Are any of you following Jerry Brown’s plans to deal with the California budget crisis? It’s pretty easy to see where the current plan is headed:
“The governor kind of took the baby and split it in half. He has $12.5 billion in cuts and $12.5 billion in revenue increases,” said state Assemblyman Jim Beall, the Democratic chair of the Committee on Human Services, which oversees the social programs that will take the biggest hit.
Brown has held frequent meetings with legislators of both sides. And he has so far been able to sell Democrats on the massive cuts by laying out the scary scenario of what happens if his budget doesn’t pass, the assemblyman said.
[…..]And making it all even more complicated, Democrats have to agree to the cuts on faith that voters will extend the tax increases enacted in 2009 and set to expire. Brown promised any new taxes would be put to voters, and the earliest an initiative could be placed on the ballot is July. So Democrats and labor will have to take the initial hit in hopes that voters agree to raises taxes, even as Republicans likely campaign against them.
[…..]“The best part about California today is that the Democrats own it,” said Linda Ackerman, a Republican National Committeewoman from California.
The Democrats do the spending cuts, then Republicans campaign against the tax hikes, muck things up as much as possible, blame the Democrats and make some political hay. Who knows, maybe we’ll see another recall of the governor?
There is no way Republicans can control California anytime soon, because they’ve alienated Latinos too much (they may win the odd gubernatorial election, but the demographics of the State Legislature are brutal for them). How much damage will they be able to do as a minority party? And how much will principled, serious conservative pundits cheer their campaign of destruction?
MikeJ
I tired to warn them an about Arnie and Daddy J[1]
But I can’t seem to get to them through the US mail
[1] Howard Jarvis of prop 13.
BGinCHI
Maybe time to sell, or lease, CA back to Spain.
Warren Terra
Keep in mind, the famous California Proposition 13 (celebrated by one Jerry Brown, I’m sorry to say) did two things: (1) it fixed property valuations to their value in 1973, only changing when they were sold, for the purpose of property taxes (including commercial property, which by its nature need never change title even when sold – the entity owning it can be sold if necessary instead; and then there’s the property that never changes hands, like, say, Disneyland); and (2) it imposed a two-thirds requirement in the Legislature for any tax increases.
So 1/3 of the state legislature can hold the whole budget crisis to ransom either to their personal priorities or to their extremist anti-tax ideology, and indeed this is precisely what has been going on for years. Weak though they are in California, the R’s are unlikely to drop below 1/3.
Nutella
So why can’t they pass cuts that go into effect one week after the July vote, with the spending cut equal to the tax increase voted in that day? The one week delay is for the CA equivalent of the CBO to estimate the size of the tax increase.
They’re only suckers if they allow themselves to be suckers.
Jim, Once
Hope you’re right – I think California’s survival depends on this.
Pooh
What could possibly go wrong?
Jeanne ringland
Way off topic, but I just read about the Shawna Forde trial. I hope one of the writers on BJ will cover it. I’m going to email the LA Times and ask that they cover it, but I have not been able to find any mention of it in the archives so I’m pretty sure the issue wasn’t covered 20 months ago when the murders happened.
Article here:
http://crooksandliars.com/clsphinx?keys=shawna%20forde%20trial
J. Michael Neal
I hate to say it, but Californians as a group deserve whatever happens to them. They approved all of the constitutional changes that made the state completely ungovernable. Well, guys, this is what happens.
The prospect I do completely object to is Congress passing a law that permits a state going into bankruptcy to break signed contracts when the reason they have a problem is because they have refused to raise taxes to pay for the spending they authorized. California *could* afford to make itself entirely solvent. It has just chosen not to. That’s not bankruptcy.
300baud
The Republicans did not win the gubernatorial election recently. Arnold Schwarzenegger did, partly because of his movie-star fame and partly because he was a pretty liberal Republican and an up-from-nothing immigrant.
The national Republicans could have learned several lessons for this. E.g., pragmatism, the power of immigrants, cooperation with Democrats when good for the people, or setting their godbothering ways aside. Or perhaps the value of humility, Schwarzenegger displayed after he went head-on against nurses and lost.
