A California Republican

I need to apologize to the readers of this blog for the lack of posts. There was a death in my family, and it took until today to get everything attended to and straightened out.

 Coming up later today: a discussion of the vetoes the Governor is threatening. Also, a discussion of the budget plan.

 Thanks for continuing to read this blog.

It is nothing new to hear that the Legislature has passed bills, attached to the budget, that have nothing to do with the budget. These bills are called trailer bills. Trailer bills are supposed to be limited to the legislation needed to implement the budget.

An example of a trailer bill would be if state law requires the local governments to get a certain amount of money, and the state budget reduces that amount of money. There would be trailer bill language (TBL) that implements the change in law so that the provisions of the budget, lowering the money to locals, can be carried out.

However, there are often other items in TBL. Sometimes the TBL can be simple, like instituting another furlough day, and sometimes it can be complex, like approving a contract for a union. In this budget deal there is language that would allow the South Coast Air Quality Management District to overturn a court case which says that no futher power plants can be built in the Los Angeles Basin until their environmental impact analyses are done more completely. The SCAQMD wants language in the trailer bills that would overturn the court ruling, and allow more power plants to be built in the Los Angeles basin. Interestingly, the language SCAQMD wants in the trailer bills is stalled in a piece of legislation, SB 696.

Here is another case of the budget not doing what it is supposed to do, and legislators not caring. In this particular isntance, trailer bills are being abused. The legislation isn’t part of the budget, its part of its own bill. Leave it out of the budget negotiations, and instead focus on the money, not the environmental groups.

There is still no budget. IOUs are being issued, and banks have stopped accepting them. The SEC has declared that California’s IOUs are tradeable, and there is a pretty large market for trading the IOUs for cash.

There was supposed to be meetings on Sunday, yesterday, about the budget. But there was a problem with the schedules of the Big Five (leaders of both parties from both houses and the Governor) and the meeting didn’t happen. Just out of curiosity - what were the events that interfered with budget negotiations? Fundraisers? It is not like this budget and the fiscal situations are the biggest problem currently in California. What else could these people have to be doing besides fixing the budget? Obviously they had something more important than doing their jobs, otherwise they would’ve been at the meetings.

It should come as no surprise that there is no budget yet. Once the deadline to prevent IOUs from being issued was blown, and since there hasn’t been a major public backlash against the Legislature and Governor, it was expected that they would take their time crafting a budget deal. The hope was that in crafting the deal there would be real reforms to help solve the problem. However, from the few details that have leaked, that is unlikely.

From the few details that have leaked it seems as if the budget deal will involve some cuts, and then some theft of money from local governments. It cannot be called borrowing, because there is no good plan to pay back the money. Instead, it is an outright theft. Education will have to take another $680 million hit - although that is nothing compared to the billions of dollars they get in funding.

Maybe the whole proposal will come out soon, but chances are it will be mid-week or later when the new budget deal comes out. Expect to see a lot of accounting gimicks and borrowing in the deal.

California school finance is a mess. Very few people in the state udnerstand the whole thing. This blog is simply meant as a primer, not a complete course. If you want to complete course you should be the Department of Finance’s education analyst. Otherwise, good luck. But here are the basics. It should help you understand why Prop. 98 is such a ridiculous thing, and why school funding seems so large, yet do little goes to the schools.

California’s K-12 schools get their money from a variety of state, locat and federal sources. The majority of a school district’s funds are for general purposes, they can do what they want with the funds. Some of the funds, the categoricals, must be spent on specific things.

State funding account for more than six out of every 10 dollars that schools receive, statewide. In some districts this is lower because they have more property tax revenue. In other districts, like L.A., this is higher. In fact, the L.A. school districts account for more than 50% of education funding in the state. Federal money accounts for approximately 9% of school funding. The state lottery funds approximately 1.6% of state education.

Almost all of the state funding comes from the General Fund. The California Department of Education receives the funds, and then provides those funds to the local school districts. On way to cut on spending would be to eliminate the California Department of Education, or at least severly reduce their staff and their work. Who knows better how a school needs to spend and use the money - the state or the locality where the school is located?

Proposition 98 guarantees a minimal level of funding for the K-12 schools and community colleges . Prop. 98, generally, says that K-14 education shall receive a greater percentage of state general fund revenues, or the amount they received the prior year, adjusted for inflation and enrollment. The language is confusing, as are the three formulas that Prop. 98 uses to fix the percentage of revenues the state gives the schools. The main point is that under no circumstances, unless Prop. 98 is suspended, can education receive less funding than it did the prior year.

