The California State Budget: Structural Problems and Real Impacts on People

Finally, even Governor Schwarzenegger, while he will blue pencil (reduce or eliminate) some of the funding in this budget before he signs it, says that the budget is a fine one and that he does not want further cutting in education. He issued a statement on Friday, as follows:

"The budget passed by the Assembly is a budget the people of California can be proud of. It takes the operating deficit down to $700 million - and more after I use my blue pencil authority. The legislature has done a magnificent job through these tough negotiations by getting the deficit down from the May Revision. This budget moves the reserve up to $3.4 billion and makes tremendous investments in law enforcement and education.

"Bringing the operating deficit to zero this year would mean a cut to the education budget. The question now is whether we cut education funding and I don't think that's what the people of California want. I will not cut education."

It also bears repeating that the budget presented to the Senate was one passed with Republican votes in the Assembly. Three out of four of the "Big Four" (leaders of both parties in both houses) were in agreement. Add the Governor in, for the "Big Five" and four out of five were in agreement.

The Democrats Laid Out Their Plan and the Republicans Preferred Negotiating in Private and Were Evasive of the Cuts They Wanted

Why the secrecy? Is this any way to conduct the people's business?

You could see this coming from at least a month ago on June 15, the date that the budget, according to the California Constitution was supposed to have been passed. On that date, Republican Assembly leader Mike Villines spoke to the Sacramento Press Club and we reported on his remarks in What is Really Going On in the California Budget Negotiations? Referencing the budget and the date, he started out with: "It's not going to happen, big surprise!"

But then there was this telling passage in his response to a question from KQED's John Myers, who is President of the Club:

Q. "Can you talk about in that $1.2billion? Are there particular areas--policy issues--most precisely that you all disagree with? Some of it was Calworks issues; some of it was other things. From a policy perspective….

Villines: A. For me it's not a policy issue, it's just a spending issue at this point. If there's a $1.2 billion that went in, then $1.2 billion has got to come out somewhere. That's not our job to come up with, I think that's our colleagues job on the other side to say, if you're spending more than we are bringing in, where you want to make some changes. For me, I'm willing to discuss in any way, shape, or fashion where Mr. Laird or the Speaker wishes to discuss that, but we can't spend more than we make. Period. So that's their job to come back. I'm agnostic to where we to do it at." [Emphasis added]

So a month ago, the Assembly Republican leader was declining to talk in public about what the cuts are that they wanted. Then while the conference committee publicly met and eventually reported out a bill, behind closed door meetings were taking place with the legislative leaders because of the difficulty of getting a two-thirds vote in each house.

Then the media began picking up on the secret plan of Republicans which they refused to reveal to the public. The San Diego Union reported that: "Democrats complain that Republicans have not identified $2 billion worth of cuts. Republicans say they have privately given Democrats a $2 billion list of cuts that would not reduce funding for schools." [My emphasis]

And the Sacramento Bee editorialized, "GOP dodge ball: Time for Republicans to offer detail on cuts."

Last Wednesday, I asked Assembly Republican Leader Villines in the hallway of the Capitol about the secrecy:

Q. "What’s the rationale behind doing things in private as opposed to public?

Ackerman: A. "Well, you know, any budget that we vote on is going to be done in public, it’s going to be a public document, it’s going to be debated on the floor, it’s going to be a very public document that we get to. In terms of negotiating, I think that what we’ve got to do is to find out where we are willing to go as caucuses, and what is the responsible way to get there, and once you have hat, you’ve got to go public with that, and that’s what we’re trying to do.

Q. I’ve always wondered about that because you have the budget conference committee as public, committees are all public now, there’re out there for everybody to see. And yet people disappear into caucuses and and they’re gone for an hour at a time or longer. If you did that in local government, you’d be violating the Brown Act, I believe, in most cases.

A. I’m not sure about local government, but I know this. In terms of conference committee and other places, Republicans don’t have an equal stake in the outcome. But in terms of the overall budget, and the requirement, we do have a bigger stake. And that’s why, unfortunately, the way the system is, is that the negotiations we’re able to have a bigger part in, frankly, are after conference committee. If Republicans wee running the conference committee, you would have seen it down to a number that we want it to be at now. But we don’t. And so, and I say that in the sense of, you know, humility. We want to work together to get this done. Conference committee doesn’t give us that opportunity, frankly.

Last Thursday, in a walk in the Capitol Park, I was able to ask Senator Ackerman why there was this penchant for secrecy:

Q. "Why does this have to be done in private? Why can't it be done in public? We have public hearings with the conference committee and a lot of other committee hearings. Is there some chemistry that makes it work in private?

