Governors Make Sense…and So Does a Member of the Board of Equalization

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Last Friday, I questioned how much emergency power Governor Schwarzenegger might be able to use given the ruling in superior court that backed up his order to furlough state workers twice a month due to the budget crisis, which the court declared an emergency. Using emergency powers to streamline the regulatory process will get projects up and running faster, which is better for the economy.

Now, we hear from three former California governors that using emergency powers and streamlining environmental procedures is a way to help get us out of the fix we’re in. Former governors George Duekmejian, Pete Wilson and Gray Davis published a commentary in the Washington Times yesterday supporting the use of emergency powers to push along projects that they expect will be funded by the president’s stimulus package. You can read the Washington Times piece here.

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It’s a Bet on Super Monday

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Now that Super Bowl Sunday is over (congratulations Pittsburgh Steelers on winning the Super Bowl), I wonder if this will be Super Monday when a deal on the budget is announced. Perhaps it will happen tomorrow, making that Super Tuesday. The betting here indicates that a budget deal will be announced soon.

If there is a deal we’ll learn what’s in it, which will set off screeching sirens from one interest group or another dissatisfied with what was given up to bring folks on the other side to the table. In true Super Bowl betting fashion, we could take odds on how the reactions to a budget deal will play out.

Yes, I know it’s a bit premature since we don’t know what’s in the deal, but betting on anything related to the Super Bowl occurs before the kickoff and we can make some good guesses on budget proposals and reactions to them. If the Las Vegas sports books can lay odds on what song Bruce Springsteen will deliver first in the half time show, Fox & Hounds Daily can open up the books on some pre-budget deal bets.

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Emergency Powers

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In ruling that Governor Arnold Schwarzenegger has emergency powers to order furloughs for state workers, Sacramento Superior Court Judge Patrick Marlette said, “The current circumstances constitute an emergency.”

With the state teetering on the financial precipice, soon unable to pay bills, the judge apparently equated California’s situation to any natural disaster that might hit the state.

The Governor sees it the same way. Recently, Schwarzenegger said he views our fiscal emergency like he would view an earthquake. It’s a crisis of the moment that demands immediate attention.

Now that we have a judge agreeing that the governor has extraordinary powers to confront this fiscal crisis, the question is: How far can the governor take this emergency power?

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Poll Numbers No Map Out of the Budget Wilderness

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The Public Policy Institute of California poll results this morning don’t provide a clear map on leading the state out of the budget wilderness.

While 44% of those polled believe that a combination of taxes and cuts are the remedy for our current budget problem, the kind of taxes voters chose to support will not get us off the long term budget rollercoaster. Corralling the greatest support was the proposal to tax the wealthiest Californians at 69% of likely voters. The trouble with that is the wealthiest Californians already pay the greatest portion of the state income tax. The wealthiest one percent pay fifty percent of the income taxes in the state. Hitting that group of taxpayers up for more will mean California will be even more dependent on the volatility of the marketplace. Relying on the most progressive income tax in the nation already has led us into the fiscal ups and downs we have witnessed over the last decade.

Raising taxes on corporations was approved by 60% of those polled. Given all the lay-offs corporations have made of late this maneuver is contradictory to the voters feelings on the number one concern in the state as indicated by the poll: jobs and the economy. Raising taxes on corporations is sure to send more workers into the unemployment line because the corporations will be paying money to the state instead of paying salaries to workers.

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Strange Bedfellows

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Not often will you see Wall Street CEOs and public employee unions mentioned in the same sentence, but in the recession drama playing out in California and across the United States, they are linked by taxpayers’ dollars.

Wall Street CEOs have been taking taxpayers money so that their companies will survive, and then turning around and paying large bonuses. They’ll tell you they are not using the bailout money for the bonuses, but without the bailout money, there would be no other money to pay the bonuses.

The public employee unions also want taxpayer money to pay their members in full without making concessions during these hard economic times. Three California public employee unions have filed lawsuits charging that Governor Arnold Schwarzenegger cannot furlough workers for two days a month to help the state weather the fiscal storm. As I discussed a couple of weeks ago, another public employee group even called for the Governor’s impeachment over the furlough demand.

