Looks like Darrell Steinberg is hedging his bets on fixing the broken political structure in Sacramento by going to the ballot to protect children’s health coverage:

Days after Gov. Arnold Schwarzenegger proposed to abolish the Healthy Families Program (which would entail booting more than 900,000 California kids out of health insurance), Steinberg’s Committee for a New Economy on Monday made a $75,000 contribution to Californians for Children’s Health – a sizable cash infusion for a committee that previously had only about $20,000 in its coffers.

The statement of organization for Californians for Children’s Health says the group – for which a Web site is under construction – exists to support “expansion of children’s health coverage,” and its sponsoring organizations include the Children’s Defense Fund Action Council; the Children’s Partnership, a project of the Tides Center; Children Now; and PICO California. Its CFO is PICO California director Jim Keddy; its secretary is Kelly Hardy, Children Now’s associate director for health.

Hardy earlier today told me Californians for Children’s Health aims to develop a ballot measure for November 2010, and although today’s rapidly changing budget environment makes it hard to say exactly what that measure’s specifics will be, “we’re contemplating new revenue sources that would come in, not General Fund sources, that would support children’s coverage programs.”

Steinberg has a history of going outside General Fund revenues to pay for social services projects – see the millionaire’s tax in Prop. 63, which funds mental health programs.

You need to play within the hand dealt, and voters have shown a willingness to use tax increases to fund specific programs.  Losing the Healthy Families Program would mean 900,000 kids without health care in California, and we would be the only state in the country not accessing federal SCHIP funds.  So obviously, you try to get that revenue absolutely any way you can.

At the same time, is this any way to run a government?  Create a system where no revenues can be raised inside the legislature, forcing stakeholders and politicians to go to voters to look for a dedicated stream here and another dedicated stream there?  This is unsustainable to the nth degree.  We will not transform California one dedicated funding stream at a time.  It just won’t work, and we’ll spend hundreds of millions of dollars on consultants in the process.  Steinberg shouldn’t foreclose the option, of course, but his money would be better spent on reform efforts so that he no longer needs to go to the voters for everything, and we can have a representative democracy such that has worked in America for over 220 years.

Moreover, I fear that Steinberg is setting this fallback plan up assuming that Healthy Families will be either eliminated or gutted in the next couple weeks.  Perhaps the donation to a potential ballot committee is a threat to the Governor; but perhaps it’s a signal that the cuts can come down.  Let’s be clear – in the meantime, while we wait for the results of that election, children will die from a lack of health care coverage.  We have other options – Jean Ross describes some of them beautifully here – and the Democratic legislature should be drawing lines in the sand, not giving up on drastic cuts and making contingencies.

As David Atkins discusses today, the decision on Prop. 8 by the State Supreme Court basically elevates the people as a Fourth Branch of government that cannot be countermanded by the judicial branch, no matter what their whims decide.  The Court said, “the system may be broken – depending on your perspective – but that’s the system we have, and we’re powerless to do anything about it.”

Thoughts at this point turn to the need for a transformation of this Constitution, to restore the balance of representative democracy, with a judiciary enabled to determine Constitutionality, with a legislative branch given their mandate by the people to reflect the popular will, with an executive secure in his or her role. While I do not believe that “the people” should be endlessly demonized for the options they have been given by a flawed process, I do believe that the verdict has been delivered on this form of government, and delivered as a failure.  In an extraordinary discussion unrelated to the Prop. 8 case, the Governor today basically admits California is ungovernable even while vowing to follow the “will of the people,” a will which he fails to properly define.  Most of the rant Arnold made today involves him whining that he’s not allowed to be a dictator.  But some of it is brutally revealing.

Gov. Arnold Schwarzenegger considers himself a glass-half-full guy, and he ended his California Small Business Day speech in Sacramento with a dose of optimism. But it seemed clear the governor has just about had it with California’s governance system, especially after last week’s special election was a colossal failure. Though he blamed many of the state’s budget problems on the current economic collapse, he said part of our woes are “self-inflicted.”

“California hasn’t had a responsible fiscal system since Earl Warren in the late ’40s and early ’50s,” he said.

The governor ticked off a number of complaints about the system this morning:

• The state relies too much on personal-income and capital gains taxes.

• The state doesn’t have a spending cap, nor a “rainy-day fund” (the latter point is questionable given that Schwarzenegger asked voters to establish a “rainy-day” reserve in 2004, albeit one with weak restrictions).

• Federal judges tell California how to run its prison health-care system.

• Federal stimulus rules restrict how California can cut from its budget.

• California requires a two-thirds vote to approve the budget.

• An “endless list” of ballot-box budgeting requirements, including Propositions 13, 42, 49 and 1A, all of which he has championed in the past.

“Until we fix our system, nothing will ever change,” Schwarzenegger said. “This is no way, of course, to run a state.”

He’s crying about “federal judges” who merely enforce the Constitutional right of prisoners not to be allowed to die as a cause of their incarceration.  And the federal stimulus rules don’t restrict a damn thing, they merely require a certain threshold of service to qualify for federal funds.  Waah waah waah.  But the last two are truly amazing.  Schwarzenegger ADMITS the two-thirds rule has completely hamstrung government, and that “an endless list” of ballot-box budgeting have distorted the balance of power in California.  Prop. 49 is the after-school program initiative that SCHWARZENEGGER HIMSELF put on the ballot prior to his tenure in office.