A. No, I think unfortunately, for whatever reason, it used to be that budgets were mainly done by the budget committee, so it was all in public, and only when you got to the end and you had some differences that the governor would get involved or the leadership would get involved. And of late, it's been a little different, although you look at the budget. The budget's a $104, a $105 billion general fund--a $140 or 50 total and we're talking about 2 billion bucks right now at our meetings, so if you look, that's what--not even one percent--half or three quarters of one percent of the budget. So most of the budget was done in public, most of the budget is already decided. It's just the last couple of billion, we're still talking about.

Q. By the time this is done, there's not going to be much that anybody can do to undo it's already going to be a fait accompli with the votes already lined up. The public doesn't then get an input into the final product. They've had an input up til now.

A. I would, if we can figure out a way to get it all done through the budget committee, that's a better way to go. Unfortunately, we got away from that a number of years ago and I'd just assume go back to the old way--it's fine. You're always going to have some differences. I thin historically, back in the old days, the Assembly would have a budget, the Senate would have a budget, then they'd have a conference committee which actually tried to resolve their differences and if they couldn't then they might get leadership involved. So, I'm not a historian, but I think since Deukmejian or so they've used the Big 5 or Big 4 to solve the last few things, so--I'm not saying it's right or wrong, it's just the way it works."

So, there's the official public process where the public gets to see what is talked about and the positions our elected officials are taking. This is the way the rules read: Committee hearings where there is a record and we can weigh in with our electeds, and any proposals coming up for a vote are on the table for the public to see, in advance, and that is being circumvented. The Republicans, it would seem wanted the Democrats to do their dirty work--make the cuts--and did not want to be responsible to the public for decisions made.

What Does This Say About the Democratic Process?

The root of the problem here is a structural one--in the California Constitution courtesy of Prop 13. The requirement of a two-thirds vote in both houses doesn't work the will of the people--unless we don't want to have a state that is governable. We are joined by only two other states in the super majority needed to pass a state budget--even though the Governor under our Constitution has the right and the ability to reduce any item of the budget up to an including zero.

We are taught as school children that democracy is rule of the majority. There are, however, certain areas where a super majority is required to protect the rights of the minority. Amending the U.S. Constitution, for instance takes a larger majority. Unfortunately, passing a basic spending plan for the state is one of them. That creates a lot of room for mischief.

We also are led to believe that elections have consequences and that if we don't like what our leaders have done, we can vote them out of office. But that is a pretty hollow right when a small group of legislators from a few districts in California can block a state budget. Given the makeup of the districts they represent, they can vote in the most troglodyte fashion--bring government close to cessation, and probably not face reprisals from their electorate. It's so bad that we reported a year ago on July 3, 2006 we reported that, Some Republican Legislators Have Never Voted for a California Budget, and this is still, unfortunately, true.

It doesn't matter that the majority--the vast majority of the state voted for the Democrats in the last election. It also doesn't matter that they elected Governor Schwarzenegger, a Republican who doesn't go lockstep with their ultimatums. The public and the electorate of the state as a whole be damned.

It also doesn't matter what the public opinion polls tell us. We've reported on the findngs of the Public Policy Institute of California (PPIC), a non partisan, non profit organization considered one of the premier polling outfits in the state. See our articles on January 28, 2007: Californians Want Their State Government to Spend More Money and Provide More Services, According to Poll and another on May 31, 2007: Californians Want Higher Taxes and More Services and Other Findings of PPIC Poll State Revenues and Budget.

What Does History Tell Us? This is Déjà vu All Over Again

It is very interesting that some of the same battles occurred during last year's budget deliberations. With the constraints of mandated payments under various ballot propositions and laws that leave no room for discretion, there was a failed attempt last year to cut benefits to the elderly and disabled and there also was a dispute on public transit.

Extraneous matters, such as a tax cut made their way into the budget deliberations at the last minute, as we reported on June 14, 2006 in Taxes and the California Budget: The “Roach Motel” Effect this was part of a last minute, poorly drafted amendment by Republicans that could not stand the light of day, as we pointed out in Observations on Passage of the California State Budget:

"Republicans tried to spring an amendment on the floor to SB 1138, one of the trailer bills, to include a “sales tax holiday” on disaster items purchased for a ten day period later in the year they dubbed “the disaster season.” This amendment, which was “laid on the table” and squelched by the Democrats, had not appeared in print, and might be interesting to read when it can be obtained."

So, this year's budget impasse didn't just happen. There are structural problems. Perata wasn't talking privately to one Republican Senator in the middle of Friday's and Saturday's night about trains in a trailer bill. The botched tax credit-giveaway, even with a tight budget and while railing against deficits that would only be exacerbated by it, is becoming almost a last minute secrective budget tradition.

You know there's a problem when the leader of the majority party in the Senate has to tell the minority party to draft a budget. There's a reason why a small band of 15 State Senators can refuse to negotiate in the light of day and sign a suicide pact to not vote for the budget unless a majority of them agree. The rules need to be changed to protect the majority of Californians from this dysfunction.

For more articles on what has happened this year and last on the state budget, click here.

We'll have more after we catch up on our sleep.