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Daniel Weintraub

California Insider

A Weblog by
Sacramento Bee Columnist Daniel Weintraub

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« May 2005 | | July 2005 »
June 30, 2005

Higher ed funding

The Legislative Analyst has a new primer out on higher education funding that's worth reading. Among other things it shows that funding for new enrollment has actually exceeded the growth in the college-age population over the past decade. There's also an interesting chart that shows how the marginal cost associated with each new student is figured.

The report is here.

Posted by dweintraub at 11:15 AM



It's not about process

The Democrat budget scheduled to be voted on today doesn't really do any more to hold down spending in 2005-06 than their last product. It counts $390 million in May revenues that exceeded projections, and adopts a tiny piece of the governor's budget initiative by spreading out mandate repayments to local governments over 15 years. It also assumes that there will be no cost-of-living adjustment in 2006-07 for the state bureaucracy.

But I question the administration's political judgment in holding up final approval by demanding mid-year authority for the governor to cut the budget if a (bigger?) deficit is emerging, which draws on another piece of his budget reform measure.

The public hates late budgets, hates them all out of proportion to the importance of the timing issue. And voters will take out their wrath on whomever they see as responsible for a late budget. If the governor holds up the budget by pressuring lawmakers not to vote for it, and links that delay to his budget reform, his reform is going to be even less popular than it was before. The voters will see it as a fight over process, not substance.

If he wants to hold up the budget, he needs to be honest: He thinks it spends more on social services and welfare than the state can afford, and builds in costs for those programs for next year that the state will not be able to afford.

That's what this is about. Not process.


Posted by dweintraub at 9:28 AM



June 29, 2005

Energy initiative challenged

The Independent Energy Producers are filing a lawsuit today seeking to throw the energy initiative sponsored by The Utility Reform Network off the ballot. The claim: the initiative seeks to use a statute to amend the Legislature's powers over the Public Utilities Commission, which are set by the constitution. It takes a constitutional amendment, not a statute, to do that, the plaintiffs claim.

Posted by dweintraub at 11:42 AM



The future of... the economy

814-0629forecast.gif

See the Bee's story here on the latest regional forecast from the University of the Pacific business school.

Posted by dweintraub at 7:38 AM



The race is on

Today’s Field Poll delivers one more wallop to Schwarzenegger, showing what his early prospects are should he run for reelection in 2006.

Inclined to reelect him?

February: 56 percent yes, 42 percent no
June: 39 percent yes, 57 percent no

Possible match-ups:

Angelides 46, Schwarzenegger 42
Westly 44, Schwarzenegger 40
Schwarzenegger 44, Reiner 42
Schwarzenegger 46, Beatty 37

In the Democratic primary, Angelides leads Westly, 37 percent to 28 percent.

Add the Hollywood boys and it looks like this:

Angelides 33
Westly 19
Reiner 15
Beatty 9

Posted by dweintraub at 6:57 AM



June 28, 2005

Tuck named to air board

Schwarzenegger has appointed Cindy Tuck as chairwoman of the Air Resources Board. Here's an excerpt of her bio from the governor's office.

Tuck has more than 20 years of direct air quality experience in California. She has served as general counsel and manager of the State and Bay Area Air Quality Committees at the California Council for Environmental and Economic Balance since 2000 and prior to that she served as a consultant to the Council for three years. From 1993 to 2000 she was an associate with the Law Offices of William J. Thomas. From 1987 to 1993 Tuck served as a government relations advisor to Heron, Burchette, Ruckert & Rothwell, The Gualco Group and Seyfarth, Shaw, Fairweather and Geraldson. Tuck's experience also includes three years as a civil engineer for the Environmental Services Department of Pacific Gas and Electric Company and two years as an environmental engineering research assistant at the University of Illinois. She is a member of the State Bar of California and is registered as a professional engineer in California. She is also a member of the California Climate Action Registry Board.

Posted by dweintraub at 3:30 PM



Phony reform

The Democrats have been promising for weeks to start rolling out specific reform proposals responding to the agenda Gov. Schwarzenegger laid out in January. Today they finally delivered. And it wasn't a very promising start.

The good news is that the Democratic leadership in the Senate acknowledges that removing the job of drawing district lines from the direct hands of the Legislature would be a good thing. The bad news is that their proposal is hardly better than the status quo, and actually would probably be worse.

Under the current rules, at least there is a check and balance between the Legislature and the governor.

Under the Senate Democrat proposal, an amended version of SCA 3, the lines would be drawn by a 7-member commission, with four of the seven members appointed by the legislative leadership. In other words, a majority of the members of the panel would be beholden to the same people who draw the lines now. But there would be no governor to check their work. Only one appointee would be made by the governor. The remaining two would come from the Judicial Council and the president of the University of California.

The proposal's criteria are also thinner than offered in the Costa measure endorsed by Schwarzenegger. There's no requirement to nest two Assembly districts into each Senate district, which is a huge factor in reducing the game-playing. And there's no ban on using political data, voter history and incumbent addresses in the process. Costa bans them all.

Supposedly this is an opening offer from the Democrats. But it looks like just more evidence that they are not serious about reform.

Posted by dweintraub at 2:25 PM



Why we're bummed

Interesting new Field Poll out today. Interesting like a train wreck. By a two-to-one margin, Californians say they think the state is going in the wrong direction.

