Michael Salerno, a professor at UC-Hastings, thinks that the Democrats do not need a 2/3 vote of the Legislature to get the tax extensions on the ballot:

While the state constitution requires a two-thirds vote to raise taxes, a proposal to extend taxes by placing the question on the ballot would not raise taxes – it would leave that question to the voters. Because the constitution is silent, it does not limit the ability of the Legislature to place a measure on the ballot effective only if approved by the voters. The Legislature has that power.

However, if the Legislature passed a resolution to place the extensions on the ballot without further action, the question would appear on the next regularly scheduled election in 2012. Obviously, this would not address the current crisis, which needs near immediate action. The Legislature may pass a bill by a majority vote to call a special election at the earliest time that is logistically feasible. If signed by the governor, that bill would take effect immediately. Why would it take effect immediately? Again, the answer is in the constitution – a bill calling an election is one of the few instances the constitution specifies that goes into immediate effect with a majority vote.(SacBee)

At which point do we give up looking for political cover to get a sane budget through?  I understand the political reasons for the Governor’s caution.  Democrats, taxes, yeah, I get it.  But there has to be a time where we just ask the people of California what kind of state that they really want to live in.  A state for the super rich? Or one for all Californians to succeed and thrive?

Salerno’s legal take on the issue is sound, though sure to be quickly tested in the courts.  To be honest, we really can’t wait much longer.  Brown and the Democratic leaders in the Legislature need to make up their minds as to whether they think getting Republican votes is a viable option within the next couple of weeks.  If not, we need to adopt some more creative solutions, whether Prof. Salerno’s plan or otherwise.

With the additional tax revenue coming in, the Republicans are already calling the tax extensions unnecessary.  However, the numbers just aren’t anywhere near that point yet, and Gov. Brown has no plans on dropping his pursuit of that revenue:

Having failed to win enough Republican votes to put the taxes on the ballot in June, the governor is expected to ask lawmakers to impose at least some of the levies first and seek Californians’ blessing after the fact, said officials with knowledge of Brown’s plan.

The governor faces rough seas in his quest for billions of dollars in additional income, sales and vehicle taxes.

GOP lawmakers’ resolve to block both a legislative vote for the taxes and a public referendum has intensified with recent news that state revenue is outpacing projections. The uptick could continue, they say, erasing billions from a $15-billion deficit.(LA Times)

Now, realistically, the best option at this point is to try to get the votes and just pass the taxes.  Getting those four GOP votes, however isn’t exactly a walk in the park.  So, we’ll get some sort of vote if we are ever able to get the taxes through.  Of course, at the same time, it is clear that Democratic super majorities are really the only way to create sustainable governance.  And hey, it might be possible.

I have a really hard time believing that this game of chicken will really end with the corporate powers really letting their GOP puppets decimate California’s infrastructure and educational systems, putting aside our other moral imperatives.  That being said, this is a high-stakes game of chicken, with more than a few parallels to the debt ceiling crisis in DC.  It will get resolved, but meanwhile we are on the tracks with a freight train heading right for us.

In Sacramento, dumb ideas don’t have a party affiliation.  Dan Walters calls out Democratic Santa Clara County Assemblyman Jim Beall out for a doozy:

Assemblyman Jim Beall, D-San Jose, is carrying Assembly Bill 81, which would protect airlines from paying higher sales taxes on their fuel purchases in California when prices spike upward. It would levy taxes on the average of spot fuel prices for the preceding five years, rather than on the current price.

The State Board of Equalization estimates that if enacted, the measure would reduce sales tax revenue by $108 million a year – just about what Vasconcellos’ software loophole costs, interestingly enough.

Like the Vasconcellos measure, the Beall bill would grant corporations a tax break that ordinary consumers don’t get. Motorists would still pay higher taxes when fuel prices spike. (SacBee)

At a time of budgetary crisis, this is an exceedingly bad idea.  It puts stability of the airlines fuel taxes over the stability of our schools.  United’s bottom line over health care services for the elderly.

We already have too many loopholes in a disorganized and inefficient tax system, it’s not time to create more.

Its never good news to hear a state has a budget deficit. But this recent article in The Economist made me a little happy for a couple of reasons. One, I was really tired of hearing conservatives (like Meg Whitman in 2010) praise Texas as a model for California. So hopefully that won’t happen again. Two, its a vindication that California is not broken just because were lazy or some other variety of insults hurled our way from the other 49.  It shows that regardless of the economic system, the bipartisan consensus was over-reliance on a massive bubble.  

Many, if not all, will argue my view that the left’s model of government-as-charity is unsustainable.  But the the progressive case against the conservative model of government-as-corporation has been proven with the demise of Texas’s “economic miracle.”  So there are a few lessons here, and most demonstrate why Texas and California can’t be compared now or in the future.