Are you still confused? So is everyone else. School funding is a hard issue, and Prop. 98 only makes it harder. The California Budget Project puts out a great primer on school finance. It is only a few pages long, and you can read that.

But do you see how education funding is ridiculous? There is nothing that bases the funding on need, performance, or anything else that is a tangible output. If businesses operated a program in this manner it would fail. Why not reform education spending to match what everyone expects it to be - based on performance. Bad performing programs shouldn’t get more money. Teachers who cannot control classrooms or teach their students shouldn’t get tenure and raises because of their years of service. School funding is broke. It is time we fixed it.

The Governor is showing his true roots - he doesn’t like the workers he has to deal with. What other, possible, reason could there be for making state workers take another cut? The Governor’s newest budget proposal has state workers taking three furlough days (15% cut) plus another 5% cut. That means state workers are going to take a 20% pay cut.

These are the same state workers who help local businesses by eating out and spending money downtown where they work, or in whatever location they work. These are the same state workers who have mortgages and car payments that they have been making because state workers used to have a steady paycheck. These are the same state workers who don’t have any control over the amount of work they have to do - regardless of the furlough days. State workers have to get their work done. The added furlough days means more overtime pay, it is not simply a 20% pay cut, but it is a 20% pay cut in the base salary and then overtime.

A Republican legislative staffer has been quoted saying that the Democrats won’t go for the pay cut because the state workers “are their (the Democrats) constituents.” The staffer probably means that the state workers are in unions, which fund the Democrats - so in order to keep the funding the Democrats won’t cut the state worker pay.

Ok. So there won’t be a 5% pay cut. The Governor will just add a fourth furlough day.

How can he simply add furlough days? He declares a fiscal emergency. A state court has ruled that when the Governor declares a fiscal emergency he has broad executive power - which includes the right to furlough workers. The same state court found that the Governor could order furloughs to the civil service employees of constitutional officers (the Lt. Governor, Controller, and Secretary of State to name a few).  The state workers for teh cosntitutional officers still have not had to deal with furlough days becuase their bosses say they don’t want to furlough them.  This means the savings levels are even lower because of the lack of furloughs for workers at the constitutional officers offices.

In the meantime, everyone else is going to have to take another hit when the Governor orders a 4th furlough day. This is simply bullying. The Governor is pushing around those who are politically expedient. He’s not solving the budget problem. In fact, he’s creating another one because these are the same state workers who won’t spend money.

Maybe, instead of putting time and effort into determining savings from furloughs and fighting court battles, the Governor should put the energy into solving the mess that got him into this predicament - the budget hole.

The Governor’s plan to fund education puts the state at risk of losing federal stimulus dollars.

The Governor planned to “borrow” $2 billion from local governments, then use that money to fund education. This would free up $2 billion General Fund at a time when the state faces a $26.3 billion General Fund shortage.

Such a move isn’t uncommon in California budget politics. There is often “borrowing” from funds to release General Fund so the General Fund can fund other programs and the state won’t have a shortfall. The problem is that this move would mean that the state falls below the minimum funding guarantee that the federal government has required. The federal government has put certain minimum funding requirements on the states who are receiving federal stimulus money so that the states use the money to stimulate the economy, and don’t use the money to fix their budget shortfalls.

California has received almost half of the $10 billion it was expecting for education, health and prison services. It is unclear if California would have to pay back the money it has already received, or if the state would simply be barred from receiving more funds. If California had to pay back the money it has already received, the budget shortfall would be over $30 billion. That’s a fairly large gap to close.

Democrats are saying that the borrowing plan the Governor has shows how he is confused between reality and what he wants. Republicans are not saying much of anything, but they are encouraging the Governor to not lose federal stimulus money.

The Democrats, Republicans and the Governor are back at the bargaining table, still trying to figure out what to do. Insiders say they are waiting for the report from the experts on education spending, and what can be done to lower the limit. In this case, Prop. 98 and the federal minimum funding levels are complicating matters of reaching an understanding about the minimum level of education funding neccessary to maintain federal stimulus dollars.

The state of California is still without a budget deal.

