Redistricting Win, Lose, or Draw

More competition. More moderate politicians. Less sleazy deal making. More good stuff. Less bad stuff.

Like so many electoral efforts, the two campaigns waged in favor of independent redistricting promised a lot of fixes to California voters tired of dysfunctional governance. Soon... very soon, in fact... the voters are going to get their first look at what they bought.
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Revenues, Talks, Votes?

November 17, 2008 · Filed Under CA Budget · Comments Off 

The big immediate news in California these last few days has been the devastating wildfires burning through the Southland. Even so, the inferno that is the state budget crisis appears ready to rekindle here in Sacramento.

The state Senate has now scheduled floor session for this coming Sunday, ostensibly for a vote on some kind of fiscal crisis solution. As you know, the state is staring down an abyss that's $11.2 billion deep in the short run. The 4:00 p.m. session was announced this afternoon, thus giving incumbent lame duck senators ample notice for their travel back to the state Capitol.

You'll remember that Sunday is the deadline mentioned by outgoing Senate President pro Tem Don Perata for legislative action before the new Legislature is seated on December 1.

The real question, of course, is whether there will be a deal in hand by week's end? It's become clear that Democrats want a list of new revenues GOP legislators are willing to raise... in exchange for a list of items they are willing to cut. And given the severity of the problem, it seems that both lists need to be substantive. And serious.

Meantime, Governor Schwarzenegger's budget office has released the latest revenue data. The report shows that October revenues were about $2 million better than expected in the analysis Schwarzenegger unveiled just 11 days ago, while the fiscal year revenues are now about $20 million worse than expected. Relatively speaking, those are small numbers. Of course, when you match up actual revenues with the projections contained in the official budget signed into law back in September... the gap is much, much larger. Hence the call for immediate action.

It would be an oversimplification to say that nothing's happened since the governor called the special session; legislative leaders have met several times, and the Assembly Budget Committee debated Schwarzenegger's proposals last week. But there's also not what you'd call a palpable buzz inside the Capitol. Instead, the odds makers would probably say the safe money is on limited action now, with more substantive issues postponed until the newbies take office next month.

Dems: $11.2 Billion Budget Gap

November 5, 2008 · Filed Under CA Budget · Comments Off 

The current and incoming leaders of the Senate said today that state government faces an $11.2 billion gap between revenues and expenditures in the fiscal year that began just four months ago.

That figure, according to Senate President pro Tem Don Perata, is from the budget team of Governor Schwarzenegger. The governor is slated to make his own official announcement tomorrow; a budget spokesman for the guv said today he couldn't comment on the deficit estimate.

Perata and his successor, Sen. Darrell Steinberg (D-Sacramento), told Capitol reporters that two tax ideas should be on the table when the lame duck Legislature reconvenes under the special session proclamation Schwarzenegger will sign tomorrow.

Neither idea is new. The lesser of the two... both in criticism and fiscal value... is a new tax on oil production in California. The oil severance tax has come up twice in recent times: as part of the ill-fated Proposition 87 in 2006 and as a legislative proposal killed earlier this year by Assembly Republicans.

The second one... well, this one you've heard of. Democrats say that the dire situation demands a repeal of Schwarzenegger's 2003 permanent cut in the vehicle license fee, the infamous "car tax" that he rode into office during that year's recall election. VLF revenues used to go directly to local governments, but the state has been making up the lost revenue for years. Reversing the governor's VLF rollback wouldn't be easy, thanks to a complex system now controlling this flow of money.

The two Senate leaders said today, though, that it's a fight worth having.

"No one likes taxes," said pro tem-in waiting Steinberg "But we have an obligation to fully fund public education, and to fund infrastructure, and to make progess on health care."

The Democrats say the value of the two tax increases would be about $7 billion... but there's a catch: that's how much the tax hike would bring in for a full fiscal year, and remember, we'll be almost five months into the current one by the time legislators reconvene here at the state Capitol.

In other words, even raising these two taxes would still require a lot of other tough choices in order to get to $11.2 billion worth of solutions.

Not Over, You Say?

September 17, 2008 · Filed Under CA Budget · Comments Off 

"So many tears I've cried. So much pain inside. But baby it ain't over 'til it's over." -- Lenny Kravitz

BUDGET DAY PLUS 78 -- An unexpected and curious meeting took place this afternoon between the four legislative leaders and Governor Schwarzenegger, the kind usually done while budgets are still in flux.

