"The most consistent and smartest thinking and writing about progressive politics isn't happening in Sacramento, but being churned out day after day on sites and by organizations like Calitics, Orange County Progressive, and the California Budget Project." - CalBuzz
I must say it's been interesting seeing "what happens in Vegas" in the last month. However, I don't really get this.
Are California's lawmakers pigs?
A new video campaign designed to draw businesses unhappy with California to relocate to Southern Nevada portrays lawmakers as morphing into pigs.
It is being launched by Nevada Development Authority, which has tried other ad campaigns in the past with the same goal, but not featuring the actions of the California Legislature.
The NDA says it's sure many California businesses are considering relocation due to the state's current troubles.
The campaign stresses that business owners pay no corporate or personal income tax in Nevada and have much lower workers' compensation rates.
It's just too bad that we can't expect more stimulus to help us soften the blow. Thanks to Arnold's "stimulus killer" budget, most of the economic benefits from the federal stimulus that are helping the rest of the country bottom out and turn around will be offset by the draconian state budget cuts. So once again, California will be losing out at the very least... Or may even hurt recovery efforts for the rest of the nation.
An opinion from the legislative counsel minced no words in outlining the reasons why the Governor's curious attempts to veto spending cuts cross clear Constitutional lines.
It's fun reading well-written legal opinion. I liked it when the Governor's actions were characterized as "wholly ineffectual and void". Kind of describes his entire term as Worst Governor Ever.
Is anyone keeping score of the number of times that the Governor and his advisers have been over-ruled by the courts. Seems to happen a lot.
The poorest and weakest Californians continue to pay for the Governator's lies, reckless tax cuts and irresponsible borrowing. If you're homeless, disabled, or poor, you get a punch in the face. If you're a predatory lender or multinational international, you get multi-billion dollar tax cuts.
One more part of Arnold's savagery became apparent as he vetoed the Department of Public Health's Domestic Violence Program, which provided $20.4 million for 94 domestic violence shelters and centers.
Last fall, when Chris Norby went to bat for funding the Women's Transitional Living Center, Yvette Cabrera at the Register wrote a great article that talked about the funding dilemmas for one shelter;
We haven't had a break," said Watson. "And, as the economy continues to worsen, we're going to see a lot more of these cases and a lot of women and kids walking through our doors."
So far, the nonprofit hasn't turned anybody away. But the increase in need comes at a time when the center is struggling financially.
The nonprofit lost nearly $400,000 this year when it took a 10 percent cut in state funding and didn't get a federal grant and several foundation grants. That led to layoffs of 17 staff positions, including case managers and child advocates, among others
In February, we highlighted the Orange County's Fair Board and their plans to bulldoze the Equestrian Center. In Out With the Horses, we quoted Fair CEO Beazley as looking for the "highest and best use" for a coveted 7.5 acres of the property. While the trainers and horse owners had a long history at the Fair Grounds, and offered a unique oasis in an urbanized area, they just didn't generate enough revenue.
Instead the Fair Board had a vision of more flat, flexible space, another expanse of asphalt that could serve as parking, as a place for carnies and vendors to park their RV's, as additional space for larger and more events. But fundamentally, they were looking for more revenue.
The Fair Board gave lip service to the organized equestrians and their supporters in the community as they proceeded with their plans. "Develop your own plan as part of the EIR process,", they told the horse set. "We'll look at that too. Think of it as an opportunity." The Costa Mesa City Council passed a resolution in support of keeping the Equestrian Center, as did the County Board of Supervisors. But there was little doubt that the Fair Board would ultimately make a decision based on some greater good that they imagined, a hot, crowded, revenue-generating economic engine with the stench of deep-fried junk food.
Fast forward to today's news. The battle to crush the equestrian center is forgotten. Instead the entire fairgrounds is in the crosshairs as the Republican Party plans to piratize public assets so they can afford multi-billion dollar tax cuts for the largest corporations and defend their friends in Big Oil and Big Tobacco from taxes. But the Fair Board is receiving the same saccharine words that they recently gave the horsey crowd, and being encouraged by local Republican legislators to come up with a plan to buy the Fairgrounds using a non-profit organization. The Costa Mesa City Council passed a resolution in support of keeping the Orange County Fair, as did the County Board of Supervisors. Assemblyman Tran is promising to introduce legislation to rescind the sale if any use other than a county fair is considered.
