one Republican is willing to compromise.

This governor has failed and his Republican colleagues have sold him down the river,

As to the old saw that this is the fault of the public employee unions, you and I both know that is nonsense. This fiscal crisis began when Arnold unilaterally reduced the state’s revenue by four billion dollars by cutting the vehicle license fees.

It has worsened as out economy has tanked and our outmoded tax system has been unable to maintain any balance. My goodness, more than 52% of our state’s revenues come from personal and business taxes, the most volatile possible source.

Yes, our state employees are reasonably compensated and they work hard for their money. And yes they are willing to talk about reasonable compromises to help out in this crisis. But those who are our highest earners and our largest businesses should pay their fair share and we should close every ridiculous tax loophole that we have extended to the wealthy, like the yacht tax loophole.

Finally, there are only four ways to close this budget deficit – cutting spending, raising revenue, borrowing and reforming the system, for real. Democrats are willing to do all of the above. Republicans need to get with it…

For a good read, head over to Brian Dennert Here for the rest of the interview.

Extremist Republican Tony Strickland Causing Trouble Already

Cross-posted at Ventura County Democrats

Fresh off winning by a sliver of a percentage point by pretending to be an “independent” with “green” credentials, Tony Strickland is already causing trouble.  In a move that will surprise absolutely no one but the moderate voters unfortunate enough to get suckered by Strickland’s con artistry, Strickland is already carrying water for his friends in the extremist Republican Yacht Party.

As California attempts to cut spending and raise revenues to avert a fiscal disaster, Tony “Independent Green” Strickland is standing once again to the right of his own Republican governor in insisting that the perfectly legal and eminently reasonable Democratic budget plan is somehow unconstitutional.  It matters little to Tony Strickland if California falls into the sea, economically speaking, so long as his corporate friends in the oil industry are taken care of.

From the VC Star:

The Constitution allows fees to be implemented by a majority vote and also allows lawmakers to pass tax measures that are revenue neutral with a simple majority. Democrats asserted their plan met both of those tests.

Anti-tax groups, with the support of GOP lawmakers, had vowed to challenge the plan in court had it been enacted.

Sen. Tony Strickland, R-Moorpark, said the Democratic plan “circumvents the Constitution and the will of the people. I think they know it’s unconstitutional. If they really thought this could be done, it would have been done a long time ago.”

Despite the concerns of other Republicans, Schwarzenegger said he would have signed the Democratic bills had they included the economic stimulus provisions he is demanding.

In the end, both Schwarzenegger and Strickland are opposed the Democratic budget solution, but for different reasons.  Our own Pedro Nava is on point as usual about the ramifications of failure to pass this badly needed budget:

“If he doesn’t sign it, he needs to explain to the people of California about the 200,000 construction jobs that will be lost,” said Nava, whose district includes Ventura and much of Oxnard. “He needs to explain to the 200,000 people out of jobs why he doesn’t think he got enough of what he wanted.”   [snip]

“I am bewildered that Republicans fail to recognize the urgency,” he said. “This is like your house is on fire and you’re trying to put it out and the Republicans are objecting because you’re not using the right hose.”

For Republicans like Strickland, however, the entire point is to allow the house to burn down.  When you’re part of an extremist party interested only in draining the swamp and making government so small it can drown in a bathtub, bankrupting the State isn’t a bug–it’s a feature.  A feature explicitly designed to destroy progressive advances across the state.

And all this being done by a Yacht Party (with Tony Strickland as one of its premier captains) incapable coming close to majorities in either the State Senate or Assembly, and only capable of electing a governor by nominating a movie star in the wake of a trumped up recall election.

Time for a Total Recall – Schwarzenegger’s Gone Too Far!

It’s time to recall Arnold Schwarzenegger from the Governor’s seat in California.

He claims that the state is in a cash crisis. He’s also committed himself to not raise taxes, and to cut them wherever possible.