So is this one still in flux? After yesterday, it was understandable if most folks considered the budget script to have been written: Schwarzenegger vetoes budget, Legislature overrides veto, everyone goes home.

And so what was today's confab all about? "Everybody's goal is the same here, said Senate GOP Leader Dave Cogdill after the meeting. "Try and avoid the veto."

Others seemed not so optimistic of changing the governor's mind. "I think he's pretty dug in," said Senate President pro Tem Don Perata upon leaving the meeting.

Perata also suggested the meeting ended earlier than it should have. "I wish he would've stayed, but he didn't," he said.

Schwarzenegger later left Sacramento and flew to Fresno for a previously scheduled budget rally. There, numerous speakers took whacks at the ratified budget as though it were a pinata at a birthday party. "How in God's name can you support that?" said Fresno Mayor Alan Autry.

Schwarzenegger was a little more subdued, telling the crowd that "the important thing now is not to point fingers."

The buzz around the Capitol today is all about figuring out what can be fixed in this budget to gain Schwarzenegger's blessing. On Monday, his focus seemed to be the new rainy day reserve fund, with legislators giving him two of three modfications to the proposal outlined in a now well-publicized letter.

But today's Fresno rally, and yesterday's veto news conference, reinforced the sense that the governor has many more problems with the spending plan.

Is there room to make major changes? Certainly some think there should be; several newspaper editorials and even an organized protest today at the Capitol all were in demand of a new deal.

Troube is, not everyone wants the same changes... which is why the impasse has lasted now more than seven weeks.

The next few days will be interesting. Schwarzenegger isn't scheduled to veto the budget until Friday, leaving everyone some time to think... and some to squirm.

Budget: Return To Sender

September 16, 2008 · Filed Under CA Budget, The Governor · Comments Off 

BUDGET DAY PLUS 77 -- So what should we call it? Extra Innings? The Throw Down in Sac Town? Maybe various riffs on Governor Arnold Schwarzenegger's movie career?

Whatever it ends up being labeled, the budget saga took a decidedly confrontational turn today when the governor announced that he will veto the spending plan... and... just for good measure, "hundreds" of other pieces of legislation sent to his desk from the just concluded legislative year.

In other words, it's on.

"Enough is enough," a defiant Schwarzenegger said at this afternoon's news conference. "Californians have put through this roller coaster ride too many times."

No need to belabor the issue here, as just about every news organization (including us) will have this story out before the sun goes down. The governor was somewhat evasive on how many bills he'll veto, which may mean that some proposals in 2008 he supported or sponsored will still become law.

As for other tibits...

Did Schwarzenegger ever specifically promise Democratic leaders that he could deliver GOP votes for a tax increase?

Senate President pro Tem Don Perata, speaking early this morning after the budget vote, said yes:

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But when asked about that this afternoon, the governor painted a different picture.

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The governor also took a jab at the budget's systemic reform plan -- specifically, the provision to create a rainy day fund equal to 12.5% of revenues. Schwarzenegger wanted to make it tougher to take money out, and today called the proposal "fake budget reform."

And in a sign that he's already moved on... sort of... the governor predicted his veto will be overriden, something that's starting to seem certain based on statements from even Republicans, like Senate GOP Leader Dave Cogdill.

The governor predicted the budget deal will force either a "huge tax increase next year, or to cut education severely."

Of course, the veto and theoretical override (which could begin as soon as tomorrow in the Assembly, depending on the outcome of private legislative meetings today) allow the governor to do something else: wash his hands of the spending deal from a PR perspective... thereby saying, hey, I tried to stop it.

Legislators and others will no doubt quibble with that perception... given they believe many elements of the budget were either the administration's ideas or at least agreed upon by the governor.

But Schwarzenegger has proven himself to be a master at the simple and direct political kind of messaging -- something that could easily fit with a budget that the Legislature seems to go around him to implement.

Senate Budget Vote Tomorrow

August 28, 2008 · Filed Under CA Budget · Comments Off 

BUDGET DAY PLUS 58 -- In hopes of ending a budget stalemate that's so far looked to be one for the record books, the state Senate tomorrow will vote on a budget plan that hinges on the chances of a few Republicans breaking with their party leadership and voting aye.

The overview budget document distributed this afternoon by Senate President pro Tem Don Perata's office is a modfied form of Governor Schwarzeneggrer's "August Revise" proposal.