Instead they’ve doubled down on arrogance, ideological orthodoxy, irrationality, and political grandstanding. Which, undeniably, works a treat in the places where flying the Confederate flag doesn’t mark you as an irredeemable asshole. California, though, is not one of those places.
KG
I live out here, the GOP attack on the deal has already started. They are calling the plan to keep taxes the same an increase.
@ J. Michael Neal: the States are sovereign, they don need bankruptcy, they can simply declare debt odious and repudiate it
300baud
@Warren Terra:
I believe that is no longer the case. This year California passed Proposition 25, which ends the 2/3rds requirement, and says that legislators won’t get paid when they haven’t passed a budget.
Tim Connor
“Principled conservative” –THE oxymoron of the 21st century.
J. Michael Neal
@KG: They can repudiate debt, but I don’t believe that they can unilaterally break employment contracts. *That’s* the goal of passing a law that would allow a state to declare bankruptcy.
If a state wants to repudiate its debt, I say go for it. They aren’t going to like the consequences, and will end up wishing they’d just paid their taxes, but that’s their call.
J. Michael Neal
@300baud: A simple majority of the legislature can pass a budget, but it can’t raise taxes. That still takes a 2/3 majority. It’s also why I said that Prop 25 was of very little value, and I stand by that assessment.
300baud
@J. Michael Neal: Ah, right. That makes sense. Thanks for the correction.
handy
@J. Michael Neal:
Californians need to shut off John and Ken and start thinking seriously about why we are where we are. Hint: It’s a hell of a lot more than “mooching illegals” and the evil teacher’s union. Californians started mortgaging their future in 1978. And now it’s looking like it’s time to collect.
AxelFoley
Speaking of the CA governorship, look who this former CA gubernatorial candidate with her own blog was cozying up with:
http://theobamadiary.com/2011/01/22/nice-company-you-keep-arianna/#comments
Lady Sybil
I live in California, and this morning I got a call from a pollster who was polling about Brown’s cuts/tax package, or so she said. After I answered a lot of fairly general questions, she got down to what it was really about: an attempt to get me to agree that Brown’s proposed elimination of certain business tax exemptions would destroy the economy. She was aggressive and persistent, reading me a long list of quotes suggesting that closing tax loopholes was the next best thing to Armageddon, and trying quite determinedly to get the answer she wanted, and when I told her that I was not impressed with the arguments, since she was not telling me who the quoted predictions were coming from, she got a bit huffy. I’d say the Repugs are already gearing up.
Cacti
@J. Michael Neal:
Not really true.
Nobody born after 1960 had anything to do with Prop 13.
Kevin
Is the title (California tumbles in to the sea) a reference to Randy Newman’s brilliant “God’s Song”?
handy
@Cacti:
I know plenty of people born after 1960 who think high taxes, CARB and their fascist environmentalist buddies, and mandatory workers’ comp are driving businesses out of California. And many of them vote. Guess how they vote.
Ija
I’m sure ED Kain would say that California is too big to be governed effectively. Bring back local control!
J. Michael Neal
@Cacti: They may not have been responsible for passing Prop 13, but they could have unpassed it whenever they wanted. They’ve never wanted to do that, and still don’t.
Chris
@Kevin:
Steely Dan–My old school
alwhite
The problem with California is that they have voted themselves bread and circuses. Te have a constitution that runs something like 160 pages, most being amounts of money that MUST be spent and taxes that CANNOT be instituted or raised. This has been going on since St. Ronnie’s day – did you know if you bout a commercial property in the 80’s the valuation for property tax would still be what you paid for the place?
There is no fix for California short of throwing out their entire constitution and starting again.
Jeanne ringland
@alwhite: Yes, we lived two miles north of Disneyland and they paid taxes based on that 80’s valuation. They do pay a higher rate for DCA because it was built later, and they do give a heck of a lot of money to the city of Anaheim for various local projects, but they do not pay their fair share of property taxes.
James E Powell
California is screwed unless and until the general public (not the politically attentive) accepts the idea that large-scale changes are necessary. So long as the middle class, home-owners believe that all the problems can be blamed on immigrants, the teachers’ unions and “waste,” no political leader can argue for the kind of changes that are necessary.