The reasons are also interesting. About 28 percent of those who say the state is on the wrong track say they oppose the governor's policy direction. That turns out to be about 16 percent of all those interviewed. Another 23 percent of wrong-trackers, or 14 percent of all those interviewed, said the state's elected officials generally are not doing a good job. The rest cited a variety of ills, from the schools to the economy and immigration.

Of the 28 percent who think things are going swell, about 29 percent cited the economy while 27 percent said they thought the governor was doing a good job. Both those amount to about 8 percent each of the total sample.


Posted by dweintraub at 9:33 AM



June 27, 2005

AARP on estate recovery efforts

The AARP has published a study of state policies regarding estate recovery, the practice of going after the money left to heirs by recipients of Medicaid, or Medi-Cal in California. No surprise that California is tops in the nation, recovering $54 million in the most recent year. But there's a lot of interesting stuff in the report on this controversial practice. You can find it here.

Posted by dweintraub at 2:01 PM



Florida pensions

I had a message on my voicemail this morning from an irate state employee who said I've been giving public pensions in California too harsh a critique. He suggested I look at Florida where, he said, the pensions make California's look puny. This story from Ft. Lauderdale, though, says Florida state employees typically retire with just under half their salary after 30 years on the job. That's considerably less than California's benefits. Does anybody out there have better info on the Sunshine State? Am I missing something?

UPDATE: This Florida state website (scroll down) seems to say that state employees get a pension at age 62 figured by multiplying their years of service times their salary times a factor of 1.6. That's a third or more less than California employees get.

UPDATE 2: A reader points out that the Florida system requires no contribution from the employee, while California workers typically contribute about 5 percent of their salaries toward retirement. That's a good point. Still, the state of Florida contributes only about 6 percent of payroll to this plan, while California is kicking in about 15 percent for its general workforce.

Posted by dweintraub at 1:08 PM



Non-voters

A new study by a professor at the University of Missouri says increases in voter turnout do not change election results. The preferences of non-voters, his study shows, tend to break down pretty much the way voters do, with the caveat that in some cases they would increase the margin of the winning candidate. The study is not online but I can email you the 26-page pdf file if you are interested.

Posted by dweintraub at 11:54 AM



Paycheck protection in other states

This Bee story says public employee unions have blunted the effect of paycheck protection measures passed in other states. But it mentions that in Utah, the percentage of teachers contributing to the union's political fund has dropped from 68 percent to 6.8 percent. One reason: the law says the government can no longer collect political money, even if the union members agree to have it taken from their paychecks. Instead, the union has to contact its members and ask for the money.

That seems like a sound principle to me. Union issues aside, the government really has no business getting directly involved in politics by helping certain private groups raise money to spend on campaigns.

Posted by dweintraub at 9:12 AM



June 24, 2005

No 'free riders'

Massachusetts Gov. Mitt Romney endorses an individual mandate for health insurance.

Posted by dweintraub at 4:57 PM



Peace talks edge forward

The Chronicle and the Times both report this morning that the governor and Democratic leaders are inching toward a possible compromise on Schwarzenegger's reform package. I suspect this is also why the Senate Democrats' unveiling of their alternative redistricting reform has been repeatedly delayed.

Posted by dweintraub at 7:07 AM



May revenues up $390 mil

The Department of Finance says the state's tax receipts were $390 million above projections in May. Income, corporate and sales tax all came in higher than expected.

Posted by dweintraub at 7:04 AM



June 23, 2005

It's all about the union dues

Here's my take on why the recent Field Poll results, which seem to favor the Democrats, actually help explain why the Democrats have come to the table willing to negotiate a unity slate of reforms with the governor.

Posted by dweintraub at 10:28 AM



June 22, 2005

Gov's measures get mixed poll review

Today's Field Poll is on the three ballot initiatives that the governor has so far endorsed: a budget reform, an independent commission for redistricting, and changes to the way teachers are hired and fired.

The news is mixed for Schwarzenegger. Teacher tenure is ahead by a wide margin. His budget reform and the redistricting initiative are losing badly.
Among likely voters, here are the numbers:

Tenure 61-32
Budget 35-42
Remap 35-46

Field also asked people if they had heard of the initiatives before being read the ballot summary. It is interesting to look at what happens when that is factored in.

Tenure
Heard of it 60-37
Not heard 64-25

Budget
heard of it 36-49
not heard 31-27

Redistricting
heard of it 47-43
Not heard 17-50

That last number is startling, and consistently shows up in polls about redistricting. People who have heard of the issue and understand it tend to support reform. The less people know about it, the less they like the idea of taking the power from the Legislature and giving it to a commission.

On the budget measure, the reverse is true. I suspect this is because most people who have heard about it have heard that it would change Prop. 98 and potentially reduce the long-term growth in education spending.

Large numbers of voters, apparently, are up for changing teacher hiring rules whether they have heard of the idea or not.

The full poll, with breakdowns by region and party, should be here later this morning.

Posted by dweintraub at 5:32 AM



June 21, 2005

Humble pie

There was a sudden outbreak of humility in the Capitol today and lots of talk of grand compromise, on the budget and other matters. Who knows if it will last, or how much of it is just posturing, but recent poll numbers appear to be having a sobering effect on all sides.