Assembly Speaker Karen Bass walked out of budget negotiations yesterday. She, and Sen. Steinberg (the leader in the Senate) are opposed to the Governor’s demands that any solution include a way to reduce spending long term. Instead, they stimply want to solve this crisis, and leave next year’s problems until next year. This is simply not a responsible approach. Pushing the problem until next year won’t make it any easier to solve.

One of the (many) reasons the state is in a budget crisis is because the legislators do not take a long term approach when looking at the state budget. In good years they spend more. In bad years they use accounting gimicks so that they can still spend more. The legislators don’t curb the spending. In addition to the budget, they spend money in bills. Legislators, of both parties, treat money like it grows on trees.

The Democratic leadrs are saying they won’t suspend Prop. 98. Instead, they want to fund the missing portion of the budget through tax increases - or fees as they call them.Ignoring Prop. 98 isn’t a good thing. Prop. 98 eats up almost 50% of the budget. It provides a funding guarantee to K-12 schools, and each year the funding guarantee grows under the formula. This proposition was a California Teacher’s Association (CTA) brain-child, and now the CTA, one of the most powerful unions in the state, doesn’t want it touched. Therefore, the Democrats won’t touch it because CTA told them not to.

So what can be done? Spending can be decreased. This  is a simple solution. The thing families do when their income doesn’t match the spending is to decrease spending. In the state there are many laws and constitutional provisions that require certain levels of spending. The Legislature can remove them, or suspend them, and they should. Spending needs to be decreased. When the income level of the state is what it was in the early 1990’s, the spending needs to be at the same level. Instead of holding to ideological positions the legislators need to get to work.

Until they find a solution, the state is issuing IOUs to various people as payment. The largest banks in California have decided that they will not accept IOUs as payment after Friday. There is a hope that the bank’s rejection of IOUs will force the state to solve the budget crisis.

Nothing is going to move the legislators, and the Governor, until something happens to them personally.

Here’s a suggestion: Veto the budget for the Senate and the Assembly to the lowest level possible - the level that simple provides salary to the Senators and Assemblymembers. According to the Department of Finance budget documents, the total expenditures for the Senate and Assembly are $244,057,000 in 2009-10. The amount of money that goes to the salary of the Senators is $6,363,000; the salaries for the Assemblymembers is $11,038. Therefore, the Governor should cut the Legislature’s budget to $17,104,000. That would save $226,953,000. If the Governor is willing to make the state workers go on a furlough to save $500,000,000 then he should be willing to cut the Legislature’s budget to save $226,953,000. It is not like the legislators are hard at work to earn their salaries. They are not coming up with new ideas. And their staffs are not helping the situation at all, so why should they have money for a staff?

It’s just one idea. Maybe one that would get the Legislature to “reconsider” their positions on cuts and spending levels. It would certainly make it personal to them, somthing that needs to happen so they will move and compromise.

Happy Independence Day!

Today is Juily 4, 2009; the day we celebrate the independence and establishment of the United States of America.

What are you doing to celebrate this occassion? Many people are gathering with friends and family to BBQ. Some are going camping, on trips. Most will be watching fireworks this evening.

While those are all great things to do, what are you doing to celebrate the meaning of the day? My mother used to read the Constitution to us, and the Declaration of Independence. It doesn’t take that long, but it brings those documents to the front of your mind; the documents that established this nation, and helped form the political landscape.

Some people attend memorial services for those who have died in service to this country. Family members might go to grave sites. There is a family in our neighborhood who writes short letters to soldiers to say thanks for serving, and then puts them in the mail box. That’s going to make a huge difference to a soldier who is far away from home, and who might not get any mail.

Fireworks, fun and friends are all good things to do. But also include something about the spirit of the day. Don’t simply think its a fun day to have off that we get to have hamburgers and pasta salad. Make sure to include something about the meaning of independence, of the United States of America. The USA is more than simply documents or a geographic region. It is an idea, an ideal, that is embodied in the documents of its founding.

So share the idea, read the documents. Celebrate the spirit, and the fun, of the day.

In a kingdom far, far away……wait, it was here in the U.S.A that this happened. Some people decided they didn’t like being taxed by the king in England without having representatives who spoke for them, and their interests, in the court. The rally “no taxation without representation” became the battle cry of a revolutionary war that led to the creation of the United States of America.

The people, then, fought and died to make sure they had freedom. They debated over the proper form of the federal government and decided on federalism - a limited federal government with most of the powers being at the state level. The Articles of Confederation were drafted, and abandoned in favor of the Constitution - the current governing document for the U.S.A.