James E Powell
@Jeanne ringland:
but they do not pay their fair share of property taxes.
In contemporary American political discourse, a rich person’s or corporation’s “fair share” is not one dollar. No person or corporation, no matter how much income, owes anything to the larger society. Not one dollar.
Delia
I lived in California for nearly 30 years. It’s not really my place in the universe, but the hypocrisy there is no worse than it is anywhere else in this great land. The whole business of government by voter initiatives is corrupt and has led to a lot of California’s problems. Special interests with hidden agendas sponsor an initiative and flood the airwaves with down-home style propaganda that turns out to be completely misleading. What a surprise. But Oregon has the same problem and I think a lot of other states do, too.
And then the general collapse of everything and anything under gooper watch hits harder there. The rest of the country still has the old California Dreamin’ fever and envy. California was one of the places the bubbles went the highest, so when they burst they came down the hardest. Most people are just ordinary schmoes trying to get by and don’t know what to do . . . .
Lysana
@alwhite:
As a Californian, I can only agree while knowing in my heart that the special interests will never let that happen. Meaning most politicians. It sucks that our legislature was so owned by the railroads that we had to put in the citizens’ initiative process to get anything done. It sucks worse that we didn’t demolish it when Sacramento stopped being that overtly corrupt.
handy
@James E Powell:
Not only should they not owe taxes, they should be granted tax credits en masse to compensate for California’s hostile business climate created by all the government regulations and stuff.
PeakVT
@alwhite: There is no fix for California short of throwing out their entire constitution and starting again.
I agree. It’s a total mess.
I was hoping (for no particular reason) Brown would go with an all-cuts budget in order force the day of reckoning on taxes to occur. But with a half and half budget, the state might be able to muddle through until growth picks up. And then the reduced funding levels would become the new normal, leaving the state with an education system comparable to Mississippi.
Martin
Republicans have steadily lost ground in the state to the point that we’re 4 votes shy of having the 2/3 needed for a party line vote to increase taxes. One more election ought to do it.
The GOP can claim that the Dems own the budget, but nobody is buying their shit. One more election and they’ll be as relevant to legislating as the communist party.
Keep in mind that the rumored plan for the ballot initiatives to get the tax increases is to tie them to specific cuts. That is, either voters extend the business tax rates, or 40,000 prisoners will be released. That kind of thing.
Jeanne ringland
@James E Powell: Then Disney goes far over the required amount. Must be run by a bunch of Soshulists, but not so’s you’d notice it.
(My youngest currently works for the Mouse; they have been very good to her over the past 9 years, even if she was not able to recognize it when she worked in the park. She’s on tour with a Disney Live show, which is run by the folks who run the Ringling Brothers Barnum and Bailey Circus. We are tempted to tell people she ran off and joined the circus. She’s a professional dancer and the tour just reached Istanbul. We are enjoying her travelogue of this tour.)
Martin
@Ija: That’s what Brown is trying to do, and I agree with it. A lot of cities would happily raise taxes to meet education funding. Time to take control of the state away from the neanderthals that want to fuck it up for everyone.
KG
@J. Michael Neal: repudiating debt is the same thing. The State can breach its contracts and when sued on it declare sovereign immunity and there is nothing that the injured party can do. States don’t need bankruptcy to do that either.
Mark
@J. Michael Neal: I most certainly did not approve California’s constitutional amendments. Nobody born after 1960 did.
Mark
@handy: You may know plenty of people who think that way, but Obama got 80% of the 18-24 vote in CA, 71% of the 25-29 and 61% of the 30-39. Hell, Obama got 66% of the white 18-29 vote. As with everything else in this country, it’s white people over 65 who are driving policy.