The governor, of course, is licking his wounds from his 37-53 approval rating in today’s Field Poll. But don’t forget that the Legislature’s rating was even worse, at 24-57.

And while the Field Poll won’t release its numbers on the ballot measures until tomorrow, other recent polls have shown the union dues measure and teacher tenure – the two the unions hate the most – doing fairly well. All of which means everyone has an incentive to at least talk, if not cut a deal.

Schwarzenegger called a press conference ostensibly to hit the Democrats for a budget proposal that he says commits one-time revenue to ongoing programs, worsening the state’s fiscal picture in future years. But in a rare moment of contrition, he also said that he takes some of the responsibility for the public’s disdain for everyone in the Capitol.

“It’s very clear that people are basically saying to us, work together, do what you did so well last year, work together to try to solve the problems,” he told reporters.

“All of us in this building can share blame, all of us, including myself. People make mistakes sometimes and I think we learn. This is a very clear message that we must work together. I am looking forward to that.”

Speaker Fabian Núñez offered a similar olive branch.

“If there’s one thing we all need to do, it’s humble ourselves,” Núñez said. “These numbers weren’t good for the governor. But they weren’t good for the Legislature, either.”

And Senate Leader Don Perata:

“People like us least when we don’t work together. They like us best when we are cooperating and solving problems.”

Of course, sometimes Capitol cooperation just leads to fig leafs -- like last year's Prop. 58 -- that are sold as solutions to problems but really don't accomplish much, if anything. But there was plenty of talk Tuesday – for the first time -- of specific counterproposals from the Democrats to the measures Schwarzenegger rolled out in January or later embraced on their way to the ballot.

Speaker Núñez said Assembly Democrats had offered a Prop 98 fix that significantly slowed down the repayment of the general fund “debt” to the schools.

Perata said he had suggested a teacher tenure reform that would require teachers to work four years, rather than the current two or the governor’s proposed five, before gaining permanent status. And in their third and fourth years, teachers who were falling short would get a road map from their principal suggesting how they could improve.

Perata also said that he will be officially rolling out the Senate’s proposed redistricting reform on Wednesday (this was later pushed back to Thursday), and it will be similar to a plan Sen. Alan Lowenthal has been pushing all year.

Perata also said the governor had suggested a blue ribbon commission on public pensions appointed jointly by the governor and the Legislature.

Finally, Perata mentioned that term limits reform remains an active topic of discussion, although he said the Senate's redistricting measure would not be explictly linked to changes in the term limits law.

Who knows? Maybe there will be a unity slate on the November ballot after all.


Posted by dweintraub at 3:33 PM



The future of transportation

Note: I posted this request a few days ago and got a bunch of great responses. I decided to move it back up to the top of the blog to catch folks who might have missed it last time.

The next piece in my California on the Cusp series will focus on transportation. I want to describe and quantify the current condition and capacity of California’s transportation system, look at the coming demand, and explore new and old ideas for dealing with it.

I’d appreciate your help on any and all of these issues.

Some questions that I have:

What are the best statistical indicators of the condition of California’s transportation system?

Can California build its way out of gridlock?

What is the best way to compare the cost and benefit of highways and public transit?

Are there other jurisdictions where roads work noticeably better?

What is the potential for toll roads or congestion pricing to help alleviate traffic?

Is it really about roads, or is about housing and jobs? Would a different kind of development, less centralized, reduce the need for driving and help fix the problem?

email me at dweintraub@sacbee.com

Posted by dweintraub at 7:56 AM



Electricity measure explained

Confused about the energy initiative that just qualified for the ballot? My colleague Carrie Peyton Dahlberg does a great job explaining the issue in today's Bee.

Posted by dweintraub at 7:37 AM



How low can he go?

asapprovalratingsmall.jpg
The Field Poll out this morning shows Schwarzenegger's public approval cratering, down to 37 percent among registered voters (53 percent disapprove); among all adults, 31 percent approve of his performance. In February, his rating was 55-35 positive among voters. It peaked last summer at 65-22.

Among Democrats, Schwarzenegger's rating is 16-76. Among Republicans it is 66-23 (down from a high of 90-5) and among non-partisans and minor party members his rating is 35-54.

Any way you look at it, this is a disastrous way to start a special election campaign that is going to be a referendum on his leadership.

One ray of hope for Schwarzenegger in the Field Poll release is the note that former Gov. Gray Davis, just before he was reelected in 2002, had a job performance rating of just 39-49 and still managed to win. But Davis had the advantage of running against a weak Republican opponent. Schwarzenegger, when his agenda faces voters this fall, will not have an opponent to run against. It's all him.

And what about that plan to make the special a contest between Schwarzenegger and the always unpopular Legislature?

Well, in a vacuum, the Legislature's approval rating is even lower than the governor's, at 24-57. But when asked with whom they would side in a disagreement between the governor and legislative leaders, voters pick the Legislature. 44-33. In January 2004, Schwarzenegger was the favorite on that question, 48-30.

The full poll should be here later this morning.


Posted by dweintraub at 5:34 AM



June 20, 2005

Dueling budgets

Interesting comparison of the out-year effects of the two budget proposals, from the Legislative Analyst's office.

The bottom-line on the governor's budget is here. It shows that if everything in his budget were adopted and worked as planned, and assuming the Legislative Analyst's estimate of revenues for 2006-07, he would be facing a $3.6 billion shortfall next January.

