Arnold thinks he’s a really hot businessman. But if that’s the case, why is the state thinking about selling the Supreme Court building in a sale that will result in a $1.5 billion net loss?

Democratic and Republican lawmakers on Wednesday sharply criticized Gov. Arnold Schwarzenegger’s cash-raising plan to sell off and then lease back 11 state properties, including the Supreme Court building in San Francisco’s Civic Center.

At an Assembly hearing held one day after an independent analysis showed the sales would end up costing the state $1.5 billion over the next few decades, lawmakers slammed the deal as a shortsighted budgeting gimmick that will end up hurting taxpayers. The committee voted to pursue legislation that would either ban such sales or at least require legislative approval.(SF Chronicle)

Like his misguided furlough policy, Arnold seems to be set on inventing new and ridiculous ways to kick the can down the road. Rather than confronting the structural budget deficit by putting his weight behind an effort to raise new revenues, he is dead set on pursuing strategies that focus only on the short term.

The short-term thinking of the Bubble era tax cuts are what got us into this mess. Can we try thinking of beyond the 8 year horizon for once?

Well, this is a smack to the back of the head for Arnold and his short-sighted “furlough them all” policy:

An Alameda County judge has ordered furloughed state employees in nearly 70 departments to return to a regular work schedule next month, but he spared the state from immediately paying hundreds of millions of dollars in back pay while Gov. Arnold Schwarzenegger appeals the ruling.

Service Employees International Union Local 1000, the state’s largest civil service union, figures Roesch’s decision affects about 53,000 of its 95,000 members.

Judge Frank Roesch’s decision this morning underscored his Dec. 31 ruling that Schwarzenegger should not have furloughed workers in 69 “special fund” departments. Those departments get a significant portion of their budgets from sources outside the state’s general fund, which is the shrinking pot of money at the center of the government’s serial budget crises. The judge later ordered back pay for the furloughed workers. Schwarzenegger asked Roesch to postpone implementation of the ruling pending his appeal.

Ruling this morning, Roesch said furloughs should end now.(SacBee)

The way the budget generally works is that most of the big ticket items come from the general fund, K12 and higher ed, much of our debt service, most social programs, etc.  However, these special funds support a plethora of other programs where either voters (usually) or the Legislature has provided for a specific funding source. Most of these funds are doing ok. So ok that Arnold wants to raid those funds to cover for the general fund. Why not just have 3 headaches when you have one gaping axe wound from the head now, right?

Well, anyway, most of these funds are semi-sacrosanct. So, they aren’t so easily tapped, at least without a vote of the people. And that’s what much of this has to do with legally.  At the very least, it’s a slap on the nose.  

For the duration of the furlough craziness, I’ve had a particular definition of “Stupid.”  (Capitalized, that is.) Specifically, the furloughing of workers paid entirely by federal dollars that ends up losing the state money.

Here’s how it works in one example.  State worker A reviews disability claims. Worker A is a state employee, but his or her salary is paid by the federal government. Arnold, concerned as he is for simplicity over touchy issues like “facts” furloughs Worker A despite the fact that the state saves no money.  Further, the work that Worker A would have done would have pulled down federal dollars into the state, but instead they go unspent.  See…Stupid.

Now, Speaker Pelosi weighs in on all that Stupid:

While California must make tough choices as it works to close its budget deficit, furloughing workers whose salaries are fully-funded through the federal government results in the loss of millions of dollars for our state while harming our neediest citizens.

The Social Security Administration’s Inspector General has found that furloughs of Disability Determination Services workers would cost our state $30.6 million in lost federal funds while delaying $98.5 million per year in disability payments to disabled Californians. California is also dead last among all 50 states when it comes to paying unemployment insurance claims within 21 days, according to the Department of Labor.

The California Congressional Delegation and I met earlier this year with Governor Schwarzenegger and state legislative leaders to ensure that California will continue to receive the federal funds it needs. Enacting this bill, which passed the Legislature with large, bipartisan majorities, is one simple way to strengthen California. I hope the Governor will sign this bill and end all furloughs for workers funded by the federal government.

So, to summarize…state saves $0 Dollars. State loses $30.6 million.  How is this helping the state?  Now, the Legislature has approved a bill to end these furloughs.  Of course, if Arnold had just not pushed for them in the first place, we wouldn’t be in this position. Nonetheless, here we are. Arnold, sign the damn bill, and at least eliminate this one, small bit of Stupid.

In my long running series of anti-stupid posts, here is yet another remark on the stupid furloughs. You know, the ones that end up costing us more than we save. Yes, that kind of incredibly ridiculous stupid that can only come from the ideological black hole that seems to have taken up residence in the Horseshoe.

