What’s up with John McCain closing in on Barack Obama in the recent Public Policy Institute of California poll? Most pundits have written off this state for McCain saying Obama will not have to campaign here or spend money here. It was in the bag.

But when a 24-point Obama lead in some early polls falls to only a 9-point lead in the most recent PPIC poll, it has to give both sides pause.

The PPIC poll was conducted before Senator Joe Biden was added to the Democratic ticket and before Obama’s speech at the Democratic Convention.

Mark Baldassare, the PPIC president and director of the poll says his survey found Independent voters moving toward McCain. “Independents are still finding out about the candidates. They weren’t that involved in the primary elections for the most part and are just getting to know the candidates,” Baldassare said.

What jumped out at me reading the results of the new Public Policy Institute of California (PPIC) poll is that fiscal conservatism is still strong in the Golden State. While the poll indicated that a plurality of those polled (44%) felt that a mix of tax increases and spending cuts should be used to solve the budget crisis, nearly as many likely voters (38%) said the budget hole should be closed only with cuts.

On top of that, almost all voters think the state wastes money. That statement is not an exaggeration. It truly is almost ALL likely voters according to the PPIC survey. Nearly two-thirds of the likely voters (63%) said the state wastes a lot of money, and an additional 31% said the state wastes some money. A staggering total of 94% see the state as wasteful.

Furthermore, jobs and the economy is the big issue with voters right now. Forty-two percent say that is the number one issue in California and taxes is second at 10%. The frequent number one issue, education, was ranked fourth at just 6% in this poll.

The Governor said he would not sign any bills that came his way until the budget was settled — then three weeks later, lo and behold, he asks the legislature to send him four bills that must be signed in the next few days for these measures to make the November ballot. You can read Kevin Yamamura’s Sacramento Bee story here.

Okay, I understand there is a certain urgency to these four bills because they require voter approval. The bills include: 1) clean up provisions for Proposition 1, the high speed rail bond; 2) a water bond; 3) a budget reform measure that includes provisions for a rainy-day fund; and 4) a measure to improve the lottery so that it may be more appealing for investors.

But the fact remains that the Governor made a bold stand to kick-start the legislators into doing their job of presenting him with a budget … then he backed off. We’re not going to get anywhere with this delayed budget fiasco if the governor doesn’t hold legislators’ feet to the fire.

With frustration exhibited in many quarters about the difficulty to govern California, I wondered if anyone would call for a state constitutional convention to re-work government from the ground up. Somebody has. Jim Wunderman of the Bay Area Council business group published an op-ed piece in the San Francisco Chronicle suggesting just that.

Spurred on by another late budget, Wunderman is promoting the idea of a constitutional convention to change a California government he says suffers from “drastic dysfunction.”

Opening up the Constitution is fraught with dangers. California’s only effort to overhaul the constitution in a convention occurred in 1879. Delegates from the Workingman’s Party and the Grangers captured that convention. They were able to produce a document that put into the constitution their agenda, which included regulation of the railroads, new tax policies and restrictions on Chinese from owning property or holding certain jobs.

On Friday, it was announced California’s unemployment rate hit a twelve-year high at 7.3%. On Sunday, the legislature met in extraordinary session to vote on a budget plan that would raise the income tax on upper income taxpayers and raise the corporate tax. The measure was defeated, failing to secure a two-thirds vote.

Good thing because, had the plan succeeded, the unemployment rate would likely jump even higher.

Taking money out of the economy from businesses and those who can invest in job creating enterprises is not the way to confront an unemployment crisis. It would just exacerbate the problem. Corporate tax collection was lower than expected in July according to the Controller’s monthly report, down almost 18% from the projection in the Governor’s May revise. Raising taxes on businesses won’t help that situation.

California’s Legislative Analyst, Elizabeth Hill, is retiring. It has been her job for 22 years to run the Legislative Analyst’s Office and present analysis on legislative measures, the governor’s budget and a wide array of initiative proposals. Beyond that she has led the LAO in preparing studies to bring perspective to many of California’s governmental conundrums. I remember carefully studying one such book entitled Making Government Make Sense. I didn’t agree with all the recommendations but I applauded the effort.

Yesterday the Senate took time to praise Elizabeth Hill as reported by Capitol Alert’s Shane Goldmacher. Hill heard justifiable tributes from both sides of the political aisle. Frequently, the 120 members of the legislature are referred to as Hill’s 120 bosses. However, Hill looked at these legislators as her clients delivering her observations in a straight talk manner that would humble John McCain.

And she never forgot that she had a few million more clients beyond the legislature – the people of California.

There appears to be a widening crack in the wall of Democratic Party opposition to redistricting reform.

Recent ballot measures attempting to reform the redistricting process, which creates district boundaries from which candidates run for legislative offices, has often pitted one major political party against the other.

Not this time.

While some Democrats are claiming that Proposition 11, the redistricting reform on the November ballot, is a “Republican power grab,” and the state Democratic Party is officially opposed to Proposition 11, usually faithful donors to Democratic causes are putting up money in support of the measure, reports the San Francisco Chronicle’s John Wildermuth.

Is there a budget deal?

Senate President Pro tem Don Perata says he has reached an accommodation with Governor Arnold Schwarzenegger on the budget, although as of this writing there is no confirmation from the Governor’s office.

The key trade-off is reported to be a temporary sales tax increase for a rainy-day fund, spending cap and some spending cuts.

If there is a deal, Perata will bring the measure to a vote in the Senate, and the buzz around the Capitol is that he may have the votes in the Senate to pass the compromise, including the two Republican votes he needs.

If so, the budget end game will fall on the Assembly. Pressure will build to get the deal done. The Key — the spending cap. What exactly is it, and how tightly can the cap be screwed on?

Attorney General Jerry Brown successfully altered the title of Proposition 8 on the November ballot. Initially, Brown had labeled the initiative to declare marriage only between a man and a woman: Limit on Marriage. After the California Supreme Court ruling allowing same-sex marriages Brown changed the label to: Eliminates Right of Same Sex Couples to Marry. He then beat back a court challenge by the initiative’s proponents and kept the new title in place.

Emboldened by this blessing from the Court, the AG considered looking at some of the other propositions so as to reveal a better understanding of these initiatives.

Here, reveled for the first time, is a list of the old ballot labels and the AG’s new improved ballot monikers.

Proposition 1. Safe, reliable, high-speed passenger train bond act for the 21st century

New Ballot Label: Safe? Reliable? High Speed passenger train bond act, hopefully to be finished in the 21st century

Friday’s San Diego Union Tribune editorial revealed some of the budget reforms Governor Arnold Schwarzenegger is supporting in the state budget negotiations. The editorial said the inside look was provided by a party to the discussions. If correct, then the governor is standing behind some real reforms to the budget process.

As also stated by the Union-Tribune editorial, the sales tax increase that has been discussed in the budget negotiations would be a mistake for the state economy. However, focusing just upon the reforms, if implemented, they would be a step toward ending California’s boom and bust budget cycles.

The reported reforms are designed to take political wiggle room out of current spending rules, establish a rainy-day fund with strict requirements to release the funds tied to provisions provided by the Gann spending limit passed by voters in 1979; and allow for gubernatorial authority for mid-year budget corrections, including the power to suspend cost-of-living increases for state programs during revenue shortfalls.

Tough stuff.