The problem for the Fair Board is the exact problem that the equestrians encountered. A fair isn't the "highest and best use" for a piece of urban property, and Governor Schwarzenegger has only crocodile tears for any community interest, whether it's state parks, home health care workers for disabled elders, or a county fair. The local Republican legislators, after their scorched earth tactics on the budget, have no friends in the majority party who would give them anything except a snort of derision as they plead the public interest.
Fair Board members, reliable Republicans appointed by the Governator, can't bring themselves to criticize the folks who brought them this crisis.
Maybe they should start recalling the day when Arnold entertained a recall rally at the Fairgrounds, promising to eliminate the car tax, and pay for this reckless tax cut by eliminating waste and fraud. Fairgoers got their car tax cut. Now they'll pay for it.
What's truly perverse is that the proposed non-profit, under the leadership of Republican honcho Dick Ackerman, is probably already figuring how to complete the symmetry by selling off pieces of the fairground for high intensity development so they can keep the Fair just as it is. They've already decided that the equestrian center is expendable to their greater good, just as they've envisioned moving the agricultural elements to some other site.
Does anybody think that the 7.5 acre equestrian center won't be the first parcel on the auction block? Or do you think that the Fair Board members won't tout the equestrian center as one of the unique features that justifies saving the property as a county fairgrounds, or attempt to enlist the equestrians to lobby the Governor?
A lot of newspapers haven't picked up that local governments don't really take a hit for the borrowing by the state.
When the state decided to borrow 1.935 billion from local governments, the local governments were pretty damn skeptical that the state would have the money to pay them back in four years. So the legislature passed a bill, ABX415, that authorized bonds with the state's highest rating, and agreed to pay the fees and interest to issue the bonds so the cities and counties wouldn't have to try to borrow the money individually.
I was sure I misheard the terms when Noreen Evans was introducing the bill to securitize the borrowing from local government. It just couldn't be possible that the state was authorizing 340 million in issuance fees on 1.935 billion in four year bonds and authorizing up to 8% in interest.
That would be almost a billion dollars in interest to borrow 1.9 billion for four years. That's just batshit crazy.
Holy Shit. I heard right, and I calculated it right. Here's language and analysis from the bill, which was never released or publicized before the vote.
Moreover, the state will pay all of the costs of the securitization, including payment of an interest rate of up to 8% for an issuance amount of up to $2.25 billion (the principal amount cap includes the potential cost of credit enhancements and bond issuance in addition to the $1.935 billion suspension amount) ....
1)GF savings of $1.935 billion in 2009-10 due to the use of local property tax revenues to pay or reimburse state GF costs.
2)GF cost of up to $2.9 billion in 2012-13 to pay off securitization bonds and to repay directly any local agencies that did not participate in the securitization. The actual cost may be less ...
1)If the securitization requires the maximum 8% interest rate and the maximum amount for credit enhancement fees, then the equivalent annual interest rate that the state would pay on the Proposition 1A receivables bonds would be around 16%.
Meanwhile the state cut taxes for multi-national corporations by 2 billion a year and refused to consider the same type of taxes on Big Oil and Big Tobacco that other states have.
WORST GOVERNOR EVER
In a budget filled with chicanery, the sale of the Orange County Fairground isn't one of the biggest frauds perpetrated by Arnold and the state Republicans. Arnold's illegal vetoes, the sale of part of the State Compensation Fund, the illegal diversion of redevelopment money, and the projected savings from reforms are all big lies that scale in the hundreds of millions.
So the estimate that the Orange County Fairgrounds will net the state somewhere between 96 million and 180 million hasn't received much attention.
And it certainly wasn't ever exposed to the light of day during hearings or debate that might have given any opportunity for dissenting opinions.