Well, now he’s moved beyond cutting taxes. Now he’s cutting wages. And that’s the point at which I say, “It’s time to recall this guy.”

Come with me after the jump for some reasons why, starting with the fact that he lied about the state having a cash crisis, and that he’s the one who’s responsible for creating this budgetary problem in the first place.

When he orders that 200,000 state workers’ salaries be slashed to the federal minimum wage of $6.55 per hour, and that 20,000 or more state workers be laid off entirely in order to balance the state budget, it’s time to think about recalling him. When he refuses to sign any bill at all, and further states that he may start vetoing all bills that reach his desk until his budget gets passed, it’s beyond time to think about a recall and start acting on it. When it’s discovered that the state does not have a cash crisis, and that this wage-slashing stunt has no real point except to frighten state workers, it’s time to talk about stronger censures than a recall.

But let’s start with that.

Schwarzenegger’s commitment to slashing taxes has finally come back to bite him, and by extension the state, in the ass. His refusal to sign bills that have, in some cases, been working their way up to his desk for several years shows that he still thinks the way he did as a movie star – that if he just bluffs hard enough, people will buy it. He figured if he could bluff his way through several mediocre action films, he could bluff his way through the political arena as well. He learned his lines: “tax cuts” and “fiscal responsibility,” figuring that saying the words would distract people from the consequences of his actions.

It isn’t working anymore. It’s time for him to stop.

Folks, taxes are a fact of life. You must pay them. Period. If you don’t, the state doesn’t have the money to do its jobs. Period. It is unconscionable to penalize working-class people for the budget shortfall when the government will not institute reasonable and necessary taxes to ensure reasonable and necessary income for the state.

It’s time to ditch the movie star, folks, and put someone in office who understands the realities of the situation: government costs money. That money should be raised by taxation, not by cutting state workers’ salaries by 2/3. Penalizing the workers because the government chose not to raise the necessary funds from the entire population? That, as columnist Dan Walters says, is nothing more than a movie-star stunt.

I don’t want a movie star running my state. I want a governor who gives a damn about the people who work for him, and the ones who work for them, and the ones who work for them. I want a governor who acts like an adult, even when being an adult isn’t pretty or fun or glamorous. I want a governor who works for compromise, instead of demanding “my way or the highway.” I want a governor who will work things out without harming the people who can least afford to have their pay slashed to the floor.

Yes, it’s great that Arnie opposes the ballot initiative that would take away my marital rights. But he has to do more than that. He has to do the really hard stuff: act like an adult about the money situation, and accept that government requires revenue. Act like an adult and stop lying. Act like an adult and stop throwing tantrums.

His job is to make sure that the needs of California’s workers are provided for. It’s his job to put out these budgetary fires before they threaten to burn down the Capitol. What he’s done, instead, is to tell the people who can least afford a pay cut that the budgetary crisis he’s created is their fault and that they will be the ones to pay for it, not him. That’s like a parent dropping the family money crisis on the shoulders of their sixteen-year-old kid.

I have a great idea to balance our budget in this state. Let’s tax the Governor. Let’s demand two-thirds of all the income Schwarzenegger ever made from his movies, and funnel that money into the state coffers. Perhaps then he’d get a glimpse of what it’s like to be part of the working class.

Who’s responsible for this financial crisis? He is. Who should pay for it? I think he should.

And if we can’t make him pay financially, then we should make him pay politically.

It’s time for a recall. Who’s with me?

Crossposted from my diary on Daily Kos.

Increased State Spending Will Spur Economic Growth In California

The California Budget Project released a report on Friday entitled “Budget Cuts or Tax Increases: Which Are Preferable During an Economic Downturn?” Their findings? Well, let’s just say their findings have proven the Republican minority wrong once again. “Carefully chosen tax increases are preferable to cutting public spending when the economy is weak.”