Furloughs of the state workers who carry out federally-funded benefit programs have delayed delivery of monthly checks to people with disabilities and impeded an already slow system for getting cash assistance to jobless Californians, according to a new report by the Senate Office of Oversight and Outcomes.

The oversight office found great frustration among federal officials, one of whom decried the furlough policy as a “ridiculous” impediment to benefits that can keep the most vulnerable Californians from homelessness.

The report analyzes the effect of furloughs on the unemployment insurance program and two Social Security Administration programs that serve people with long-term disabilities.

All three programs are paid for with federal dollars.  So cutting by 14 prercent  the pay of the state workers who administer them does nothing to help the state’s general fund or cash flow.  In fact, the report concludes, the three-day-per-month furloughs will cost California an estimated $18 million to $31 million in lost state worker salaries by July 2010, when furloughs are scheduled to end. (CapWeekly)

Of course, Arnold will come back with something like this: we can’t shield state workers from the hard economy. Yada, yada, yada. Yet, this isn’t about shielding anybody, it is about delivering services that Californians desperately need. And if these federally funded workers are furloughed, they can’t provide these services.

We save no money, none, zip, zilch, by having these furloughs, yet we reduce the capacity of our state government. Sounding pretty Shock doctrine-y there, isn’t it? Long story short, we have Arnold once again putting his ideology over the best interest of the state. Same ol’ story, I guess.

Last week, Arnold Schwarzenegger’s administration, cut the furloughs for CHP dispatchers.  Apparently, the furloughs were causing extended delays in responding to 911 calls throughout the state.  In response, Arnold and his staff looked at the situation and determined that the furloughs were hurting the state.

Yet, still, the Governor insists on maintaining the otherwise blanket theory of furloughs.  Why just yesterday, he wrote a letter to DiFi saying how important the furloughs were, despite the fact that the furloughs in question were for state workers paid by federal dollars.

So, why the inconsistency? Why is it acceptable to make changes in the furlough policy for 911 dispatchers based on safety and not for tax collectors whose furloughs end up costing the state money.  This isn’t policy making, it’s just plain Stupid^TM. (Photo from WSJ. Arnold found some dumbbells in a burned out house…so he had to pump up a little bit.)

The Legislative Leaders have now submitted a kindly request to the Governor to cut one of the furlough days. You can read Senator Steinberg’s letter in full in this diary, he is simply asking for some reasoned policy analysis and to consider how it is affecting the state. It is a wonkish letter to be sure, but it highlights opportunities for cost savings and ways that the state can improve services to Californians. Of course, he is still a politician, and can finish with a rhetorical flourish with the best of them:

Information we have gathered indicates that California will lose hundreds of millions of dollars in our general fund at the state tax agencies alone. The current furlough policy has become a “penny saved, a dollar lost” approach that can be corrected immediately.

*** *** ***

You recently re-examined the furlough policy as it applied to dispatchers employed by the California Highway Patrol, and exempted these employees from the furlough.  I applaud you for that action.  Now is the time to re-examine the policy more broadly. Please find attached information the Senate has gathered on the furloughs.

On the flip side, the Governor’s policy goal seems to be simply punitive.  

“Senator Steinberg and Governor Schwarzenegger have a fundamental difference when it comes to furloughing state workers,” said Schwarzenegger spokesman Aaron McLear. “The governor believes they should cut back like all California families and businesses. Senator Steinberg believes state workers should be shielded from the economic realities the rest of the state faces.” (LA Times 9/3/09)

A few things here, first the role of government isn’t to punish its workers for the sake of punishing workers.  If we aren’t saving money with these furloughs, then why are we doing them? Why are we furloughing tax collectors, federally funded employees, and prison guards, when the furloughs will end up costing us more money in the long-run? This isn’t about shielding state workers, it is about providing services that Californians pay for. State workers don’t need to be taught a lesson that will cost the state millions of dollars to impose.

I would also point out that being a state worker is a trade-off. You take generally lower pay than you would in the private sector, but you get benefits and supposed job security.  Demonizing state workers will make it increasingly difficult to recruit quality state workers as we hopefully move beyond this crisis.

And beyond the fact that it causes inconvenience for Californians, it doesn’t really address the underlying problems with the budget: more money going out than coming in. We need a more flexible revenue and budgeting system to allow the state to respond to its needs.  But if we are going to furlough state workers, can we at least be sure that we are saving money in the process? Anything less would be, well, Stupid.^TM