The LAO's analysis of the Democrats' budget plan is here. Using the same assumptions, it projects a 2006-07 shortfall of $6.4 billion.

The difference is about $2.8 billion. But that probably overstates the gap between the two.

If you grant the Democrats' point that two of the governor's major assumptions are unlikely to yield the projected savings -- $400 million from state employee salary and benefit cuts and $469 million from shifting retirement obligations for teachers to the schools -- that adds about $2 billion to the governor's plan this year and next. That additional spending would leave his next budget with a starting point about $5.6 billion in the hole, or only $800 million better off than the Democrats' plan.



Posted by dweintraub at 11:28 AM



June 18, 2005

Westly says he is in for 2006

Controller Steve Westly has officially joined the race for governor. today. Here is the AP story that moved in advance of his announcement.

Posted by dweintraub at 1:46 PM



June 17, 2005

A face for radio

For the past couple of years I have been doing a weekly radio segment on California politics with Eric Hogue on KTKZ 1380 in Sacramento. Next week, Eric is going on vacation, and I'll be subbing for him from 5 a.m. to 9 a.m. Wednesday morning. If you're not in Sacramento, you can listen online here.

Posted by dweintraub at 2:46 PM



Payrolls up 17,600 in May

California payrolls grew by 17,600 in May, and unemployment declined a tick to 5.3 percent, according to the Employment Development Department. Their report is here.

Posted by dweintraub at 1:52 PM



June 16, 2005

Feinstein to back flag amendment

This story in USA Today says Dianne Feinstein is one of five Democrats in the Senate who are prepared to support a constitutional amendment to ban flag burning, which might be enough to put the amendment over the top in Congress. Shame on her. I am among those who believe that if the United States flag stands for anything, it stands for the right of free people to do with it what they please.


Posted by dweintraub at 12:46 PM



Coincidence?

The Alliance for a Better California, the labor-backed coalition opposing Schwarzenegger's policy agenda, is raising questions about the way the governor's favorite ballot measures were certified for the Nov. 8 election. Even though they were not the first ones submitted, they were all certified in time for his special election proclamation, and all were certified in sequence, so that they will be numbered as a block come election time. Meanwhile, the two measures submitted by the labor coalition have yet to officially qualify. I have to admit the same thing occurred to me. The labor group is fingering Bruce McPherson, the governor's appointee as Secretary of State. I don't know about that. But I'd sure be curious to hear an explanation.

Posted by dweintraub at 6:47 AM



June 15, 2005

LAO analysis

Here is a PDF file containing the LAO's quickie (15-page) analysis of the Democratic budget plan and how it differs in key respects from the governor's proposal.

Posted by dweintraub at 4:02 PM



Budget taken up, defeated

The Assembly has completed its first debate and vote on the Democrats' budget proposal. The bill failed on a party-line, 45-32 vote, needing 54 votes for passage. Republicans who voted against the measure complained that it would worsen the state's out-year budget deficit by at least $2 billion. The Senate is scheduled to convene at 5 p.m.

UPDATE: AB 6, the income tax increase proposal, was also defeated, on a vote of 46-32, with 54 votes needed for passage.

Posted by dweintraub at 2:30 PM



Under bad management

The Little Hoover Commission has just released a fairly scathing report on the state workforce, arguing that its performance is dragged down by bad management. The problems could be addressed, the report says, by opening up management openings to more outsiders, improving promotion policies, and offering more training to supervisors. The full report can be found here.

Posted by dweintraub at 9:26 AM



June 14, 2005

My pick for the court

It will never happen, but here is my nominee to replace Janice Rogers Brown on the state Supreme Court: Louis Caldera. West Point graduate. Law and MBA degrees from Harvard. Former deputy LA County Counsel, lawyer in private practice, California state assemblyman, and Secretary of the Army. Caldera has been president of the University of New Mexico since 2003.

Posted by dweintraub at 9:54 AM



The campaign finance effect

In this post, BoiFromTroy notes accurately that one big reason for the special election is the campaign finance law that would limit Schwarzenegger's ability to push his measures if they appeared on the June 2006 ballot when he might be running for reelection. But I also think a major factor in the motivation was the governor's desire to have all the focus on his reform agenda and not have to compete with the candidate election and the other issues that might appear on the June 2006 ballot. Then there is the obvious one: at the time he was planning his strategy, June 2006 was a year and a half away, and he didn't want to wait around that long to get something done.

Posted by dweintraub at 9:39 AM



Catch and release

Don't miss this amazing little story that shows how the public employee unions do business in California. It involves the "release time" that officials in the prison guards union use for union activities. Historically, that time, donated by members from their vacation and holiday time, was limited to 10,000 hours over the life of the contract. This year, the state tried to enforce the limit, saying the union had already exceeded it by more than 100,000 hours. But an arbitrator said no. Why? Because the Gray Davis Administration, in an "off-the-record" negotiation with union leaders that apparently was never reported publicly or cleared by the Legislature, agreed to give up the cap. So now we have an unelected arbitrator telling elected officials that the contract they're working from does not mean what it says because negotiators for a former governor in a secret meeting agreed to look the other way and not enforce the provision. Wonderful.

