Reform: California's Budget "Plan"

For months, the Governator has been the Bloviator, blathering ad nauseum about his principled reasons for exacerbating the budget crisis. He would hold out for a permanent solution. There'd be no gimmicks this time; no kicking the can down the road; no leaving the mess for future governors and legislators to clean up. Suffering today would mean a happier tomorrow. Promise.

"Blah blah blah" is the same whether you say it in English, Austrian or Austranglish.

Now Schwarzenegger finally has his deal and, guess what?, it's all gimmicks, nothing but accounting frauds, rip-offs, hidden agendas and hidden taxes that make punishing cuts in services inevitable. Shame on the Governor for perpetrating this brutal sham -- although, in fairness, should you have expected more?; he has been out of his depth throughout his tenure. More to point, shame on the Ledge's leaders -- no, wait, wrong word: there are no leaders anywhere in sight -- shame on the Democrats, most of whom know better, for going along with it.

Is the crisis real? Sure. The budget shortfall is humungous -- the budget deal is based on the guess that the deficit is $26 billion. There is an old saying to the effect that if your outgo exceeds your income, your upkeep will be your downfall. That California has been spending more than it takes in at least since Schwarzenegger rode into office on the back of an irresponsible promise to cut auto licensing fees is the proximate cause of our downfall. Forget for a moment whether all the state's expenditures are necessary. Forget whether there is bloat and waste. Forget whether there are structural defects in our system of governance. Those are separate questions. The simple matter is that the people's representatives -- especially Republicans of every stripe -- have been unwilling to levy taxes and fees sufficient to pay the bills for government services that Californians want and need.

Although he made the phrase inevitable by his promise not to do so, "kicking the can" -- meaning passing the buck, dodging the bullet, punting, weasling, welshing -- is the journalistic cliche of the hour. This time, though, the can has been kicked so far down the road it may never stop rolling.

If you think I'm exaggerating the tricks and gimmicks underpinning this horror show, consider this: the state's payroll obligations for June 2010, the last month of the current budget year, have been moved -- one day! -- to July 1. The payments will still need to be met, but -- shazam! -- they have disappeared from this year's budget. This sleight-of-hand, providing entirely fictitious savings of $1.5 billion, is a perfect example of budgetary shenanigans of the sort these negotiations were supposed to end (the agreement also calls for speeding up collection of 2010 personal income and corporate taxes to make revenue show up sooner on the books, another accounting trick).

The agreement will gut social programs, including slashing more than $9 billion from spending on education and more than $1 billion each from the health and corrections budgets. It will also reduce by 14% the pay of state workers.

The gory details: K-12 schools and community colleges: $6 billion -- slashed; the University of California and California State University systems: $3 billion -- slashed; Medi-Cal, the state's health care program for the poor: $1.3 billion -- slashed; Department of Corrections: $1.2 billion -- slashed; CalWORKS, the state's welfare-to-work program: $528 million -- slashed (if he had his druthers, Schwarzenegger would terminate the program altogether); Healthy Families, a program that provides health insurance for 930,000 low-income children: $124 million -- slashed; the state's in-home supportive services program for the frail and disabled: $226 million -- slashed; state parks: $8 million -- slashed.

This last pittance probably falls into the hidden-agenda category, as it is expected that it will "require" the closing of some park facilities. Other items on the hidden agenda: selling off part of the State Compensation Insurance Fund, a quasi-governmental agency that is the state's largest provider of workers' comp insurance, fitting in with the Right's privatization efforts -- we'll see whether Sacramento gets anything near the $1 billion it is estimating the fund to be worth; ending the 40-year ban on oil drilling off the Santa Barbara coast, supposedly to bring in $100 million this budget year; shuttering the Integrated Waste Management Board and the Board of Geologists and Geophysicists, pet peeves of the gov; adopting Schwarzenegger's plan to fingerprint health care workers and recipients and to require that caregivers undergo background checks, although the budgetary opportunities these actions provide are mystifying; and giving the governor authority to sell some state-owned facilities, including the Orange County Fairgrounds, the Public Utilities Commission Building in San Francisco and the Ronald Reagan State Office Building in Los Angeles (another of this governor's dumber ideas -- thank heavens he's being termed out).

Perhaps the most pernicious aspects of the deal are the devastating attacks on the coffers of county and municipal governments, the units of governance that provide the services most people  rely on most. The plan will "borrow" about $2 billion from local property tax revenues, money that the co-conspirators promise to repay with interest in three years. If it is paid back, it will be fair to call it borrowing. Outright theft, however, is the only reasonable description of the more than $1.5 billion in redevelopment money and the nearly $1 billion in transportation funding -- the rare case when "highway robbery' is not metaphor -- that will be taken from local authorities and transferred to Sacramento if the agreement passes.

There are fanciful elements to the plan, as well, like the idea that the state will be able to bill the Feds for some of the cuts in Medi-Cal or that school districts will gain anything useful from the option of cutting the already short school year by five days or that the state is going to be able to cut prison costs by the (perfectly reasonable, but politically unfeasible) expedient of releasing 23,000 inmates or that foundations, non-profits and other non-governmental groups can make up for the lost social services.

It's probably too much to hope that the progressives in the legislature will turn this deal down. That would be irresponsible, and no self-respecting Democrat would ever be that. But with the state's credit rating already in the crapper and millions of Californians sure to be hurt anyway, it's hard not to wonder if the good wouldn't outweigh the harm should the Gov and the Ledge be forced to stop playing games. When the voters rejected the passel of scammy budget measures in the spring, the basic message was clear: go do your jobs. It'd still be the best way out of this mess.

See, also: 55% of California Voters Oppose State Budget Deal (Rasmussen Reports)

Update: California Legislature finally approves budget deal (Los Angeles Times, 2009-07-25). Unexpectedly, the Ledge held the line against oil drilling off Santa Barbara and the grab at local transportation funds. A case of nothing is better than something.