If there’s to be a short-term deal…
The new Republican line – advanced by Steve Poizner among others – is that the legislature should do a short-term budget deal that attempts to resolve the cash crunch. That’s not a good idea. The lack of a real budget plan is at the root of the state’s inability to borrow. But it’s better than nothing. And right now, we’re stuck at nothing.
However. However. However. If there is to be such a deal, Republicans need to swallow their reality pills and realize that they’re not getting out of town without raising taxes. No responsible Democratic leader would let them get away with that. A package would still have to balance spending cuts with an equal amount of tax increases. The gas tax and vehicle license fee increase would almost certainly have to stay in. To make the numbers work, the sales tax might have to be there too. Republicans could claim victory by saying they held off the income tax surcharge, but that’s the only victory they’d have. And they’d have to fight again. If nearly all GOP lawmakers stick to their “We’re Fiddling Against Taxes While Rome Burns” position, a short-term deal is impossible.
The California Republican Cult
Forget all the talk about whether one Republican will provide the crucial 27th vote in the state senate to pass the massive budget compromise of tax hikes, spending cuts and borrowing. Whether the compromise passes or not, the majority of Republican lawmakers have made their views clear this weekend.
They would rather California fall into the sea than vote for a tax increase.
No one can say they don’t have the courage of their convictions. Their position certainly must be sincere.
It’s also insane.
The deal is terrible. Pass it now.
The tax increases don’t make sense. (Sales tax hikes in a bad recession—not smart. And where’s that severance tax?). The spending cuts are huge. And another $11 billion in borrowing. Who’s going to loan us the money? And where’s the economic stimulus the governor talked about.
It’s a terrible deal, one that will hurt the state and its economy.
And the legislature needs to pass it immediately. (Don’t bother reading it, lawmakers. It’ll only upset you).
Why? Because the costs of a horrible deal are lesser than the costs of no deal. The state is simply out of time, short on the cash to pay its bills. Even with this deal, the state will still be short of cash for the foreseeable future. But a deal, any deal that has tax increases and spending cuts, allows California to step away from the abyss and begin to dig out of its hole and restore its credit rating.
What does the death of the LA Times Local Section mean?
The only thing surprising about the announcement that the LA Times is killing its local news section is that anyone was surprised. Sam Zell, the owner of the paper’s parent company, Tribune (yes, I know that an employee stock ownership plan is the nominal owner, but the ESOP is a tax dodge and employees have no power whatsoever), and his pirate crew of lieutenants have a near perfect record of making stupid moves. This is just another one.
This is also another case of Zell and team doing the exact opposite of what they said they would do. Zell took over a little more than a year ago – yes, it feels like it’s been longer – saying he wouldn’t cut because newspapers couldn’t cut their way to the future. As soon as he had control, he immediately began cutting. Zell also profanely declared in an infamous meeting in the Times’ now defunct Washington bureau, where I worked as a reporter at the time, that readers didn’t care about national news and that the paper’s future was in local news. (He suggested, insanely, that there was a bigger audience for coverage of the Santa Ana city council than there was for stories on national affairs). So it was only a matter of time before local news was gutted.
Cowards, Bullies and Bluffs
Hiram Johnson, the famous early 20th century California governor who was elected as a Republican only to ditch the party less than two years later for a new Progressive Party, was fond of saying this: “You can’t make a man a coward by pointing a pistol at his head. You can only prove him a coward.”
Johnson was defending the concept of a recall of elected officials and judges. (President Taft had spoken out against the idea of adding a recall provision to the California constitution, and Johnson had to defend the recall in the successful 1911 campaign to add direct democracy to the state constitution.
I’ve been thinking about Hiram’s comment as California politics melts down into a lava sea of bitter threats. Labor types are threatening to recall or end the political careers of Democrats they don’t like—and demanding criminal investigation of Republican lawmakers engaged in the usual political horse-trading. The Republican party has countered with threats to excommunicate lawmakers who even contemplate voting for tactics. And some talk show hosts (several of whom face declining ratings and relevance in this era) are demanding “heads on sticks” for lawmakers who vote for taxes.
Cool! Our Own Boston Tea Party!