California joined the union and made up its own Constitution. Today, initiatives can amend the California Constitution. People who don’t care enough to write a letter about their feelings on political issues get to cast a vote to amend the California Constitution. People who don’t care enough to show up to the polls in a special election got to decide issues of constitutional importance the previous fall.

And today there are representatives sitting in the Legislature who don’t seem to represent anyone but the extremes of their parties. Who is represented in the Legislature? What actions do the legislators take to make anyone think they are representative of the people? Instead of solving a fiscal crisis, they develop accounting strategies and other tricks to push the problem into off-years, when “hopefully” the income levels will rise and then there won’t be a fiscal crisis.

The legislators who spend time on bills about cow and space for elephants in cages…but not on how to deal with the failing education system, failing transportation system and failing water storage and delivery system.

Who are these people? Who are they representing?

The rally of “no taxation without representation” can be aptly applied to today’s situaiton with the California State Legislature. They don’t represent who they are supposed to, and instead of dealing with the situation they want to tax the people of California too much.

No taxation, California State Legislature, until you being to really represent those who elected you.

Is anyone surprised? The Legislature didn’t pass a budget solution last night, and now the state is going to issue IOUs, the Governor is going to declare another fiscal emergency, the Legislature will enter another special session, and state workers have to take a third furlough day, another pay cut.

In an irresponsible move, the Senate met last night and didn’t pass the budget package the Assembly had already passed. It failed along party lines. Republicans, and Democrats are being irresponsible. They aren’t solving the problem. There was a short term solution to give people enough breathing room to consider real solutions, rather than stop-gap measures that will put the pressure on next year, but they didn’t take it. The Governor is part of the problem, saying he will only sign a full package, not something dealing only with the $3.3 billion shortfall right now - he wants a full solution for the $24.3 billion before he signs anything.

Everyone is acting like children. If they don’t get their way, they don’t want anyone else to get their way either. These people were elected by Californians, who want this problem solved.

State workers - if you don’t like what is happeneing to you, flood your Senate representative and your Assembly representative with letters, emails and phone calls. This is the only way that they can represent you - if they know what you think. Marches and protests make nice pictures for papers, but until the representatives know how many of their constituents are affected, the pictures is all the marches and protests are worth.

Deadlines, legislators don’t believe in no stinkin’ deadlines.

Deadbeats

“What an irresponsible position to take when our problems are already as severe as they are,” Steinberg said in asking his colleagues to support the stopgap bills. “Don’t be a party to that.” Steinberg is a particular type of deadbeat - the one who believes everything has to go his way or else everyone else is wrong, and the deck is stacked against him. He doesn’t want to move his negotiating position. He wants everything he wants, and anyone who doesn’t agree isn’t working on the problem, they are simply blocking him from success.

News to Sen. Steinberg - negotiation is about give and take. The best negotiators go in knowing what they have to give away, and knowing that they have to give something away. Steinberg doesn’t want to give anything away. School funding, welfare and health services all have to stay at the same level they are. But that simply cannot happen. When revenue levels are the same as they were in the 1990’s, service levels have to be the same level as well.

Steinberk and Speaker Bass both say that to cut the social safety net is too risky in this time. They say the safety net has to be there because of the hard economic times Californians are going through. It isn’t the state’s responsibility to assume these duties. The state did assume them, and the Democrats became big players when the state became the safety net. But this isn’t the state’s responsibility. For those in the direst need, there are federal programs to help out. Families and churches help. Non-profits help. The state is supposed to govern. The state cannot govern effectively if they are also playing the role of the family, church and non-profit. Go back to doing what they can , govern, and let the rest of society do what they are supposed to do.

Dead otters

There is news that California otters are dying in drastic numbers in the ocean because of man-made waste and ocean pollution. Luckily, this might become the federal government’s problem. The feds have sent a letter saying that there are some state parks they will take over if the state decides to close them. Among those parks are Angel Island and some coastline in Monterey.

The feds say that the state is violating provisions of federal law if they close off all state parks. Some of the state parks are land grants by the federal government. Attached to those grants is a provision that says the parks have to stay open to the public in perpetuity - forever. If the state violates this provision, the federal government can come take the land back. The state would also be barred from receiving any more funding from the Federal Lands Commission, which provides funding to parks for new trails, bathrooms and visitor centers.

Dead otters are going to be the federal government’s problem when they start washing up on federal land.