1) The Dutch Disease.  California is the third largest oil producer but due to our economy and size we are not an energy exporter. An oil tax exactly modelled on the one in Texas would generate revenue but cannot be a large enough cash stream to support our state.  Texas is still over-reliant on its energy sector. It will receive a windfall with the current mideast crisis of the day. Don’t be surprised if this contributes to a recovery and is used as proof that the Texas Model “works.”  California conversely will suffer economically due to high gas prices. People should be aware that the ups and downs of the energy market don’t demonstrate which system is better only that both systems are not properly buffered for it.

2) Environment. An issue conservatives cringe at in California and abhor in Texas. But the thing is, our mild climate and natural beauty can’t be found or replicated in Texas. As oil is to that state, the environment is a resource to us. Its a strong enough resource in fact that the wealthy will continue to live here regardless of the tax situation (much like they live in France).  

3) Taxes. Our environment opens the door to higher taxes on the wealthy as long as its packaged as the price to live here. But it doesn’t open the door to high taxes on ALL corporations. Companies that are high tech and want to attract people that want to live the California lifestyle can afford those taxes. Companies that require low-cost labor and are face stronger market competition (the non-Apples) cannot.   Texas does grow more low-cost labor jobs and manufacturing. Granted there is not a high margin on that production but high-end producers that California is known for cannot employ all of us. Both no-taxes Texas and higher taxes California are too broad brush. A more nuanced corporate tax code may be needed.

4) Education.  As the article points out, Texas aims to entice intellectual talent with no income taxes and more jobs instead of growing it natively with its education system. Its definetely a cheaper way to go, but is it sustainable? California’s education system currently relies on its upper institutions to draw talent and hopes that its lifestyle and environment will keep them after graduation. I think California is the model to bet on, not (just) because of state pride, but Texas opens itself up to a race to the bottom situation.

5) Jobs.  The Texas Model trumpets no income taxes and uses this to draw talent from across the nation. California, often called (incorrectly) the highest taxed state, uses taxes to provide services that higher educated/higher income people come to expect – well maintained roads, good schools, beautiful parks etc.  The Texas job numbers were high last year but it appears that those were primarily lower-income jobs (some numbers said 2/3rds of all jobs created). Of course those are important jobs but not revenue generators or economic growth contributors like high tech. Bottomline, Texas plans to attract the lowest bidder (those that don’t want to pay taxes). Like Wal-mart shoppers they don’t expect frills or high quality products and services. California is like  (insert expensive store of your choice, I won’t play favorites) it gives you high end stuff and you expect to enjoy the experience not get the deal and rush out.  But unquestionably its expensive, Californians need to decide which “store” do we want to be?

I have some thoughts on the issue but open it to all, what is California to do next?

In polling, the answer you get depends heavily on the question. Obvious enough, right?

Few should understand this point better than the prestigious, independent Field Institute, whose polls on California issues often contribute to the public debate.

So why is Field polluting the discussion around revenues in California with bad questions and bad data?

We can and must do better, and soon.

The most recent Field Poll scans the horizon for support levels on prospective special-election issues

(get the poll here, and the fascinating cross-tab results here).

It’s helpful to see, in this poll, where Californians would cut to help reduce the state budget deficit. Basically, most voters would cut nothing except prisons and, perhaps, the costs of environmental regulation. Republicans would cut a lot more, except K-12 public schools.

The broad consensus is against almost any cuts that would be needed to meet the state’s widening budget chasm.

So are people willing to support new revenues? (OK, let’s go ahead and say “tax increases.”)

Not according to Field. But look at how they asked the question. Registered voters were asked to respond to: “I would be willing to pay higher taxes to help the state balance its budget.”

Even that poor wording got 43% support overall. Democrats and independent voters gave it 53% support.

But look at what’s missing in the question. The wording speaks to who would pay the higher taxes – the respondent – but how much? And for what purpose?

There’s no limit stated, no type of tax enumerated. And the purpose is as grim as they get: “help[ing] the state balance its budget.” If you have ever seen California voters talk about the state budget, they view it as a black hole rife with waste.

It’s astonishing that there’s a core of 43% willing to shovel their own money into a ditch to help “the state” fix “its budget.”

Of course there are many better ways to ask this kind of question. For instance, you could ask voters if they’d pay more to protect the specific programs and services they like. (Which is basically everything but prisons.) Linking tax increases to specific purposes helps a lot.

Or you could ask about specific kinds of taxes that don’t mainly affect the individuals responding to the poll. An oil extraction tax gets big numbers in polling for lots of reasons, one of them being who it’s targeted at (highly profitable oil companies).