But from what we can gather, there are conflicting stories coming from the Governor's office, the Department of General Services, and local Republican legislators that indicate that this is one more big lie.
The California budget agreement has finally been signed and it is as bad as predicted-massive cuts to schools, higher education, social services, and local governments. The result will be millions of children without health care, an education system in accelerated collapse, disabled people kicked to the curb, and municipalities in bankruptcy. In short, every vulnerable person gets shafted.
All of this pain was made necessary because Governor Schwarzenegger and a small minority of Republican legislators have refused to modestly increase taxes to cover essential state services. (Here is an account of proposed tax increases that would have avoided some of the cuts had they been enacted.)
The California economy will be hamstrung for years because of these shortsighted decisions. But economies can bounce back. The greater calamity may be moral decay and the collapse of the social trust on which society depends.
Progressives must develop a strategy to fix the state, but the first step is to get clear on what we are up against-and it is not a pretty sight. Moral catastrophes never are.
As has been well-documented, some of our budget woes stem from structural problems in the way government is managed. Proposition 13, the 2/3's rule on budget matters, the power of lobbyists in Sacramento, a dysfunctional prison system, and government by ballot box have all contributed to the debacle.
But it is important to remember that these structural impediments to good government and the unconscionable cuts in the current budget represent decisions made by people-the politicians who promoted these policies and the voters who gave them their support. California's budget debacle is not a force of nature or an accident. Some Californians, in and out of government, decided the health and welfare of millions of people could simply be ignored in order to avoid modest tax increases. That is a decision for which they must be held fully responsible.
I have known many Republicans and conservatives over the years. And they don't seem to be personally less compassionate or responsible than the rest of the population. In their personal lives, they seem to have the same moral emotions and moral focus the rest of us have.
But when it comes to public policy, all that compassion and responsibility dries up like a San Diego stream bed in August.
Hence the question the title poses. What kind of person denies essential services to millions to save a few dollars?
Of course the answer to that question is that they are in the grip of an ideology that makes them moral cripples.
It is worth unpacking this ideology.
Conservatives think that people are fully responsible for their lot in life. If you are successful it is because you deserve it and if you are not successful it is because you don't. Thus, the vastly unequal distribution of goods in our society already reflects the morally optimal distribution. Any marginal increase in goods should go to the wealthy and marginal decreases in wealth are burdens that must be borne by the poor, the middle class, or the disabled. This is the only logic that could justify this budget.
These are strange beliefs to hold, especially with regard to children who presumably don't deserve their lot in life. Furthermore, it doesn't take much thought to realize that luck plays a large role in determining how well people do, and that it is impossible to make sound inferences about perfect strangers when explaining why someone is successful or unsuccessful. But if they are so unreasonable, why do these conservative ideas persist?
I suppose you could derive these "moral beliefs" from the basic principles of free-market fundamentalism. According to conservatives, an unregulated, minimally taxed market tends toward equilibrium and will thus settle on a distribution of products and prices that is beneficial to everyone. By adding the above premises about what people deserve, conservatives enjoy a double dollop of self-esteem--the "screw the poor" policy is both "just" to individuals and best for society overall.
In addition, conservatives cling to the idea that raising taxes even a bit will plunge the economy back into recession. There is ample empirical evidence refuting this idea, and the theory of free-market fundamentalism has now been thoroughly discredited. Yet the ideas persist, immune to counter-example, within a sizable portion of the public.
But the important point here is that none of these judgments about economics or what people deserve explains why people would weigh such questionable premises more heavily than moral compunctions about the suffering of millions of disadvantaged people. In other words, even if recession economics requires low taxes, and poor and middle class people are less ambitious than the wealthy, it doesn't follow that we should simply ignore the destructive social consequences of these budget cuts. What sort of value system allows you to discount human suffering in favor of some "theory" about economics or human nature?
In fact, most politicians and their supporters are not economists and are unlikely to hold firm beliefs about market equilibria or recession economics.