Most notably, Senate Democrats are accepting Schwarzenegger's temporary sales tax increase, but rejecting his call to then lower the current state sales tax. The plan also calls for slightly more state spending than the governor has proposed.

And in what could be considered a major concession, it keeps intact Schwarzenegger's call for a larger rainy day fund for state government as well as Schwarzenegger's demand for new gubernatorial power to unilaterally cut spending if the budget gets out of whack in the middle of the year.

The intrigue, of course, is whether at least two GOP senators will break ranks and vote for the proposal. A written statement from Senate GOP Leader Dave Cogdill makes it clear the proposal is not going to get his vote.

Of course, approval in the Senate would only mean that the budget plan then lands in the lap of the Assembly, where its tax increase proposal would need at least six GOP votes... a much tougher task.

Still, tomorrow's vote does symbolize some movement on the budget front... even if only to force an actual floor debate on budget priorities of the two sides.

Budget Borrowing, Or Not?

August 20, 2008 · Filed Under Ballot Measures, CA Budget, Taxes, The Governor · Comments Off 

[see below for update]

BUDGET DAY 50 -- Welcome to the newest saga in the budget drama of 2008: will the budget impasse be resolved with borrowing big bucks earmarked by voters for other government services, and are legislative Republicans leading the charge?

In fairness, this isn't actually a new topic; rather, it's newly prominent... after Governor Schwarzenegger called out his fellow Republicans yesterday at the end of yet another unsuccessful budget meeting.

At issue: the possibility of borrowing a few billion dollars from money set aside for everything from local government (through 2004's Proposition 1A) and transporation (through 2002's Proposition 42 and 2006's Proposition 1A) to early childhood programs (through 1998's Proposition 10 tobacco tax) and even money for mental health programs (2004's Proposition 63).

While there's not enough money in these accounts to completely close the budget gap, it's believed that these bucks, plus spending cuts and... well, some good old-fashioned budget gimmicks... could probably get the state at, or near, closing the $15 billion deficit.

But the voter-approved initiatives require the money to be paid back sooner rather than later, sometimes with interest. In other words... it would be a one-time solution that would probably add to fiscal headaches in years to come.

Schwarzenegger's accusation yesterday that it's Republicans pushing this as a solution left the leaders of both GOP legislative caucuses angry.

But it's been mainly Republicans who have expressed public willingness to consider such a plan; Democrats have pretty consistently shot down such talk when it's surfaced the last few weeks.

One interview in particular with reporters that immediately stuck in the craw of local government folks and others (and I know, because a portion of it aired in a story of mine the next day and the phone started ringing just after our newscast) was given by Senate GOP Leader Dave Cogdill two weeks ago today.

Cogdill didn't necessarily say that he wanted to borrow the money, but acknowledged such action as a way out of the jam.

His unedited comments, first to the idea of a tax hike, and then to the issue of borrowing, can be heard below.

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In a written statement released yesterday after the governor's public dressing down of Republicans, Cogdill tried to make the point that such borrowing would only happen if Democrats refused to cede any ground off their program priorities.

"If Democrats want to increase spending," Cogdill's statement reads, "they are going to have to either raise taxes or borrow money."

In other words, is it Democrats demanding certain spending... or Republicans rejecting certain revenues? Such ponderances lead to the same kind of brain freeze as a good milkshake.

One thing seems certain: should such borrowing be the ultimate solution to this standoff, it will probably be impossible to ever figure out just whose fingerprints are on it.

[update 2:38pm Schwarzenegger, in a news conference laying out a new budget proposal, seemed to close the door on the borrowing plan, but only after a little prodding from my follow-up question. His final comments on the suggestion: "It is not a wise idea, and I will not do that, no."]

Perata Attempts To Squelch Borrowing Buzz

July 30, 2008 · Filed Under CA Budget, People · Comments Off 

BUDGET DAY PLUS 29 -- The hallmark of a good horror movie is that just when everyone thinks they've stabbed, or strangled, or mutilated the monster to death... he rears up again, scaring the bejeebers out of everyone.

In budget terms, Senate President pro Tem Don Perata appears to be trying again to kill the ugly budget beast that is talk of raiding transportation funds.

In an emailed letter from his campaign this afternoon, the Oakland Democrat emphatically stated he is not on board with any plan to take money from the Proposition 42 and Proposition 1A transporation funding guarantees.