Wile E. Quixote
I’d like to see Jerry Brown start campaigning against the Republicans and the Confederacy. Point out that for every dollar California pays in federal taxes it receives only 78 cents in federal spending. Point out that states like South Carolina receive $1.33 in federal spending for every dollar they pay in federal taxes. Point out that Californians were responsible for inventing personal computers, modern electronics and much of the World Wide Web as we know it and that white, southern conservatives have never invented anything of value or consequence and are drag on America. Point out that the Republican president Republicans lionize was a governor of California, and that the Republican presidents that Republicans hate, Bush I and Bush II, were from Texas. Point out that even with its budget troubles California is a significant hub of innovation while places like Mississippi, Alabama, Arkansas and South Carolina are still worthless shitholes run by dumb racist shitheads who can’t survive without massive handouts. Make California Republicans defend their fealty to the Confederacy. Get people in California to start thinking “Hey, we’d be a lot better off if our money wasn’t being taken away from us and sent to Alabama, Arkansas, Mississippi, Alaska and the other teabagger states.
Nick
@Mark:
why has there been no effort to overturn them?
MobiusKlein
@J. Michael Neal: I was too young to vote for or against prop 13. It’s not my fault. Or my kids’. We are stuck.
LiberalTarian
Raise the fucking taxes already. This is stupid. If you live in California, you can see the decay all around you. Cut benefits/programs for the wealthy (i.e. developers) and raise my fucking taxes. If people leave the state (i.e. Republicans) all the better.
The Raven
What @Warren Terra said. Lots.
Mark
@Nick: you need 2/3 of the voters to overturn it at the ballot box. You’ll never get that.
1991 was the closest shot we had. Stephanie Nordlinger sued the LA County Assessor and took it to the Supreme Court and lost 8-1. And Macy’s sued Contra Costa County that year but didn’t take it to the logical conclusion.
You might as well be asking why the Senate can’t pass legislation with 59 votes.
Mark
@LiberalTarian: Property taxes need to go up, not income taxes. Even Warren Buffett agrees.
Jeanne ringland
@Mark: Oh heck, even my dad agrees.
Zuzu's Petals
@KG:
Not true. Under the federal (and many states’) Contract Clause a state must show that a substantial impairment of one of its contracts is both reasonable and necessary for an important public purpose. See, for instance, UNITED STATES TRUST CO. V. NEW JERSEY, 431 U. S. 1 (1977).
mclaren
Everyone obsesses about Proposition 13, but that’s not the real reason why California’s circling the toilet bowl with the suction drawing it down.
I lived in California for almost 30 years and predicted what’s happening now, except I predicted it back in 1990. I got the hell out of the state back in 1990 because I saw clearly that California was utterly totally 100% unsustainable. Everyone laughed at me in 1990. They ain’t laughing now.
California was built on endless growth, cheap oil, a moderate climate, and plentiful water from the Sierra-Nevada snowpack runoff. After 10 years of massive drought from 1980 to 1990, I realized the climate had changed permanently. Also, Peak Oil was only a matter of time. But worst of all was the end of growth.
A lot of people don’t understand the basic dynamics behind California’s economy. From 1948 to the 1970s, stampedes of people moved to California–young people, working families. There was lots of cheap land, tons of jobs, and the California state and city government reaped a huge bonanza because they could keep taxes low while constantly getting a gusher of new revenue from all the new people moving into the state and paying new property taxes and new car license fees and dumping more and more income tax into the state coffers as more and more people got jobs in California and raised families. It was 30 years of free money.
Then the first oil embargo hit in 1973 and the free money faltered. Again in 1978, the second arab oil embargo hit hard. Suddenly a state built on freeways and cheap oil didn’t work quite as well. At the same time, California had become so crowded by the 1980s that there was no more cheap land, and when the Cold War ended in 1989, all the defense and aerospace industries took a tremendous hit. When the dot-com bubble finally blew up in 2001, more high-paying businesses shut down and left the state. Once upon a time, Intel located all its factories in California. After the electric-power debacle in 2001, they vowed never to build another factory in California again.
Between the crowding, the congested freeways, the polluted beaches with CLOSED signs on them because of sewage spills, the sky-high rents, there was no more cheap land and no more jobs and people stopped stampeding into California. Today, the net population flow in California is negative: more people leave every year than come in.