Posted by dweintraub at 8:26 AM



Special costs

Estimates for the cost of the special election range from about $45 million (state costs alone) to $80 million (counting the costs in jurisdictions that were already planning to hold elections that day). The governor proposed in his declaration that the additional costs be reimbursed by the state in the 2006-07 budget or by a bill passed earlier.

The Department of Finance reports that the last time a governor called a special election (1993) the state reimbursed the counties through special legislation. The bills submitted and paid for the local governments' costs: $4.8 million.

Posted by dweintraub at 7:50 AM



Half of uninsured are immigrants

A new study says that half the uninsured in California are immigrants, primarily because they tend to work in low-wage jobs where employers do not provide coverage.

Posted by dweintraub at 7:39 AM



June 13, 2005

Special election Nov. 8

Gov. Schwarzenegger has officially signed the declaration calling a special election for Nov. 8. Here is the text of his address to the state, as prepared for delivery.

And here is one response, from Senate Leader Don Perata.

Posted by dweintraub at 4:48 PM



Sorry, gov

Live by Hollywood, die by Hollywood.

Michael Jackson steals Schwarzenegger's thunder and headline space by getting himself acquitted on charges of child molestation, false imprisonment and lesser charges.

Posted by dweintraub at 2:18 PM



A demographic dividend

demodividend.gif

This is a graphic that accompanied my Sunday column, the second installment in my California on the Cusp series on the future of the state. It shows the flattening of the projected growth in school enrollments, which should make it much easier over the next decade to increase the dollars per pupil the state spends on public education. The trend and the implications are clear, but for some reason no one in the Capitol is talking about it.

If the economy grows at 3 percent a year and the state simply spends the same percentage of economic output on the schools 10 years from now that it does today, per pupil spending would climb by 25 percent, or $1,800 per student. That's about $11 billion, a number that dwarfs the $2 billion to $3 billion at the center of the debate that has gripped policymakers this year.

The point of my piece is to explore what the schools should do with that new money, if and when it comes. My conclusion is that it no longer makes sense in a diverse state of 36 million and growing to try to answer that question in Sacramento. Stick with statewide standards and accountability but then smash the state education code and bureaucracy and free local communities, teachers, and parents to innovate in search of the best way to meet those goals.

Posted by dweintraub at 9:29 AM



A very special election

At a Commonwealth Club panel the other day, government regulation advocate Harvey Rosenfield accused Schwarzenegger of an "abuse of executive power" in calling for a Nov. 8 special election.

"Never before, to our knowledge, has a sitting governor invoked his constitutional authority to call a special election when the only purpose of the election is the enactment of his own ballot measures,'' Rosenfield said.

Wait. Wasn't the 1911 election called by Gov. Hiram Johnson for a vote on the recall, the referendum and the initiative -- the birth of direct democracy in California -- just such an event?

Posted by dweintraub at 9:09 AM



June 12, 2005

The way back machine

With the governor scheduled to go on statewide TV tonight, I thought it might be fun to take a trip down memory lane, all the way back to the last time a Republican governor used a statewide broadcast to take on the Legislature's Democrat majority. Below is the top of the story I wrote the night Pete Wilson used the same tool to warn against raising taxes and deficit spending. I wonder if Schwarzenegger will also gather his aides and cabinet secretaries for a party to celebrate his toughness. A Wilson aide complained that it was a "cheap shot" for me to mention in my story that they were drinking wine and beer in the courtyard as he spoke. Of course, that was the least of their problems. Wilson lost the budget battle and then saw his slate of candidates and ballot measures defeated at the polls that November. Will Schwarzenegger fare any better?

Note that Wilson that year was proposing to spend $40 billion in the general fund. That would be about $55 billion in today's dollars. Schwarzenegger's general fund budget proposal for next year: $88.5 billion.

From the Los Angeles Times

DANIEL M. WEINTRAUB

TIMES STAFF WRITER

26 June 1992

Seeking to rally public support for deep cuts in state spending, Gov. Pete Wilson went on statewide television Thursday to warn that the Democrats who control the Legislature are prescribing a "double disaster" for California.

Wilson said Democratic proposals to raise taxes and stretch repayment of the state deficit over two years would be "big mistakes" that would commit the state to "ruinous deficit spending" for years to come.

"So I want to make clear tonight for them and for all who hear me: We can't let them do that to California," Wilson said. "And I'm not going to let them do that to you."

Wilson spoke from his Capitol office five days before the start of the new fiscal year, when, if a new budget is not in place, the state will run out of cash and begin to issue registered warrants, or IOUs, to pay its bills.

Wilson's hard line angered Democrats, who chastised him for making partisan speeches rather than working to find common ground with legislators to save the state from fiscal chaos.

"The governor is supposed to lead, find solutions, compromise, not pontificate," said Democratic Assemblyman John Vasconcellos of Santa Clara, chairman of the Assembly Ways and Means Committee. "He's really abdicated the role of governor. That's the saddest thing-he's not acted in a way that is bringing about any effort to solve this."

As members of his Cabinet and Republican lawmakers sipped wine, beer and soda and watched the speech on a big-screen television in Wilson's office courtyard, the governor said the budget must be balanced in one year without raising taxes, even if it means painful cuts for the poor, the sick and public schools.

The speech, according to Wilson aides, was designed to show Democratic lawmakers that Wilson, unlike a year ago, means it when he says he will not yield to the Legislature's majority party. Wilson drove home that point after the address by telling reporters that he would be willing to go to the November elections without a budget rather than agree to raise taxes and roll over the deficit.