An increase in income taxes on the wealthiest Californians similarly scores well because – as much as we may try – most Californians don’t fit into the top 1%, 5%, or even 10% on the income scale. (Disclosure: I managed the campaign for Prop. 63, which added a 1% surcharge on annual income over $1 million to support mental health programs.)

And if you present the facts properly, I’d bet you’d see majorities supporting a split-roll property tax, or at least a fix to change-in-ownership rules for commercial property.

We need to educate voters about the degree to which we have a revenue problem that’s been papered over for 20 years and salvaged occasionally by bogus economic bubbles. There are lots of sensible ways to raise money and not have undue impact on the people who can least afford it. If there’s ever going to be a time to find billions of dollars in steady new revenue sources, we’re pretty near the “hair on fire” phase now where that will be both necessary and possible.

Don’t believe you’d be limited to 43% support for a raft of revenue measures. Smartly designed, longer-lasting revenue solutions will have an audience – an even bigger audience if we don’t see this special election happen, or if the tax extensions fail and we flop into devastating austerity. Let’s get to work now.  

Over at FireDogLake, former Calitics blogger and current slayer of falacies David Dayen, takes on the California budget.  Specifically, he calls out Brown’s budget for a lack of bravery, in the face of a growing chorus of “responsible” voices in the news praising Brown’s actions.  Sure, he’s making cuts that Democrats wouldn’t ordinarily make, but that’s just buying the Republican frame.  Is he getting to the deeper points?

But Brown has ducked many more fundamental governance issues in the state. He hasn’t gone near a tax structure where people making $47,500 a year pay the same in income taxes as those making $999,999. He won’t approach the third rail of California politics, the artificially low property taxes resulting from Prop 13. He won’t expand the sales tax to cover services, which would allow the rate to be lowered while still gaining more revenue (and becoming more progressive, as higher-end services get used by wealthier people). He’s basically doing the bare minimum possible on revenue generation, and even then he won’t commit to raising them himself, preferring to put them up for a vote of the people.

As for the spending cuts, they will be utterly devastating; California already cut the less necessary stuff in prior years of the crisis. And by and large, Democrats in the legislature are going along with it. In the Schwarzenegger years, you’d have a lot of resistance to very similar cuts, both from the outside and the inside. These days, state Democrats don’t want to cross their own governor, and so they’re basically carrying out his wishes. They tell everyone they don’t feel good about it, but that’s of little solace. (FDL)

Redevelopment has been getting much of the attention, but the heart of the cuts is to the social safety net that the Democrats have been working to protect from Governor Schwarzenegger’s raids.  Yet now we are making many of these same cuts.  Meanwhile a full 20% of California families are struggling to even afford enough food:

One in five Californians struggled to afford enough food for themselves and their families last year, according to a new report by the Food Research and Action Center.

The rate in California was slightly higher than the national average of 18%.

Jim Weill, president of the Washington-based nonprofit, said the figures underscore the need for a strong nutrition safety net – including food stamps and school meals – for families that continue to struggle as the economy begins to recover.

“While the nation’s Great Recession may have technically ended in mid-2009, it has not yet ended for many of the nation’s households,” Weill said in a statement Thursday. “For them, 2010 was the third year of a terrible recession that is widely damaging the ability to meet basic needs.”(LAT)

At a time when Californians need more help than ever, we’re closing down our doors and spending a smaller percentage of the state’s personal income for over 40 years. Yeah, that’s right, Brown’s proposed budget would spend just $5.05 per $100 earned, the lowest such figure since Reagan’s 1972-73 budget.  Put simply, we don’t have an out of control tax system, we don’t have a spending problem, we have an obstinate minority that insists on a selfishness of spirit that California hasn’t known before.

I give Brown credit for doing what he thinks he must, perhaps in the only way he thinks possible.  But we’re losing part of what made us great.  There was once a feeling that anything could happen in California, that whatever we worked together toward would be accomplished.  We built an outstanding K-12 education system and the greatest public university system in the world.  We built the information based economy.  We built a network of infrastructure that made tomorrow look better than yesterday.

Today, we are just trying to survive for ourselves. Some of us can’t feed ourselves, while others are grabbing crass and obscene wealth.  Is this really the best we can do?

Here’s the thing: The Republicans understand that there have to be some additional revenues.  They know that even they couldn’t come up with the full $25 Billion in cuts in any way that could possibly help them politically. But, on the other side, they are terrified of their own base.

This is where it gets interesting.  Sen. Bob Dutton, the Republican Leader in the Senate asked the Legislative Counsel if there is any way for the Democrats to put something on the ballot on their own, sans the 2/3 majority.  Now, Dutton would probably tell you out in public that this is just to stop the tax hikes or something like that.  But, you have to think that Dutton was secretly hoping that the Democrats could do the dirty work while the Republicans could maintain their ideological purity by never voting for anything that possibly resembles an increase in taxes.