The economies of states that substantially increased taxes in recent years performed as well as or better than those of states that did not. States that enacted large tax increases between 2002 and 2004 – increasing state revenues by at least 5 percent – subsequently experienced stronger average growth in personal income than states that did not increase taxes at all. Additionally, average job and wage growth was essentially the same for states that increased taxes the most during this period as it was for states that did not increase taxes. Moreover, states that raised taxes substantially are considerably less likely to face budget shortfalls this year than are states that did not.

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But is the opposite true?  Well, pretty much yes.

The economies of states that enacted large tax cuts in the late 1990s and early 2000s performed worse than those of other states. States that enacted large tax cuts between 1994 and 2001 – reducing revenue by at least 7 percent – subsequently experienced weaker growth in jobs and personal income and larger increases in the unemployment rate, on average, than other states. Furthermore, the states that enacted large tax cuts faced larger budget shortfalls when their economies weakened.

In the meantime, Assembly Budget Chair John Laird (D-Santa Cruz) released the Assembly Budget Committee’s Conference Report on the 2008-2009 State Budget earlier today. The Conference Report calls for some budget cuts but proposes $8.2 billion in increased tax revenue to balance California’s budget without drastically cutting public spending on vital services. The CBP report gives ample justification for the approach that Laird and the Assembly Democrats are recommending.  

According to Nobel Prizewinning economist Joseph Stiglitz, when the economy is weak, “economic theory and evidence gives a clear and unambiguous answer: It is economically preferable to raise taxes on those with high incomes than to cut state expenditures.”

State spending reductions could further exacerbate the weak economy. Consumers buy less and businesses produce less when the economy is weak. Therefore, the key to promoting the state’s economic growth in the short run is to encourage spending on goods and services. Stiglitz writes: “In a recession, you want to raise (or not decrease) the level of total spending – by households, businesses and government – in the economy. That keeps people employed and buying things, and makes it more likely that businesses will want to invest to serve that consumer demand.” However, state spending reductions have the opposite effect: Each dollar less that the state spends generally reduces consumption by the same amount.

Penny

Online Organizing Director

California Democratic Party

Budget Deficit Now at $16 Billion

UPDATE by Brian: You can listen live to Which Way LA live here and then get the archives here or at iTunes. Robert’s going to be on iTunes! I’m excited to hear what Robert has to say.

I will be on Warren Olney’s show on KCRW 89.9 at 7pm tonight to discuss the latest news from the state budget front. The California Legislative Analyst, Elizabeth Hill, has announced that California now faces a $16 billion budget deficit. In her press conference, as reported by the Sacramento Bee, she sharply criticized Arnold Schwarzenegger’s approach to the budget:

In a critical look at Schwarzenegger’s spending proposal, Hill called his administration’s budget-balancing approach “flawed” because it fails to prioritize state programs.

“We recommend the Legislature reject the administration’s across-the-board (cutting) approach,” the report said.

The report lays out an alternative budget that proposes to eliminate nonessential state programs, shift programs to local control and reduce school funding by less than the $4.3 billion the governor suggested. It also recommends closing tax loopholes to add revenue in a “reasonable manner.”

As an impartial analyst, Hill cannot say what is obvious to us all – the bill for 30 years of frivolous tax cuts, such as giving wealthy yacht owners a tax break while threatening to close parks and fire teachers, has come due. Republicans insist on cutting core services of our government, preferring to make it difficult to get a decent education, kicking sick children off of health care coverage, and abandoning our natural heritage instead of making sure all Californians are paying their fair share.

As we enter what is likely to be a nasty recession, the last thing this state should be doing is destroying the kinds of public services essential to a modern society and a developed, robust economy. It is long past time for us to end the structural revenue deficit that has produced this recurring crisis, from the wasteful elimination of $5 billion in VLF revenue at the beginning of Arnold’s term to the various tax loopholes and favoritisms that have plagued us since 1978. California is at a crossroads – will we rise to the occasion, or stand by while Republicans destroy what remains of the California dream?