"Raiding these funds now would break faith with voters who joined us in supporting the plan to rebuild California," Perata writes. "I can't stop people from floating trial balloons in Sacramento, but I can sure shoot this one down before it gets very far."

This is not the first time Perata has rejected such Capitol budget chatter. And transportation groups are already growling at legislators, through a media campaign, to stay away from their money.

But still the talk persists, with more and more Capitol denizens seemingly braced for some kind of eventual deal that relies on borrowing -- a theory espoused today in a piece by Sacramento Bee columnist Dan Weintraub.

Of course, one could parse the words in Perata's letter and observe that his pledge to not borrow only specifies transportation funding, and not the myriad of other funds approved by voters in recent years. But on previous occasions, the pro tem has condemned talk of all such borrowing schemes... so perhaps he's still referring to the whole concept.

But as the budget impasse drags on, and Governor Schwarzenegger prepares to issue his minimum wage executive order tomorrow, today's promise from a leading Democrat only further confuses those of us watching the process as to how it'll all get resolved.

No Winning Ticket Yet

July 17, 2008 · Filed Under CA Budget, CA Government · Comments Off 

BUDGET DAY PLUS 16 -- Today's confab between legislative leaders and Governor Schwarzenegger certainly didn't resolve the budget impasse, but it did feature some serious talk on a familiar subject: the California Lottery.

The roughly two hour meeting of the "Big Five" came as both houses of the Legislature sit in recess with rank-and-file members on what many critics have called an undeserved vacation. And while leaders exiting the meeting indicated there was a lot of broad discussion on issues, all confirmed that the governor's team brought in analysts to discuss ways to squeeze money out of the lottery.

You'll remember that Schwarzenegger placed a plan on the table several months ago to balance the budget, in part, through the sale $15 billion in bonds repaid with future lottery revenues. The specific pitch never gained much traction at the state Capitol, with Democrats saying it was unrealistic to expect the money to show up in time to help this year's dilemma... and Republicans decrying the lottery proposal's backup plan -- a sales tax increase.

A phalanx of financial advisers, along with the governor's economic guru, David Crane, were seen exiting the meeting just after noontime. And yet Democrats still said the issue was a possible source of cash for the future... but not now.

"I think it's pretty conclusive that it's a not a budget solution for this year," said Senate President pro Tem Don Perata.

Of course, the voters haven't seemed hot on the idea, either.

Republicans came out of the meeting saying they remain focused on some kind of budget reform proposal, still a tough sell to Democrats.

And as for what happens next... don't expect full legislative action soon. Almost two weeks ago, Democratic leaders vowed to work towards a full budget vote in both chambers by next week. Will that still happen?

"I don't believe so," said Assembly Speaker Karen Bass.

Dems vs. Dems Over Pro Tem Help

July 10, 2008 · Filed Under People, Political Parties and Independents · Comments Off 

A nasty war of words is raging among Democrats over the state party's recent -- and hefty -- contribution to the legal defense fund of Senate President pro Tem Don Perata.

Less than two weeks ago, the California Democratic Party gave $250,000 to help defray the legal bills of the Oakland Democrat for an FBI investigation into his business dealings. It was the second big donation from the party in less than a year, bringing the total to $450,000.

Perata's legal defense fund reported 2008 expenses as of mid May of $290,000 and very few contributions; outstanding debts were reported at just about $250,000. Other than the Democratic Party contribution, the Senate leader's defense fund received a $25,000 check from the Pechanga Band of Luiseno Mission Indians in June.

But the donation of Dem party cash has ignited some furor among party activists. On the grassroots blog Calitics this morning, Democratic activist Bob Brigham took aim at party chairman Art Torres for approving of the donation, calling for the veteran leader's resignation:

"[Democrats] have every right to expect that contributors' money will be pumped into districts where Democrats are locked in tough election fights with Republicans, or into struggles with the GOP over the budget. Instead, it's paying the legal bills for Perata..."

Perata was asked about the donation yesterday after a news conference on the state budget. He disagreed with those who said he shouldn't be getting financial help from the party. "I believe Democrats respond to defend Democrats," he said.

And, though he was asked only about the controversial cash assistance from the party, Perata appeared to take a swipe at the FBI investigation itself, even as one Bay Area newspaper reported yesterday that something new may be brewing in the case.

"I believe this is a partisan attack," Perata said. "It's no mistake who's in the White House and when this started... I'm the leading Democrat in the state of California."

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