John Chiang, California’s Controller, Treated as a Rock Star in Oakland Before He Leaves to Speak at Democratic National Convention

“When I ran for office, I said I wanted to get California’s fiscal house in order. We need to get America as it is so very blessed by the opportunities that have been given to successive generations. And I wanted to make sure that our generation did not stop that path of great progress and opportunity that is fundamental and core to the American dream.

And part of that responsibility and one that I want to capture for the Democrats and for the Democrats to lead on is a financial message. We’ve been doing things such as promoting offshore oil drilling, promoting companies that haven’t had America’s and California’s best interests at heart. So, my first year and a half I have been trying to fix the financial problems here in California.

For instance, the Bush Administration protects through their Interior Department the oil and mining companies. Those oil and mining royalties here in California are supposed to go into the state coffers to help education and over the years gradually they’ve been reducing the amount of money to the Controller’s office for us to audit the oil and mineral companies. And while these prices as we all well know of gasoline—petrochemicals—are going through the roof, the revenues coming back to the state have not been going through the roof. And that’s because we are not able to go out and see how much they are actually using of California’s precious resources.

So I wanted to make a stand and I sued the Department of the Interior, the mining industry, and I’m very pleased to say that we sued and we won. It’s clear that we had no money coming into the educational treasury to get those moneys to come back to work for the hard working teachers of California. Most of the teachers hired in the state of California are female. A great percentage of them are unmarried. Not enough to strictly live on. And so that’s why it is critical that we get every single one of those dollars in. Frankly, that ought to have an appeal, not just to Democrats but to the rest of California. If we are making wise use of our natural resources here in California, we don’t have to go back to additional taxes because we are giving benefits to oil and mining companies. We don’t have to ask you for additional monies.

And then, another thing. I want to create financial transparency and accountability. When people play in Sacramento games with your money, and they manipulate those numbers. And frankly, democracy is ill served when you don’t understand what is really going on.

If you go to my website, I have on the 10th of every month… we disclose the cash position of the State of California. You get the information the same time the legislators do. Dan Walters from the Sacramento Bee said if you want an honest place in government about California’s fiscal status, you go to the Controller’s office. So we’ve turned that around in the last year and a half to make sure we are upright, we are straightforward.

Because I trust the people of California. If you want a democracy to work, you don’t do what President Bush has done where you assert unconstitutional executive authority where you step on the domain of other people. That’s how you have a poorly functioning democratic society. And frankly that is consistent unfortunately with what this Governor has done with the minimum wage.

There is an appropriate checks and balance system. We each have our own responsibility. The Governor, under the California Constitution, does not get to pay warrants—he doesn’t even have the statutory authority. California’s Constitution says, the authority to pay warrants resides in the Controller’s office. And the individual responsible for running the payroll system is the Controller.

I don’t get to sign the bills. I didn’t run for governor. The Governor didn’t run for Controller. So, I let him do his job. He ought to let me do my job.

Now the Governor--and I appreciate his concern about the cash position--the Governor’s office, the Treasurer’s office, and my office have started an unprecedented effort to work together as California’s financial team. And by the way, for those of you who know Bill Lockyer, I want you to thank Bill Lockyer for me. When you have a battle and go up against the most powerful person in California--and he’s not just a mere mortal like I am, this is a guy with world wide fame—so you’re taking on the presumption I have to overcome, because people give Arnold the benefit of the doubt because they know Arnold. They don’t know John. Who’s John and what’s he doing, and why is he challenging Arnold?

I’m not challenging Arnold. He’s challenging me on my turf. And frankly, we were the ones who were upfront and honest about it. When they approached us a year ago, we said, “We think this is wrong.”

First of all, it sends the wrong message to New York. We are the lowest credit rated state in the United States of America. Despite everything that Bill [Lockyer, California’s Treasurer] is doing, he’s doing a great job as the state’s banker, when we started our term, we were the second lowest. Now we didn’t fall, but Louisiana came up and they tied us. And so today we are the lowest credit rated state. And we don’t want to show any further disruption with the fiscal situation here in California.

So we say, the taxpayers in California would be poorly served if you went forward with this action. Especially since, and you are lawyers, you are sensitive to this, we’re not sure how the court is going to rule on this. Because the court case in White said this: Under federal law we are required to pay at least the minimum wage. So it’s an open question. The Governor has interpreted this to pay only the minimum wage. My question to his staffers--why would you interpret at least minimum wage to be only minimum wage? OK, legal right, legal issue.