Speaker Perez, for his part, doesn’t seem to be taking the bait, and has cast that aside right from the get-go:

Assembly Speaker John A. Pérez said Wednesday that he has no intention of sidestepping Republicans by trying to place a tax-extension measure on the June ballot by a simple majority vote of the Legislature.

Pérez downplayed a legislative counsel’s opinion, sought by Senate Republican leader Bob Dutton, that indicated such a measure could be placed before voters without the support of GOP lawmakers, under narrow circumstances.

“No,” Pérez said flatly when asked if he is entertaining such a plan for the tax measure proposed by Gov. Jerry Brown to raise $11 billion for the fiscal year that ends June 30, 2012.

“There is not a single legal analysis that I think holds any water that says we could legitimately put this question before voters on a simple majority vote,” Pérez told the Sacramento Press Club. (SacBee)

I’ll admit, I’m a bit split on this move.  From a practical standpoint, I’m a bit skeptical that the Democrats will, in fact, be able to lure enough GOP votes.  Keeping open the majority vote measure as a way to whip some GOP votes into making some sort of deal seems to make some sense.

But, guessing at the Speaker’s logic here, in order to pass this thing at the ballot, you are probably going to need at least nominal GOP support.  If you have them running around saying how awful this package is, it could create a pretty dicey situation for the actual election.

At any rate, despite the Speaker’s protests, I would still not count out the concept of a majority vote measure quite yet.  

Timm Herdt of the Ventura County Star focuses on a statement from Nevada Governor Brian Sandoval in today’s must-read column:

One thing that hasn’t changed in Nevada is that its Republican politicians continue to be fiscal conservatives. But if GOP lawmakers from California were to return to Reno this year to pick up any lessons, they might be surprised at one thing they’d learn.

They’d find out that the state’s constitutional amendment, passed in 1994, that requires any tax increases be approved by a two-thirds vote of legislators includes a provision that gives ultimate authority to voters. To place a tax increase proposal on the ballot, it says, shall require only a simple majority vote of lawmakers.

Republican Gov. Brian Sandoval, who promised during his campaign to oppose any tax increases, appears to also believe that a public vote on taxes ought to carry more weight than his own opinion.

Asked whether he would sign a bill to put a tax increase on the ballot, Sandoval this week told the Las Vegas Review-Journal, “We’ll cross that bridge when it comes, but I’ve always been supportive of people’s right to vote.”(Ventura County Star)

Now, let’s say this first, Brian Sandoval is nobody’s moderate.  He’s a pretty right-wing governor, and hardly somebody that you could really call anything other than anti-tax/anti-goverment.

But, in the system we have out west, governments frequently defer (for better or worse) to the people.  Perhaps Tony Strickland and his TeaParty Caucus should consider the fact that despite what Grover Norquist is telling them, a vote for Brown’s budget package will increase no taxes.  That’s up to the people, and unless Tony and the Gang don’t trust the people, he should get moving on that pronto.

As Governor Brown continues to fight to get some sort of revenue measure on the ballot, it is also very likely that we will also see a tobacco measure at the same time.  Former Senate President Pro Tem Don Perata and cycling legend and anti-cancer activist Lance Armstrong are aiming to create a roughly billion dollar per year cancer research program.  

“When you walk through the institutions of this state, the potential there is tremendous,” the seven-time Tour de France winner said during a news conference at Cedars-Sinai Medical Center. “Whatever happens and is created, or is invented, or changes in California, goes everywhere …. We will have more and more cancer survivors all over the world.”

The initiative, which would raise as much as $855 million in its first year of implementation, according to an analysis by the state’s legislative analyst, could be placed on the ballot as early as June if Gov. Jerry Brown succeeds in calling a special election to address the state’s budget gap. (LAT)

Of course, as we saw when the last tobacco tax was on the ballot, Big Tobacco is going to fight this voraciously. Last time they spent $66million to defeat it, and you’d expect at least $50 million for this measure.  Having the measure this June might change the voter demographic that the proponents were going for.  However, under state law, qualified measures (which this has done) must go on the next statewide ballot.

So, how will this interplay with Brown’s measures? Well it is tough to say exactly, but as the Times Maeve Reston points out, it will hardly be a good thing for a $50million anti-tax campaign to be occurring at the same time you are trying to pass the sales tax continuation.

Speaking of the tax continuation, it is rapidly becoming clear that the Legislature is actively looking for ways to get something on the ballot without 2/3. Don’t be shocked if the Republican votes never show up.