"I would rather do that (wait until November) than take this terrible misstep from which the state would never recover," Wilson said.

Wilson has proposed 15% cuts in health and welfare programs, including a 10% to 25% reduction in aid to poor mothers and their children. His Administration has said a 15% cut in health services could mean, among other things, forcing invalids out of nursing homes after eight months and eliminating state-paid medical care for the working poor whose catastrophic illnesses threaten to bankrupt them.

The governor also wants to cut about $200 per student-or 4.5%-from public schools and raise university fees while cutting the higher education budget by 11%.

"Just as you've had to cut back, state government must cut back," Wilson told his television audience. . "It must make deep spending cuts if we are to restore California to the economic health and stability that we have known in the past.

"Some legislators just don't get it. Californians aren't taxed too little, state government is spending too much."

The state will spend about $44 billion from its general fund this year and Wilson has proposed spending about $40 billion next year.

Posted by dweintraub at 3:04 PM



The Issue

With the governor poised to call a special election Monday for Nov. 8, the California Teachers Assn. has voted to levy a surcharge on members to raise $50 million to fight his policies. And the prison guards are voting on a plan to raise $18 million from their members through 2006. It's becoming more apparent every day that The Issue in the fall election will be Arnold Schwarzenegger versus the public employee unions.

Posted by dweintraub at 8:24 AM



June 11, 2005

Smart move

As a political strategy, the Democrats' decision to separate their proposed increase in education spending from the rest of the budget makes sense. It's also a responsible approach, despite Republican huffing and puffing to the contrary. Although there are still some differences over the main budget plan, the Democrats should be able to reach agreement with the Republicans and Gov. Schwarzenegger fairly quickly, everyone willing. The Democrats can then hammer away on their education proposal without holding up the budget. That debate will clarify for the public that the Democrats want to spend more on education and raise taxes to pay for it, while the Republicans, presumably, are happy with the $3 billion increase for schools in the governor's budget and taxes at their current level. This strategy also leaves open the possibility that the Democrats and the govenor will decide to put the tax increase on the ballot Nov. 8 and let the voters decide.

Posted by dweintraub at 8:19 AM



Dealing drugs

The more I watch politics, the more I am convinced there are basically two kinds of politicians in the world. There are those who see their job as forcing others to do things (for their own good or the good of others, of course). And there are those who see thier jobs as freeing people to do things for themselves.

I am afraid Assemblyman Lloyd Levine falls into the first category. I agree with much of what he says in this press release about his bill to prohibit pharmacists from refusing to dispense drugs for religious or moral reasons, but I still don't like the bill. Just as I do not think it is right for the state to tell a woman that she cannot use birth control or get an abortion, I don't think it's right for the state, as part of its licensing process, to tell a private individual or business person that they must dispense certain drugs. Nor do I think that the state should tell doctors that they must perform certain surgeries. I do, however, support the right of a pharmacy to fire an employee who refuses to dispense the drugs in question, if that is part of their job.

Funny thing about this bill. It prohibits citing a moral or religious objection to justify the refusal to sell birth control pills. But what about a business objection? I don't think it would be practical for the law to require every pharmacist to sell every kind of drug on the market. Most pharmacists pick and choose already. So what do we do if a pharmacist says, "Hey, I've got no moral objection to these drugs, but selling them just isn't part of my business plan." What then?

Posted by dweintraub at 8:05 AM



June 10, 2005

Two more ballot measures ok'd

The Secretary of State's office will be announcing this afternoon that the remaining two measures endorsed by the governor -- to reform the budget process and redistricting -- have qualified for the ballot.

Posted by dweintraub at 1:45 PM



Single payer fans, take note

The Canadian Supreme Court has struck down a Quebec law banning private health insurance. The court noted that Canadians have died waiting for care and, according to the LA Times, said:

"In the case of certain surgical procedures, the delays that are the necessary result of waiting lists increase the patient's risk of mortality or the risk that his or her injuries will become irreparable. Many patients on non-urgent waiting lists are in pain and cannot fully enjoy any real quality of life. The right to life and to personal inviolability is therefore affected by the waiting times."

Posted by dweintraub at 9:39 AM



June 9, 2005

The OC

Other than the anonymously sourced OCBlog, Jon Fleischman has the best inside dope on what is happening the potential race to succeed Rep. Chris Cox if he is confirmed as the next SEC Chairman. The only problem is that Fleischman's free newsletter isn't posted on the net. So once again I am going to archive it here for those of you who are interested in that race. His latest missive focuses on why Sen. John Campbell of Irvine withdrew his endorsement of Senate Republican Leader Dick Ackerman and is now talking about running for the seat himself. Also, further insights on the future of the minority party's leadership in the Senate. Fleischman assures me he will soon start a blog that will make linking to his material much easier. I hope so.

Posted by dweintraub at 10:21 AM



Surprise!

It's been the worst-kept secret in Sacramento for weeks (months?), but now it's not even that. Gov. Arnold Schwarzenegger confirmed last night that he will call a special election for this November and will issue the proclamation on Monday. He let the very obvious cat out the bag during informal comments to cartoonists from around the nation gathered in Sacramento for their annual convention.