Thus, I suspect that underlying these beliefs about what people deserve is the (unconscious) belief that the unsuccessful are not only undeserving but evil-a kind of fifth column threatening the fabric of society with their indolence and incompetence. Social welfare only encourages their indolence, and public education is the Trojan horse that will give them access to positions in society. Thus, draconian budget cuts are good things-they cleanse the social body of vermin that threaten its health.
To believe such a thing is to be in the grip of a delusion so pervasive that it can be sustained only by unconscious motivations-deep resentments, pathological narcissism, an authoritarian need to control others through scapegoating, etc .
It is not nice to contemplate fellow Californians with such motives, but I am at a loss to find an alternative explanation for what the Governor and legislature have done.
Conservatism came to power in part based on promises to lower taxes while providing essential services through free market innovation. But its ability to capture the imagination of voters also depended on the perception that conservatism was a morally superior ideology. The values rhetoric for which conservatism is well-known provided moral cover for the questionable economic theories they advanced.
With this budget, the emptiness of that values rhetoric has once again been exposed just as their economic theories are in tatters. What is left is not merely naked self-interest but a self-interest bolstered by deep resentment, bigotry, and pathological indifference.
It is not obvious how that moral cancer can be put into remission though our future depends on it.
We all now know that Arnold topped off the "budget of misery" with even more misery, cuts that may not even be legal. These cuts will literally kill thousands of HIV-positive Californians. These cuts will throw thousands of working families off their health care programs, and may ultimately kill a number of them. Don't be fooled, these cuts are lethal and we're only starting to feel the pain.
However, a few good progressives haven't given up yet. Courage Campaign is responding by calling on the Legislature to return to Sacramento ASAP to vote to override Arnold's additional line-item veto cuts. Included after the flip is the full letter from Courage Public Policy Director (and friend of OC Progressive) Robert Cruickshank.
When the Governor signed ABx4 1-the bill that revised the 2009-10 Budget Act-and accompanying trailer bills this morning, he line-item vetoed about $500 million in General Fund expenditures in order to ensure that the state has a reserve for 2009-10.
There's a pretty good case to be made that these cuts, especially those of health and human services programs are outside the Governor's Constitutional authority.
First, reductions to amounts in the various budget schedules do not actually constitute appropriations and, thus, are not subject to line item veto. This argument is bolstered by the long-held view that, unlike new or increased items of appropriation, the Legislature may reduce General Fund items of appropriation with a simple majority vote, and any General Fund action that takes place with a simple majority vote is not, by definition, an appropriation, and therefore not subject to line-item veto.
Second, most of the budget revisions for the health and human services departments were not even included in the scheduled items, but instead were placed in Sections of 568 to 575 of ABx4 1. These sections of the bill added new Control Sections 17.50 to 18.50 to the 2009-10 Budget Act that reduced the various appropriations for HHS departments in a descriptive manner, thus making it even clearer that they do not constitute appropriations. These control sections include departments that were specifically included in the Governor's line-item vetoes-Aging, Health Care Services, Public Health, MRMIB, Mental Health, Developmental Services, and Social Services.
Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit. Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women's shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.
Arnold's certainly been contemptuous of the law, losing time and again in court on redevelopment takeaways, pay cuts for health care workers, cuts in reimbursement for Medicare, and of course, having the federal government take over part of the state prison system.
So this may be one more gimmick that will fail in court, more shenanigans to defend the Governator's friends in Big Oil, Big Tobacco, and multi-national corporations from paying their fair share of the cost of California government.
The Worst Governer Ever used his line item veto to go further slash parks, and cut into AIDS programs, with deep cuts to children's welfare and health care. Defending big oil and big tobacco against tax increases, and passing through massive tax cuts to multi-national corporations have proven far more important to Mr. Schwarzenegger than the lives of his most vulnerable constituents.
"We question whether the majority of these vetoes are legal."
-Sen Pro Tem Steinberg responds in a statement, says Democrats will fight HHS vetoes.
• An additional $6.2 million cut from state parks, which will likely cause as many as 50 more parks to be closed (potentially 1/3 of parks - 100 total - will now have to close)
• Elimination of state funding for community health clinic programs.
