Can the Governor Pull Another Miracle in Ballot Measure Campaign?
Governor Arnold Schwarzenegger has turned around a number of ballot measure campaigns, turning what looked like defeat into victory. However, he has his work cut out for him to do that again, according to Mark Baldassare, President of the Public Policy Institute of California that issued a new statewide poll on the ballot measures. Most of the measures are trailing, some by double digits.
In the March 2004 election, Schwarzenegger campaigned hard for budget reforms in Propositions 57 and 58, turning measures that were initially polling in the low 30-percent range to victory on Election Day. Similarly, the governor worked to turn around an attempt to ease California’s three-strikes law and helped take the redistricting Proposition 11 to victory.
However, Baldassare says the political climate is different in 2009 than it was in 2004 when Props 57 and 58 passed. For one thing, he noted the governor’s approval rating was around 60% in 2004 compared to 34% in the most recent poll. Similarly, the legislature was not being roasted with numbers in the low teens as they are today.
Taxpayer Amnesty
Taxpayer amnesty…sounds good but then again, what is in a name? An elderly woman recently appeared before the Board of Equalization. Her crime? She received a refund erroneously. She even paid the money back. Sadly, that wasn’t good enough for the Board majority.
Our victim filed her tax return in 2002 with an anticipated refund. She received a check for roughly $4700 more than her anticipated refund and contacted the Franchise Tax Board to find out why the check was so much. No one at FTB knew. She held the check for three more weeks and deposited it. Her husband recently died so she thought it might have been a death benefit.
Roughly eight months later the tax man cometh wanting his money back. She promptly paid the money back. Was that good enough? Oh heavens no. FTB wants interest, a collection cost and recovery fee and an amnesty interest penalty.
Could Feds take over management of California?
If you haven’t read this week’s report by the non-partisan Legislative Analyst’s Office, you must. There’s plenty of bad news about the state being low on cash, but that we knew. Here’s what knocked me over:
Federal Assistance Could Come With “Strings Attached.” We believe it is appropriate for the Treasurer to explore the possibility of federal assistance—such as a federal loan guarantee—to address this summer and fall’s grim cash outlook. We caution the Legislature, however, against assuming such federal assistance will be available. By taking prompt actions to reduce the state’s cash flow borrowing need to under $10 billion for 2009–10, policymakers would enhance the ability of the Treasurer and Controller to secure private investment with or without a federal loan guarantee. Moreover, reducing the state’s cash flow borrowing will involve actions that improve the state’s medium– and long–term budgetary outlook. These actions would increase confidence in the bond markets, which are needed to continue providing funds for infrastructure projects that spur economic activity and long–term growth. Finally, and perhaps most importantly, we advise the Legislature and other state policymakers to be cautious about accepting any strings that might be attached to federal assistance. Strings attached to recent corporate bailouts—as well as federal loan guarantees provided to New York City during its fiscal crisis three decades ago—have included measures to remove financial and operational autonomy from executives. We recommend that the Legislature agree to no substantial diminishment in the role of California’s elected state leaders. In our opinion, the difficult decisions to balance the state’s budget now are preferable to Californians losing some control over the state’s finances and priorities to federal officials for years to come. (Italics are mine)
California Budget is Systemically Unbalanced
Due to the way the State’s cash flow works, e.g. the lion’s share of budget expenditures occur in the first half of the fiscal year and the lion’s share of revenues come into the state treasury in the second half of the fiscal year, the state’s need for a cash cushion is essential to help smooth this cash flow discrepancy.
However, as the LAO chart below illustrates, the state’s cash cushion going into the first half of the next fiscal year is a third of what it was just two years ago. Also significant is the fact that the only reason the state is ending this fiscal year with a “cash cushion” at all is because of budget gimmicks and short term loans and transfers engineered by the Legislature in September, 2008 and February, 2009.
New Republican Leader Supports Constitutional Convention
Selection of the new Republican Minority Leader boosted the movement for a constitutional convention. Sam Blakeslee has introduced two bills calling for a constitutional convention. ACR 1 outlines parameters for a convention and AB 4, which calls the convention, lays out a proposal for picking delegates.
Blakeslee’s bills would limit the convention to three areas: Election and campaign reform; budget reform, and tax reform. Among the reforms mentioned in the bills are lengthening term limits and requiring fees that exceed a certain standard to face the same two-thirds vote required of taxes.
Blakeslee will be taking on many of these issues as Republican leader. In his new role he has the opportunity to push reforms without the need of a constitutional convention. But, if reforms are not advanced, and trust in state government is not restored, the call for a constitutional convention will become louder.