Posted by dweintraub at 8:18 AM



Hear no evil

This story is a sickening testament to what our public universities have become. An acclaimed (and minority) author is pressured to withdraw as commencement speaker because some of his views on assimilation are offensive to students and faculty.

Posted by dweintraub at 8:14 AM



June 8, 2005

United they stand

As if he didn't have enough trouble with the public employee unions, Schwarzenegger is now taking heat from the Screen Actors Guild for using non-union actors in a recent commercial. Variety has the story here. Hat tip: ArnoldWatch.org.

Posted by dweintraub at 5:02 PM



You can't go home again...

Next Tuesday, the gov is planning to give the commencement speech at his alma mater, Santa Monica Community College. The lively left is rounding up its troops for what we hear will be a massive protest, a credible threat since this is one of the few Schwarzenegger events lately that has been widely advertised weeks in advance. Here's the latest on the huff from AP.

Posted by dweintraub at 4:50 PM



Universal preschool, rebuttal

The other day I flagged this op-ed piece from the LA Times as a good critique of Rob Reiner's universal preschool proposal. Now Preschool California has posted this point-by-point rebuttal on their site. Take a look at both if you want an early look at how this campaign might shape up.

Posted by dweintraub at 4:37 PM



June 7, 2005

Blogs and pols don't mix well

Sen. John Campbell has been promising a bold new blog for a few weeks now. Today, he unveiled it. His first item was a stunner: it's going to be tough to get a budget passed this year. Let's hope his juicy insights from inside the belly of the beast get a little juicier from here on out. But that might not be possible. Other than the possible exception of Oakland Mayor Jerry Brown, I have yet to see a politician's blog that reads like anything more than an online press release or op-ed piece. Senator: think short and snappy, pithy, spontaneous. Surprise us.

Posted by dweintraub at 3:09 PM



Ballot update

The unions dues initiative and the governor's teacher tenure reform have qualified for the next ballot, whenever it is. To update your scorecard, that brings us to three measures qualified and five pending:

Qualified:
Union dues. Require public employee unions to get positive consent from their members before the government will deduct political money from members' wages.

Tenure. Increase from two years to five the time a teacher must work on probation before gaining permanent status. The measure would also make it easier for school districts to let go of permanent teachers who are given poor job evaluations.

Abortion. Requires teens to get the consent of their parent or a court before getting an abortion.

Pending:

Remap. Shifts power to draw political boundaries from the Legislature to an independent panel of retired judges.

Budget. Sets spending limit based on past revenues, gives governor power to reduce spending in mid-year to prevent deficits, alters Prop. 98 education funding formula.

Prescription drugs -- labor measure. Seeks to use the power of the state's Medi-Cal program to drive down drug costs for the working poor and seniors.

Prescription drugs -- industry version. Creates a voluntary prescription drug discount program for the working poor.

Energy. Prohibits expansion of private retail selling and purchase of electricity outside the regulated monopoly utility system.

Posted by dweintraub at 6:30 AM



June 6, 2005

Universal preschool

This is the most sensible thing I've read on Rob Reiner's universal preschool proposal.

Posted by dweintraub at 2:29 PM



Nursing shortage

There's been a lot of debate lately about whether California actually has a nursing shortage or will in the future. Here (in PDF form) is a UCSF study that says there's a shortage now and it will get worse.

Posted by dweintraub at 2:27 PM



Pod people

I am not sure I would want to listen to the governor on my Ipod, but you can if you want to. His Saturday radio speech was the first for which his office used the new "Podcasting" technology that allows listeners to automatically download digital material to their personal players. You can read about the technology and how the governor is using it at his state Web site, here.

Posted by dweintraub at 9:10 AM



Taxing the rich

In his Golden State column today, the LA Times' Michael Hiltzik takes me to task for this blog item on the weaker than expected returns from former Gov. Pete Wilson's 1991 tax hike on upper-income Californians. Hiltzik complains that I didn't also analyze the effect of the Reagan income tax increase from an earlier era. Fair enough. But he also suggests that my analysis is part of a rigid ideological conspiracy to protect the rich from higher taxes. Guess he didn't see this column. My skepticism is more practical than ideological. I just think it's wise to consider the consequences of depending too much on one tiny segment of the population to fund government, and I don't think it would be prudent to spend projected higher revenues from that source before you have the money in hand.

Posted by dweintraub at 7:23 AM



June 5, 2005

Five-buck Jacques?

Another story from Europe, this one about how the French wine industry is struggling because it refuses to compete (on price) in a global market. Vintners are rioting because the government won't pay them more to destroy their stocks. Read it here.

Posted by dweintraub at 10:08 PM



With friends like this...

This LA Times story doesn't contain any particularly shocking revelations. It informs us, for example, that the governor intends to make public employees issue number one this year. But the way the piece goes about it is eye-popping. One of Schwarzenegger's major donors gave reporter Bob Salladay access to a private conference call a group of donors had with the governor's political team. I guess it's a credit to the players -- or a minor miracle -- that nothing racier came out of it. You have to scratch your head a little and wonder why someone who likes the gov's agenda enough to give big bucks would turn around and let a scribe listen in on the chat, with all the risk that entails.