• $80 million cut to child welfare services
• Total of about $400 million in health care cuts, including further Healthy Families cuts
• Elimination of funding for the Williamson Act programs to preserve farmland from development
Watching the latest budget drama in California should be a wake up call to understand that our broken health care system is the largest single problem for California's fiscal health. Without substantive health care reform, California faces fiscal collapse. And reform must extend far beyond the funding mechanisms, but must also look very strongly at how we control costs, and how we deliver health care in far more efficient ways.
In California, the latest budget battles included a proposal to eliminate SCHIP in California and scale back Medicaid in several areas. Part of this battle has been cynical right wing politics, with attacks on Medicaid-funded In-Home health care workers who are represented by progressive unions. Schwarzenegger's barbaric proposals were not adopted, but the state did scale back SCHIP dramatically, with a budget that will deny coverage to hundreds of thousands of California children over the next two years. Medicaid recipients will lose some benefits, and a cynical attack on the home-health care workers and patients to reduce non-existent fraud is designed to reduce spending in this area.
Art Pulaski of the California Labor Federation nails it in his comments released on the California Budget.
"The state budget package passed today is the shame of California. The deep, unnecessary cuts included in this budget will turn the current economic storm battering families into a Category Five hurricane."With this budget, the Governor and Legislature failed miserably in their primary duty to protect California families. The most painful part of this budget deal is that the catastrophic cuts to education, health care, public safety, state workers and programs for children, seniors and the disabled could have been avoided.
"The refusal by the Governor and Republican leadership to even consider popular revenue sources like a tobacco tax or oil severance fee created the roadmap to the disastrous budget we're now saddled with. The accounting gimmicks the budget deal includes scuttle any hope of long-term fiscal stability.
This is not a budget of shared sacrifice; the hardship falls disproportionately on low- and middle-income families. "At every turn along the winding road that led to this budget, the Governor sided with wealthy special interests at the expense of working families. When given the choice to support a tobacco tax or eliminate children's health care, he sided with Big Tobacco.
When given the choice to lay off thousands of teachers, firefighters and police or tax Big Oil, he sided with Big Oil. When given the choice to close corporate tax loopholes or gut job-creating infrastructure projects, he sided with wealthy corporations.
"It's never been clearer that our system needs reform. We need to eliminate the ludicrous two-thirds majority rule that allows a small minority of ideologues to hold the state budget hostage to their narrow demands. We need to fix the state's outdated tax system to ensure that the wealthy and corporations pay their fair share.
And we need new sources of revenue to ensure important programs in education, health care and other areas are adequately funded.
"Finally, we need leaders with a real vision to bolster California's middle class and the political backbone to get the job done.
California's working families won't soon forget
this debacle and the unnecessary pain it's caused. Today we commit anew to electing real leaders in California who will put families first and holding legislators on both sides of the aisle accountable for the actions they take."
The Assembly didn't go along with the Senate on everything.
As far as local government goes, the illegal gas tax raid was defeated, so local government avoids a big hit.
The Prop 1A borrowing from local government passes at a huge cost to the state. It's fully securitized, with the state paying fees, insurance, and interest through a Joint Powers Agency. At eight per cent interest, with large upfront fees, this is expensive borrowing. But, local governments don't take a budget hit this year, which is the good news. And if the state doesn't have the revenue to repay these loans, it's the bondholders who suffer. The League of Cities remains skeptical until they see the bill as it was rewritten during the night.
The redevelopment agency raids pass, and this is a huge hit for many cities. This will go into court, where redevelopment agencies have beaten the state on similar schemes. And the idea of extending redevelopment and securitizing the revenue was nonsense that went away in the night.
For local coastal cities, the defeat of DeVore's bill to authorize additional offshore drilling avoids a dangerous precedent.
The package, without 100 million from the offshore drilling, and the missing gas tax money, is already over a billion short of revenue, and the "reforms" like selling part of the state fund and piratizing claims are highly unlikely to be anything beyond costly failures.
The cuts are real. Some of the savings and reforms are laughable.