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Tax Commission: What’s the Mission?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The newly formed state tax commission – formally, the Commission on the 21st Century Economy – got off to a lively start at its first meeting on the UC San Diego campus yesterday. Commissioners couldn’t agree on the commission’s mandate.

The chief disagreement occurred over whether the commissioners are supposed to recommend a tax system that is revenue neutral or not.

Former Assembly member Fred Keeley, referring to the governor’s executive order creating the commission, said the commission was not charged with bringing in a program that was revenue neutral. Commission Chairman Gerald Parsky agreed that the text of the order did not speak of revenue neutrality but he insisted that the governor, Assembly Speaker and Senate President Pro Tem indicated at the press conference announcing the formation of the commission that revenue neutrality was a clear objective.

Keeley responded that the governor had an opportunity to call for revenue neutrality in his order and didn’t do it so that need not be a guiding principle of the commission.

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Congratulations President Barack Obama

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The new president took the oath of office this morning promising a "New Era of Responsibility." Within that responsibility he included government saying that the question is not whether government is too big or too small but whether it works. If it works he intends to move forward, if the answer is no, he said, programs will end. This view of government is one that should be pursued at all levels and one that has frustrated many who have tried. I wish our new president good luck in pursuing the goal of government accountability.

The president also spoke of the building block of our country the "risk takers, doers, and maker of things" who create our prosperity. He praised the faith and determination of the American people and the individuals who must take up responsibility for themselves and the nation. This emphasis on the individual is a good sign. For it is these individuals who make up the risk takers and doers he praised.

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The Obama Presidential Connection: Lincoln and FDR, Yes, but Jefferson, too

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Barack Obama has made it clear that he admires Abraham Lincoln. He followed the same train route into Washington Lincoln used for his first inaugural; he plans to take the oath of office on Lincoln’s bible; he has read Lincoln biographies and writings searching for guidance on leadership.

Franklin Roosevelt is another president identified by Obama’s transition team as a president to study. FDR took office in 1933 in the midst of a horrendous economy much like Obama faces today.

However, a third president who should share the spotlight during Obama’s historic inauguration is Thomas Jefferson. In fact, Jefferson’s first inaugural address mirrored the goal Obama established as a core value of his presidential run – to overcome harsh political dissension and bring the country together.

Following one of the more bitter campaigns in American presidential history, Jefferson attempted with his inaugural address to bridge the political schism in the country. Jefferson famously said, “But every difference of opinion is not a difference of principle. We have called by different names brethren of the same principle. We are all Republicans, we are all Federalists.”

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Civil War

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Is California in a “civil war”? In his state of the state speech, the governor said, “I think you would agree that in recent years California’s legislature has been engaged in civil war.”

Have the two sides gone to war over their ideologies? Dictionary.com defines “civil war” as a war between political factions or regions within the same country. How can you not argue that we are witnessing a war between political factions, as long as we define war in this instance as intractable rhetorical battles sans bloodshed?

Yet, the term troubles me. It conjures up images of America’s Civil War and the battlefields I have visited where blood soaked the ground and seeped into America’s soul. Differences were settled not by diplomacy but by battle. Perhaps, with the issue of slavery that was inevitable.

But, is war necessary over budget issues? Diplomacy has been found wanting in the budget debate, as well. It has been tried. There have been countless meetings over the three special sessions called by the governor to settle the budget crisis. No “negotiated” settlement has come about as yet.

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Furloughs and Fat Fabian

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

One public employee group wants the governor impeached for suggesting two day a month furloughs for public sector workers. The furloughs amount to a 10% pay cut for the workers. I don’t remember the thousands upon thousands of private sector workers who lost their jobs calling for the governor’s head. When my consulting business suffered a more than ten percent loss a few months back, I didn’t start a recall petition on the governor. What is it with the public employees?

Loren Kaye on this site did an excellent job of pointing out how California’s public sector employees are reacting quite differently from private sector employees to the difficult economic times. Democratic elected constitutional officers, who declared they would not furlough their workers, aided the public employees’ stance. I hope those elected officers sent out notes of sympathy to fired private sector workers who lost their jobs as quickly as they objected to the governor’s orders to furlough their employees for a couple of days a month.

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