And I said second, as a policy matter, how can you not exercise the sensitivity and compassion of the 200,000 plus public servants. Every day they help make California move. Whether it is the engineers, whether it’s the doctors, whether it’s the health care workers, whether it’s the teachers, whether it’s the people working at the DMV, why would you hurt people who every day are trying to do right by the people of California?

You have to have a bigger and better sense of who we are as a people. We’re part of a California family. And one of the things that we as a party and Barack Obama pulse on is that if we are going to be strong in the future, we only will be strong if we are working together and at our very best.

Because we understand the global situation. It’s going to be very challenging, just demographically. China has a 1.3 billion, India has a billion. We have 300 million. They have a boatload of money. The best investment opportunities I have tried to get for the state teachers and the public employees aren’t going to come to us first anymore. When they can go to China and say, “Oh, you’ve got five times as much money as CALPERS does.” You’re going to find somebody who can give more money. So we have to be smarter and better. Frankly we have to put our people together.

And so, the dirt politics of division and exclusion are the wrong politics for America of this generation and the future.

And so I was telling the Governor, I will support you; I will stand strong with you, and be behind you if you do the right thing. I believe the Governor has taken the wrong path where he’s left the most vulnerable people behind in this state. And part of this for Democrats is that we just can’t talk about change—we have to effectuate real change.

Like when I was talking about earlier—when I was at the Board of Equalization, I was the first board member to do free taxes. That’s just my background, after I graduated from Georgetown Law, I went to work at the Internal Revenue Service. I saw all those vulnerable populations that people left behind and didn’t think about at the highest levels of office. That’s why I said in my office I wanted to make sure that everybody could get all that they could get. I had people in my office yesterday getting free tax assistance—homeowners and renters assistance.

We left nearly a billion dollars behind with the federal government because of financial mistakes made by people who do not have the best financial education. And so that’s part of the generation that I’m trying to create where we’re in communities, deep in communities, but more importantly deep in people’s hearts trying to effectuate change to empower them and to build a quality of life that brings justice, fairness, and dignity into their daily existence.

And so, this battle is going to persist with the Governor. I’m hoping that he will do the right thing. I think he’s just incredibly frustrated and I’m sensitive to his frustration. You understand that when you have a difficult budget impasse, and I give him credit now for being more actively engaged—but that process needed to start earlier. And he just need to work every day as the governor. That’s 365 days a year. You’ve got to build the relationships with everybody and say, “Hey, I really need your help. I want you to build that relationship where you trust me and we can do the right thing.

Bill Lockyer and others used to talk about how Pete Wilson, Jim Brulte, Lockyer, or John Burton would sit together. What do you want, what’s your bottom line, and how can we come to resolution where you can come to a compromise without hurting you with your political base.

And frankly, this will be done. But this should not have been done as long as it has taken. And part of that is the responsibility of the leadership to make sure that this responsibility is engaged in earlier during the fiscal year, earlier in the discussion, and not where it impacts other people.

Because I do not know if you guys track it—when you have no budget in place--community colleges, a lot of their money is not being paid out. So I’ve visited some community colleges and you can see the strain on the loss of programs, the tensions between teachers and administrators about how to spend money. That shouldn’t be happening. Community colleges should get their money.

Categorical spending for education—the who most need it, special education programs—aren’t being funded during the summer when there’s no budget in place.

Medi-Cal—the first $2 billion get paid out and unfortunately those $2 billion are supposed to last through the end of August—but because of increasing health care costs, all those monies were used by July 24th of this year. So you hear about health care facilities no longer providing transportation for seniors who need access to get the health care they need.

So that’s what’s happening. That’s just short examples of who’s getting impacted by this budget.

The Governor called me a non- team player yesterday. I responded by saying I would be glad to join the Governor’s team if and when he chooses to do the right thing. Until then, as always, I will be on the California team, making sure that we fight and defend and lift and empower the people who truly need that assistance.”

I say, “Amen” to a dedicated public servant who sees the big picture and the little details an strives to do his job by his lights every day. We are lucky to have John Chiang as our State Controller. May the country get to know him as well.