Posted by dweintraub at 10:01 PM



Fiscal fun

The Bee reports that Assembly Speaker Núñez has drawn a line in the sand, insisting that the Democrats will not vote for a budget that doesn't include an additional $3.1 billion in spending for the schools, presumably paid for by raising taxes on upper-income Californians. Who would have imagined that the budget deadlock would come down to one party demanding that the state -- still facing a $6 billion structural gap between revenues and spending -- give a 10-percent-plus increase to the biggest program in the budget?

Posted by dweintraub at 9:55 PM



June 2, 2005

Feds deny ethanol waiver

Sen. Feinstein reports that the U.S. EPA has once again rejected California's request for a waiver from the federal ethanol mandate. Strange that you have Democrats from this eco-friendly state demanding flexibility and a Republican administration refusing to grant it.

Posted by dweintraub at 11:40 AM



The race to succeed Chris Cox

Want an insider's view of the race to succeed Rep. Chris Cox of Orange County, who will be nominated by Bush to be head of the SEC? Jon Fleischman has been in and around Orange County politics forever, and he's cranked out a quick rundown of everybody's prospects, beginning with the scoop that Senate Republican Leader Dick Ackerman is running. Whoever wins, it will likely set off a further chain of political musical chairs in that area. Unfortunately Fleischman has no Web site. But you can download his take from my archive here.

Posted by dweintraub at 10:38 AM



Gov hits tax plans in new ad

Hoping to capitalize on news reports about the Democrats' latest tax plan, Schwarzenegger's campaign team is rolling out an ad that hits the opposition for trying to raise taxes and ends with a pitch for the governor's budget reform measure. You can view the ad at Schwarzenegger's campaign web site, here.

Posted by dweintraub at 10:05 AM



Paying passengers to fly?

If you like Southwest Airlines, you'll love Ryanair. This article profiles the airline and its no-bull CEO, and in the process says much about the new economy -- and consumer empowerment. I am sure there are plenty of you out there who will read this and see the downfall of civilization on the horizon. But I think it's the future, and I think it's great.

Posted by dweintraub at 7:53 AM



June 1, 2005

Are the Dems now breaking a promise?

One thing the Assembly Democrats tried to downplay in Tuesday's announcement was the effect that raising taxes on the rich would have on Prop. 98. Wouldn't that new revenue (about $2 billion a year) nudge the Prop. 98 minimum even higher, and if so, are the Democrats planning on paying that new minimum? Or do they have a plan for raising the tax and somehow keeping that new money from being counted toward the 98 formulas? Remember, they say that given today's revenue numbers, the schools are owed an additional $3.1 billion. So if revenues go even higher, it seems that the amount owed would grow as well.

Indeed, the folks at the legislative analyst are estimating that the tax-the-rich proposal would add another $1 billion to the guarantee in 05-06, on top of the $3.1 billion ($1.9 billion this year, $1.2 billion next year) that the education lobby says the governor promised them. No doubt the schools would be thrilled just to get the $3.1 billion ($6 billion total in new money) and wouldn't demand even more. But now it's the Democrats who have to figure a way around the rigidity of the strict spending formula they love to worship.

Posted by dweintraub at 5:06 PM



Projections

At our editorial board briefing with the Speaker on Tuesday, I asked what would happen if they raised the income tax and the money they are counting on (about $2 billion) didn’t come in as projected. I said that’s what happened in 1991 when Pete Wilson tried the same thing. Núñez and his staff countered that my question was based on Republican spin – not facts. The money they're projecting would come in, they assured us. Well, here are the facts.

The Wilson rates were adopted in July, 1991. The entire increase in the personal income tax was projected to net $2.3 billion in the first year, including $1.1 billion from the increase in the upper-income rates. That money was, of course, booked in the budget and spent. But it never arrived. The result was another deficit the following year. In fact, the growth in personal income tax revenues over the next three years was the second slowest, on a percentage basis, for any three-year period in the second half of the 20th Century. (The slowest was the period starting one year earlier and ending with the first year of the Wilson tax hike.)

Here are the numbers for the personal income tax just before and after the Wilson tax increase, according to the Legislative Analyst. The year noted is for the fiscal year ending June 30 of that year.

1991 $16.9 billion
1992 $17.2 billion
1993 $17.2 billion
1994 $17.6 billion

It wasn’t until the 1994-95 fiscal year that the personal income tax as a revenue source finally began to grow again. In that year, it produced $18.5 billion. Then the higher rates, which were adopted as a temporary measure, expired. Here is what happened after that:

1995 $18.5 billion
1996 $20.9 billion
1997 $23.3 billion
1998 $27.9 billion
1999 $30.9 billion
2000 $39.6 billion
2001 $44.6 billion

The growth in the latter years reflects the incredible surge in capital gains taxes paid by those whose incomes benefited from the dot-com surge. Another factor: many taxpayers shifted their income reporting from the corporate tax to the personal income tax after changes in law expanding that option for owners of closely held businesses. But the fact remains, the Wilson tax hike never really produced the money it was projected to bring in – until it expired. This is, of course, exactly what the much maligned "supply-side" theory on taxation would predict. But that's another story.

The point for now is that it would be dangerous for the state to raise this tax and immediately spend the money it is projected to bring in. If the tax is increased, it would be far more prudent to dedicate the money in the first year to debt repayment or some other object that would not result in growing government beyond the tax system’s capacity to pay for it.

Note: the Legislative Analyst’s history of state revenues can be found here.


Posted by dweintraub at 8:20 AM



 
 

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