Brown’s Money Bad News for Newsom
When a newspaper asked the 2010 candidates for governor how they would handle California’s budget mess, Attorney General Jerry Brown begged off, saying through a spokesman that he wasn’t an official candidate for the state’s top office.
The once and possibly future governor should try telling that – with a straight face – to the 100-plus donors who already have given him more than the $6,500 maximum for the June primary for attorney general, the campaign he’s still “officially” planning.
Although the official campaign finance figures for the first half of the year aren’t due until Monday, it’s clear that Brown is raising serious money for his all-but-guaranteed governor’s campaign despite being bound – for now — by the much lower contribution limits of a down-ballot race.
That’s terrible news for San Francisco Mayor Gavin Newsom, the only announced Democratic candidate for governor. If Brown is smoking Newsom in fund-raising now, how much worse will it get when the attorney general actually announces he’ll seek a third term as California’s governor?
Hertzberg: Now’s the Time to Empower Local Governments
With the state taking local government revenue to balance its budget, the door flew open for California Forward’s plan to re-energize local governments. The organization, funded by major foundations to produce solutions to California’s governance problems, will soon present ideas to devolve power and responsibility to the locals. Regardless if the local governments are successful with a lawsuit to return the funds, the time is ripe for the devolution plan to go forward said Bob Hertzberg, the former Assembly Speaker and co-chair of California Forward.
And, he believes because of the budget deal, which will put the squeeze on local governments, voters will be paying attention.
I caught up to the peripatetic Hertzberg on a plane ready to fly between Washington, DC and New York but his focus, as usual, was on California.
Wouldn’t It Be Nice to Have Prop 65 Now?
In 2004, California’s local governments were well on their way to protecting their tax dollars from state raids. They’d work for years to write and qualify a ballot initiative of their own, Prop 65, that would have forced legislative leaders to win voter approval before taking or borrowing major local tax revenues for state purposes. It also had tough language limiting the state’s ability to impose mandates on local governments without reimbursements.
By my reading, Prop 65 would have made the local government piece of the current budget deal virtually impossible. But Prop 65 lost.
Why? Local governments never campaigned against their own measure. Instead, the locals struck a deal with the governor and legislature on a compromise measure, Prop 1A that appeared on the ballot alongside Prop 65. The locals promised as part of the deal to tell voters to go no on 65, and yes on 1A.
Financing the Incompetence
If you wonder why many businesses feel abused and taken for granted by California, you don’t have to look any further than the IOUs that the state sent out this month.
Without so much as a thank you, California pushed its funding problem off on its creditors and the state’s banks by issuing the IOUs. The people and businesses that were paid with the IOUs but couldn’t find a bank to convert them into cash had been forced, in effect, to carry a piece of the state’s debt on their backs. And the banks that cashed the scrip for their customers ended up recording a part of the state’s debt on their balance sheets.
What’s more, banks that accepted the IOUs were engaging in unsound practices. A bank that cashes too many of those kinds of IOUs under normal circumstances could get rung up by regulators, including state regulators, because the bank was draining its liquidity. You can bet that little irony was lost on California legislators.
The message the state sent to banks: “Don’t do anything stupid or dangerous. Unless I make you.”