Arnold’s press people tried to walk this back today, but this was a Kinsleyan gaffe where he made the mistake of telling the truth.  Schwarzenegger has always wanted to claim to know the will of the people, and he pretty much got it right when he let his guard down today – Californians want a functional government with a basic level of services funded equitably, and they want lawmakers to do the job they were elected to do.  “The people” are a Fourth Branch who want no part of being elected or serving.

The next batch of gubernatorial wannabes have a mixed record on Constitutional reform.  Some reports claim that they are more interested with the rhetoric of change than offering anything specific and incurring the wrath of the unelected Fourth Branch.    If in fact candidates run in this fashion, they will discover an electorate actually more interested in solutions than mantras, more interested in fundamental reform than careening along this unsustainable path.  And 19 months later, when one of them sits in the office in Sacramento and actually looks deeply at the situation in which they find themselves, they’ll have wished longingly for a whole raft of specific reforms they could implement right away.  Because otherwise, they will sink under the weight of a top-heavy, broken governmental system.

Virtually the entire political leadership in Sacramento took without questioning the view that the overwhelming loss of the special election is somehow a mandate for “living within our means” and deep, drastic cuts to the budget.  The Washington Post, the Los Angeles Times (in multiple venues) and most other publications provided uncritical coverage of the Governor and even leading Democrats, parroting this theory that “the voters spoke” and the message was that only cuts would be allowable from this point forward.

Beware of any sentence that starts with the words “What the voters told us was…”  Far too often in our politics, dishonest lawmakers decide that voters mandate their particular ideologies and preferred policy decisions regardless of the facts.  Perhaps the only real message delivered from the voters to lawmakers was that the former doesn’t particularly like or trust the latter.  But there are other possibilities.  A new polling memo by David Binder Research details why Prop. 1A in particular failed, and the results do not match the Governor’s ramblings.

Contrary to what the Governor is saying after the defeat of his proposals, Prop 1A did not fail because voters delivered a message to “go all out” in cutting government spending. The all-time record low turnout for a statewide special election clearly demonstrates the lack of depth to that argument. Prop 1A did not

generate a spike in turnout and taxes were not cited as the main reason why voters overwhelmingly rejected Prop 1A.  Support for a state budget that relies solely on spending cuts is very limited – even among those voting no on Prop 1a.  

Voters in this election were more likely to be Republicans and less likely to be Independents, whereas Democratic voters came out in proportions consistent with past turnout. Of those that voted in this election, 43% were Democrats, 42% were Republicans and 15% were Independents or minor party voters. This past November, the electorate consisted of 46% Democrats, 32% Republicans and 22% Independents or minor party voters.  

In November 2010, the electorate will be a group that is more supportive of the revenue options tested in the survey, and more strongly opposed to only using cuts to balance the state budget. While only 36% of voters that turned out for the May 19th election supported using entirely budget cuts to balance the budget, even fewer – only 24% — of non-voters felt the same way […]

Voters simply do not trust the leadership in Sacramento, and recognize that the failed special election was just another example of the inability to bring real solutions to voters. When given two choices, four out of five voters – even among those who voted ‘Yes’ on 1A – agreed that the special election was just another example of the failure of the Governor and Legislature, who should make the hard decisions necessary to really fix the budget. Only 20% agreed the special election was a sincere effort to fix the state’s budget mess.

I would argue that the voters feel no trust in the legislature because they see time and again policy solutions that stick the average Californian with the bill that the wealthy and well-connected don’t pay.  The fact that the only permanent tax issue in the February budget was a $1 billion dollar tax cut for the largest corporations in America is a perfect example.

The polling memo also shows broad support for tax increases in a variety of areas, including wiping out this massive corporate tax cut:

75% support increasing taxes on alcoholic beverages (62% support among ‘No’ voters)

74% support increasing taxes on tobacco (62% support among ‘No’ voters)

73% support imposing an oil extraction tax on oil companies just like every other oil producing

state (60% support among ‘No’ voters)

63% support closing the loophole that allows corporations to avoid reassessment of the value of

new property they purchase (58% support among ‘No’ voters)

63% support increasing the top bracket of the state income tax from nine point three percent to

10 percent for families with taxable income over $272,000 a year and to eleven percent for

families with taxable incomes over $544,000 a year (51% support among ‘No’ voters)

59% support prohibiting corporations from using tax credits to offset more than fifty percent of the

taxes they owe (55% support among ‘No’ voters)

In addition, voters oppose the kind of spending cuts outlined by the Governor.

Now, I’m sure I’ll hear “eat it, you pipe dream librul hippie” because of the structural issues that prohibit these kind of tax solutions.  But the reason that the legislature has such desperately low esteem right now is that they fail to publicly even advocate for the solutions Californians plainly want, or the breakage of the structural barriers that would provide it.  This failure caused the May 19 debacle and will cause further problems for the Democrats in the state if they are not careful.  A political party seen as devoid of principle will not be a successful political party forever.  What Californians desire, essentially, is leadership.  And they will punish those who refuse to give it to them.

