UPDATED, 6:35AM: The Sacramento Bee reports that the California State Senate approved the state budget agreement early this morning, winning over State Senator Abel Maldonado, R-Santa Maria, who got the three proposed constitutional amendments he wanted, minus a provision for withholding legislators' pay when they cannot approve a budget. The issue now goes to the State Assembly, where it expected to pass before being sent to Governor Schwarzenegger to sign.
California's budget standoff continues. The holdup remains the State Senate, which is one Republican vote shy of approving the budget patch to fix the state's projected $42 billion deficit through June, 2010.
The State Senate has been locked down, with senators having to bring sleeping bags into their chambers. A couple nights ago, it looked like there might be an agreement in the works, but that all fell apart as the Republican caucus sacked it's leader, Sen. Dave Codgill, and replaced him with a harder-line Sen. Dennis Hollingsworth.
The Sacramento Bee had the story on the leadership change:
Sen. Tony Strickland, R-Moorpark, who was named as the caucus' elections chair, said he hoped the change in leadership would "let California know where we stand on this $14.3 billion tax increase. We believe that tax increases are harmful to the people, the hardworking California families."
But [Sen. Abel] Maldonado said he disagreed with the change in the midst of budget negotiations.
"I just can't believe that in the middle of the night we would oust our leader," he said. "I didn't support Dave Cogdill for leader, but I didn't vote to vote him out today. It's the wrong time to make a change in this process."
Cogdill faced criticism throughout the weekend after negotiating a budget deal with other legislative leaders and Schwarzenegger but failing to secure enough votes in his caucus. Some members, including Maldonado, criticized his leadership skills, but others acknowledged that few members could control such a splintered caucus.
"I certainly wish the new leader all the best," Cogdill said before Hollingsworth was chosen. "It's an extremely difficult job."
Maldonado may prove to hold the single game-changing vote. The Bee reported early yesterday evening that State Senate Democrats were drafting three proposed constitutional amendments that Maldonado sought. The measures would go to the voters as ballot propositions. According to the Bee:
Maldonado, R-Santa Maria, could provide the crucial 27th vote necessary to pass a budget package that has been stalled since Saturday. In a lunch meeting at Spataro with Gov. Arnold Schwarzenegger, Maldonado asked for ballot measures to create an open primary system, prohibit legislative pay raises in deficit years and stop legislators from receiving salaries if they do not pass a budget on time.
Measures containing those three constitutional amendments are being drafted today. Maldonado spokeswoman Brooke Armour said constitutional lawyers are reviewing the three measures.
The sticking point for the Republicans is taxes. The Republican State Senators took pledges to not raise taxes, and going back on those pledges might be a killer for the political careers of a good many of them. They're really caught between a rock and hard place on this one. As L.A. Times columnist George Skelton pointed out on Monday, when you look at the budget math, no matter how much you hate the idea of raising taxes, there's really no way of balancing the budget without some form of tax hikes.
To begin with, there's all those payments on various bonds California voters have approved over the years to finance all sorts of education, healthcare, transportation, law enforcement, and environmental projects. Claremont's own Padua Ave. Park was slated to be partially funded to the tune of $850,000 by money from just those sorts of state bonds, and Claremont feeds regularly at the state bond trough.
All that those bond payments get paid out first because California's credit rating would take a huge hit if the state started missing payments to its bond holders. So, right away you have about a 5% chunk of California's annual revenues that can't be touched. (That ratio is likely higher now that sales tax and capital gains tax revenues have cratered.) The state's Legislative Analyst's Office had a breakdown of the state's bond debt prior to last November's election:
The LAO estimated California's bond payments to be about $4.4 billion in fiscal year 2007-08 on a total bonded indebtedness of about $53 billion. The state also has approximately $68 billion in unsold bonds that have been approved by voters.
So, if you're totally against raising taxes, where do you find the $42 billion in savings? The Times' Skelton wrote:
Well, you could fire every state worker under the governor's control and the savings wouldn't come close to balancing the budget.
According to the state budget document, there is the equivalent of 205,000 full-time jobs controlled by the governor. There actually are more workers than that because some are part-time. Do the math based on 16 months, since that's now the time frame of the projected deficit, assuming a balanced-budget package could be implemented by March 1.
You could lay off all those state workers -- rid yourself of their pay and benefits -- and save only $24.4 billion.
Meanwhile, you would have dumped 160,000 convicted felons onto the streets because all the prisons were closed after the guards and wardens were fired. There'd be no Highway Patrol because all the officers were canned. State parks would be closed because there were no fee-collectors or rangers.
Truth is the savings wouldn't even add up to $24.4 billion because some of those employees are paid out of small special funds that are self-sustaining. It's the big general fund that suffers the deficit. But let's say the books could be shuffled mysteriously and all that savings realized. You'd still need a lot more.
OK, lose the Legislature, you say. It's good for nothing. But it's also not worth much when you're trying to fill that size deficit hole. The Legislature's 16-month cost is roughly $400 million.
So now one branch of government is critically wounded, and another is dead. And we're still $16 billion short of enough savings.
What many people don't realize is that around three-fourths of the state's general fund flows out to schools and local governments, much of it because of voter-passed laws.
But there is another place to look for savings: You could cut off all state money to higher education -- the two university systems and the community colleges. That would save the remaining $16 billion.
Don't like any of the above -- all those firings and slamming college doors on kids?
Instead, you could eliminate virtually all state money for healthcare and social services -- grants for the aged, blind and disabled, assistance for the homebound, medical care for the poor, mental health treatment, welfare. . . . No exceptions.
Of course, you'd then be turning away tons of money from Washington, which shares the costs. And you would be violating some federal laws. But there, it's done. You've avoided a tax increase. What a state!
And those are the choices. Voters, it's time to take responsibility for your past decisions on your representatives and on the debt you've approved. You decide. And those of you who don't vote? You get no say.
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