Once upon a time, California was known as “The Science State” and the state’s major expenditure was on building universities and community colleges. Once upon a time, California had the best K-12 schools in the United States. Today, California’s major expenditure is on prisons and prison guards (20% of CA’s prison guards make more than $100,000 a year), and California is known today as “a gulag with a nice ocean view.”
All the social and environmental factors that worked together to make California a nice place to live from 1948 to 1988 (climate, land, jobs, oil price, plentiful water piped over the San Gabriel mountains from the Colorado River) today work together to make California a hell on earth. The climate has turned broiling (Woodland CA hit 119 degrees F on 23 July 2006; downtown LA hit 114 degrees F, a new record, in summer 2010, and this is only the start), there’s no more empty land, there are no more jobs, oil prices are skyrocketing (Deutsche Bank predicts $175 per barrel sometime around 2016 — wait till you see what that does to California’s commuter car culture), and global warming is drying up the Sierra-Nevada snowpack. The massive overcrowding in HelL.A. and Scam Diego has produced huge social pathologies and skyrocketing crime.
The problem really isn’t Prop 13. If California repealed Prop 13 tomorrow, its economy would still not work. There are too many people, the state depends on cars and cheap oil that’s no longer cheap, it’s too crowded, the land costs far far far far far far too much and the jobs have gone away and aren’t coming back (no more B2 bomber construction jobs, no more Apollo program rocket jobs, and in the near future no more high-tech Buck Rogers superweapons jobs for laser beam weapons and anti ballistic missile systems and other crackpot DOD superweapons that don’t work).
California worked for a while because it was a giant state-sized Ponzi scheme: make tons ‘o tax bucks off young families who moved in the state to work at high-paying defense and aerospace and computer industry jobs. Today, the young families are moving out of California, and the defense and aerospace and computer industry jobs are being created in China and Europe and Asia, not in California.
California is the future of America. It’s dying, and nothing can bring it back.
Nellcote
@mclaren:
You say it’s overcrowded and people are moving away. Isn’t that a good thing?
Roy G
@Wile E. Quixote nails it FTW – Cali is subsidizing the Red States. Perhaps it is time to remind the rest of the country how much they rely on us.
Yes, the state is in a fiscal mess, and special interests like it that way. However, I strongly disagree that California is ‘dying’ – while it may not be all milk and honey, it has too many natural advantages that can’t be replaced. Nevada can’t grow ports, for example. Brainpower and local resources will allow the next generation of Californians to adapt to the Brave New World better than most -or any – states. Only the Reaganite dreams of dominion uber ales will die.q
HE Pennypacker, Wealthy Industrialist
@mclaren: mclaren, what source can you cite that California’s population growth is negative? The US Census Bureau says 9+% for the last decade.
Guess you’re happy to have left. A couple years ago I left for 15 months — to live in Vancouver BC — and decided I love it here in Nor Cal far too much. I don’t think I’ll ever leave now, unless I win the lottery and can move to Italy.
HE Pennypacker, Wealthy Industrialist
@Nellcote: Exactly. Most of us who live here would be happy for that result. Sadly it’s not true.
Not to diminish the problems the state faces.
trollhattan
@HE Pennypacker, Wealthy Industrialist:
Oh yeah, we went up several million between ’00 and ’10, just not enough to pick up another house seat (but we sure as hell aren’t losing any like several states I could mention).
It will be interesting to see 1. what the redistricting commission comes up with and 2. whether extending the sales-income-license tax ballot item will pass this summer. If not, then no budget and that dance has gotten quite old. Ah, those lucky pups in no-tax Texas…oh, wait.
Let’s face it, all but a handful of states are going to avoid massive deficits because the stimulus bux won’t be there next fiscal year.
FuzzyWuzzy
@Kevin: Bill Hicks, Arizona Bay; inspired Tool, Aenima.
Peppier punky version is 7 Seconds: (We’ll) Sink with California (when it falls into the sea).
Not to be confused with California Uber Alles by the Dead Kennedys.
FuzzyWuzzy
That link came out AFU.
mey
@Warren Terra:
Small correction, Prop 13 passing wasn’t “celebrated” by Jerry Brown; he was actually against it. (Once passed, as governor, he did his job and implemented it.)