UPDATE by Brian: I’ve posted the slides for the Binder Research presentation over the flip.

Why Prop 1A Lost Powerpoint –

Well, this is it.  After three months of argument, threats, projections, facts and figures, the special election on the budget has finally arrived.  Voters now get to decide the fate of six ballot measures that will impact the near-term budget deficit and the long-term manner of budgeting in the state.  Well, a FEW of the voters get to decide.  I popped by my local polling place just to see the crowd size – I already voted absentee – and let’s just say that the traffic was, er, light.  

So here are a few lessons as we watch the results tonight:

• Money Isn’t Everything – This race may finally put to rest that axiom of California politics about cash being king.  The No side – and mind you, groups only raised money opposing for certain ballot measures – raised about $4.5 million dollars, all told.  The Yes side raised over $26 million.  Despite this 6.5:1 advantage, most polls show the first five measures on the ballot, the ones that actually affect the budget, going down to defeat.  Prop. 1C, which had NO money against it and the state Democratic Party along with millions from G Tech (the makers of lottery machines) behind it, has consistently polled the worst among all measures.  The No on 1A folks used a strategy that conserved dollars but did get out the message, in particular through Web and Google ads.  But they were obliterated on the air and through mailers, and based on the fact that Arnold Schwarzenegger skipped town and Budget Reform Now doesn’t even have a headquarters tonight, it appeared not to matter.

• No Credible Messengers – The main reason these ballot measures are poised to fail is that, in general terms, absolutely no politician in this state has the trust of the people.  Nobody could sell the message on the Yes side because nobody could even sell themselves.  I’ve heard about internal polls with the legislature in single digits and the Governor below 30%.  We have a crisis of confidence in California, and that stands to reason, considering the extent to which process has overwhelmed personality, making the state largely ungovernable without major revisions to that process.

• Take The Message You Want – The Yacht Party will certainly try to paint this as a victory for their anti-tax jihad, and it’s highly likely that the dwindling state political media, and even possibly the Democratic leadership, will believe them.  However, regardless of conservatives being “emboldened,” the fact is that progressives opposed the special election for very specific reasons, and Democratic leaders must reconcile with that as well.  The constraints on governance here in California are undeniable.  And yet the time has come to stop finding ways around the mountain of structural problems and pick up the shovel and start digging through the mountain.  It won’t take overnight, and in the meantime there are solutions – some painful, some creative – that the leadership will have to take.  But the message from the electorate, including those that sat this race out in anger or frustration, is that people don’t want gimmicks and spending caps and service cuts.  They want a functioning government and they don’t see one, and they will continue to punish these people who call themselves leaders until they start acting like it.

• Musical Chairs – Curren Price will win election to SD-26 today, shrinking the need for Republican votes to reach the 2/3 threshold in the Senate to 2.  At the same time, this will increase the need for Republican votes to reach the 2/3 threshold in the Assembly to 4.  There are more targeted seats in the Assembly, so in the short term this is a slight net win.  But it’s obviously not optimal, and that Assembly seat may not get filled, if the SD-26 odyssey is any guide, until late fall.

Jackfolsum alludes to it, but I wanted to highlight it as well.  Arnold got tripped up a little bit today in front of the Jesusita Fire, caught in between telling Californians what they wanted to hear, or telling them they’re all going to die.  It’s pretty amusing:

One of Schwarzenegger’s strengths has been to respond to emergencies and assure local residents he will provide all support necessary. But that message clashes with his statements earlier this week that fire services would be jeopardized if voters reject the ballot measures on May 19.

Because he declared a state of emergency for the Santa Barbara fire, he said he was able to get the federal government to pay for 75 percent of the costs.

“This is very helpful for us because as you know, we have a financial crisis in California,” Schwarzenegger said. “But I wanted to make sure you all know, even though we have this crisis, we will not be short of money when it comes to fighting these fires.”

Oops!  But Arnold’s “strong leader/warrior/protector” shtick clashes with his “vote for my spending cap or you will BURN BURN BURN!!!” shtick.  So he backpedaled.

“First of all, let me just make it clear, because there’s always the question that comes up, what happens to the fire departments and to the budget if those initiatives don’t pass,” Schwarzenegger said. “The first thing you should know is, I will always fight and get every dollar I can for public safety, that is the important thing you should know.”

“No. 2, it is very clear that when the initiatives fail there will be $6 billion less that will be available, so therefore there will have to be additional cuts made, if it is in law enforcement, fire, education,” he added. “…But I will fight for every dollar, and will always make sure we have enough manpower and enough engines and helicopters ready to fight those fires.”

Interesting use of “when the initiatives fail,” not “if” there.  Arnold reads the polls, I guess.

He really has no idea what he’s doing.  He wants to scare and please at the same time, so it comes out like mush.

Come to think of it, Arnold sounds a lot like the Californians seduced by the Two Santa Claus Theory, who want to cut services in general but protect services in particular.  So maybe he’s just giving the people what they want.