You don’t want to make the Los Angeles County Board of Supervisors mad. You really don’t. The supes have incredible power–they’re both the legislative and executive branch of government for a county of more than 10 million people. And there are only five of them. Do the math. Yep, those are districts of two million people each. That’s power that puts a mere congressman or state senator to shame. An incumbent supe loses a seat about as often as Halley’s Comet swings by the earth.
But oh, you state government. You’ve gone and done it. You’ve made the supes mad. And now you’re going to pay. Well, more precisely, you’re not going to get paid. Maybe. The county supes are so disgusted at the state government’s fiscal mess — and the legislature and governor’s delay in solving it — that they’re threatening to withhold tax payments to the state. It’s only fair–the state is refusing to pay its bills, and the delays already have cost the county more than $100 million.
Is it legal for the county to withhold payments, you ask? No. Is it practical? Probably not, since most taxes are collected by the state directly. But property tax receipts go through the county. Can they do it? Of course they can. Who’s going to stop them? The state of California? Ha! What’s Arnold gonna do–send the National Guard into the Hall of Administration?
Selling Public Bonds Privately
BURLINGAME — Here’s a sliver of good news in the California fiscal
mess: Although the treasurer’s office has said the state is not selling
any new bonds given the cash crunch and $42 billion deficit, some state
agencies and other government entities may be able to sell bonds anyway.
How?
Privately.
Call it do-it-yourself bond sales. I got the 411 on this Thursday night
at the meeting of the Independent Citizens’ Oversight Committee, the
board that oversees the California Institute for Regenerative Medicine,
the state’s stem cell research agency.
A Way to Fix the Employee Free Choice Act
Since last week’s post on the dishonest business campaign against the Employee Free Choice Act, my email box has been full with friendly if critical missives from business and labor sources and friends.
EFCA, for those who aren’t following the controversy, is major federal legislation supported by labor interest and Congressional Democrats (and a few Congressional Republicans). It would replace the current so-called secret ballot system (so called because these ballots are rarely, as a practical matter, secret) for elections in which workers choose whether to join a union. Instead, workers could unionize simply by signing cards. This is known as “card check.”
I don’t like the current system or the EFCA system. I’d rather we take the existing structure and tighten time limits, add penalties for employers who break the rules, and create a secret ballot system with real secret ballots and prompt, fair elections. I thought this was a middle position. But in the emails, each side – business and labor – accused me of being on the other’s side.
California, Golden State of Constant Crisis
California, the media like to tell us, faces an unprecedented fiscal crisis. The budget deficit is $40 billion and growing. The state is so short of cash that, within days, it may issue IOUs, rather than checks, to pay its bills. The Legislature, bitterly divided, seems unable to agree on a way out. The governor warns of “financial Armageddon.”
How should we prepare for apocalypse?
Before you hide under your bed, check out a few books by some of California’s leading journalistic interpreters of the last 160 years.
You probably won’t have to read very long before you’re reminded that big deficits and threats of fiscal crisis aren’t exactly new here. In fact, the notion of California as a place where current resources don’t meet present needs is at least as old as the Donner Party. And the state’s leaders have always been — in the eyes of journalists — fools and knaves, unable to resolve persistent financial problems.
The Fiction of Business’ ‘Secret Ballot’ Argument
It’s still early in 2009, but my award for the most disingenuous p.r. campaign of the year goes to the national, business-backed effort to fight the labor-backed Employee Free Choice Act. The campaign has a deceptively simple message: preserve the “secret ballot” in union elections.
I’m for all secret ballots. Ideally, union elections would be conducted via secret ballots just like an election for governor or mayor; voters would make their decisions freely and fairly and no one knows how they voted. The problem is this: we don’t have anything like secret ballots in union elections. And the business leaders of the effort to discredit EFCA know this.
The truth about union elections is much more complicated. There are two ways that workplaces go union. The first, now favored by labor, is “card check.” In these cases, workers sign cards saying they want to join a union. When workers have a majority, employers agree to recognize the union. Oftentimes, card check recognition comes after months or even years of pressure and/or negotiations between the union, workers and employers. There can be hard feelings, but the process also can be a cooperative one. Security guards in Los Angeles office buildings were recently organized this way.