Author: John Wildermuth

Controller John Chiang’s grim report on the state’s year-end cash figures Friday added another red flag to the sea of scarlet surrounding the state budget, but it was the “good” news that may be the most worrisome.

While the state originally was projected to run out of the cash needed to pay its debts and its workers later this month, the use of IOUs “will preserve enough cash to make those protected payments through September,’’ the report stated.

Urgency? What urgency? With the latest absolutely, positively, no-kidding-this-time deadline now somewhere out there in the distance, that leaves plenty of time for the posturing, finger-pointing, name-calling, sulking and other political game-playing that make up the annual budget dance.

Carly Fiorina, sidelined for months by breast cancer surgery last March, is apparently back on the campaign trail, quietly gathering support for a run at veteran Democratic Sen. Barbara Boxer next year.

While the former Hewlett-Packard CEO isn’t talking, an aide told Michael Finnegan of the Los Angeles Times this week that Fiorina is talking to GOP officials around the state, “seeking their advice, their counsel, their prospective and their political support.’’

Fiorina should also be asking for their prayers, because she’s going to need plenty of divine assistance if she decides to take on Boxer.

Get ready for a wave of stories about Fiorina’s political future, as her aides dole out occasional tidbits of information in an effort to keep a wave of interest building for the first-time candidate.

Here’s a reminder to those groups touting a new poll showing that, in the words of the release, “California voters overwhelmingly support a $1.50 tobacco tax increase.”

A poll is not an election. And what voters say in a poll doesn’t always reflect what happens on election day.

Joel Fox, the lead hound on this blog, wrote Wednesday that the push for an increase in the tobacco levy is a none-too-subtle attempt to ease voter resistance to tax hikes in general, clearing the way for future boosts in a wide range of tariffs.

Maybe so, maybe no. It’s no secret that Democrats in the Legislature and public employee unions have been leading the charge for closing the state’s $26.3 billion budget hole with a mixture of cuts and tax hikes. But if they think the shopworn numbers in the new poll are likely to change any minds in Sacramento, they haven’t been paying enough attention to past California politics.

When Assembly Speaker Karen Bass stomped out of a meeting with the governor Sunday night and boycotted a Big 5 budget session Monday, she complained that Gov. Arnold Schwarzenegger was pushing a laundry list of reform measures that have nothing to do with the budget.

But if Bass and other Democrats listen closely, they may hear the governor offering them a path to a budget agreement, even though it’s a road they won’t much like.

Schwarzenegger has been talking about the need to eliminate waste, fraud and abuse in state programs like welfare and in-home supportive services. He even brought in a posse of district attorney types from around the state Monday morning to share horror stories about the problems with IHSS, which provides in-home care for the frail elderly and disabled.

No surprise there. “Fraud, waste and abuse” is almost a mantra for Republicans and no few Democrats looking to show voters that they’re going to be tough with the government’s money. It’s a cry that typically fades away as soon as the polls close on election day.

While legislative leaders and the governor all say that things now are moving along swimmingly in the state budget negotiations, talk continues to be about the only cheap thing available in Sacramento these days.

Going into the holiday weekend, Democrats and Republicans were promising to meet non-stop with the governor to get a quick deal to eliminate the state’s $26.3 billion budget deficit and ease California’s financial troubles.

“In my mind we’re making significant progress,’’ Democrat state Senate leader Darrell Steinberg told reporters after promising that tax increases are now off the table.

Things are moving so quickly, said GOP Assembly leader Sam Blakeslee, that it’s even money that “we’ll find a solution that is acceptable to all parties within a week.’’

The Legislature is slated to shut down for a month-long recess on July 17, but given the slim chance for a quick agreement on the budget, legislators shouldn’t buy any non-refundable tickets.

As the state controller began Tuesday to print out the first batch of IOUs that will replace the cash money many state vendors, clients and taxpayers normally would receive, the governor and legislators reprised the old kindergarten game of “I didn’t do it, he did it.”

Gov. Arnold Schwarzenegger opened the game with a morning news conference in the Capitol, where he complained that the Legislature has spent the past four weeks with “an endless amount of hearings and debates, finger pointing and assigning blame,” instead of fixing the budget.

The governor then proceeded to finger point and assign blame, saying that legislators – meaning Democratic legislators — won’t support reforms to root out fraud in huge government programs like In-Home Support Services, are committed to protecting special interests and are refusing to make the same sacrifices they’re asking of other California residents.

In the end, Tuesday’s absolutely-positively-gotta-pass-something budget session was just another drill.

Senate Democrats brought out a trio of bipartisan Assembly bills that needed to get passed before the fiscal year ended at midnight to avoid poking another $3.6 billion hole in the budget only to see all three fail on yet another party-line vote.

The result? Not only did that $3.6 billion in anticipated 2009-10 school cuts disappear when the clock struck 12, but also under the state’s arcane education finance rules (thank you, Prop. 98), California will now be on the hook for another $2 billion in required payments to the schools for next year, boosting the deficit to about $26.3 billion.

But worst of all, even with the near certainty that the state now will have to pay its clients and vendors with promises instead of cash for who knows how long, there wasn’t even a hint that anyone not in the Assembly is willing to make the compromises that are going to be needed to solve the budget mess.

Who’s going to blink first?

That’s what California’s budget battle has come down to as the Legislature and the governor try to reach some agreement that will allow the state to pay its bills next week with cash and not just promises.

Gov. Arnold Schwarzenegger is about the only person in Sacramento still looking for the immediate perfect compromise that will close the state’s $24.3 billion budget gap and hopefully end the fiscal squabbling until January, when his 2010-11 budget is due.

Everyone else is pretty much resigned to putting together a stopgap plan that will keep the state from having to issue IOUs next week, clearing the way for more weeks of talk and budget stalemate.

On Thursday, the Assembly managed to vote out a bipartisan package of bills that would provide the state with about $4.5 billion in needed cash, enough to stave off the IOUs for most of the summer.

If Congress had term limits, President Obama wouldn’t have been in the Rose Garden Monday, signing a bill that gives the Food and Drug Administration its long-sought control over tobacco products.

The bill had been stalled in Congress since the early 1990s and only made it to the president’s desk after more than 15 years of effort by Democratic Rep. Henry Waxman of Los Angeles.

For those doing the math, that’s longer than California’s six-year limit for Assembly members, eight-year limit for state senators and the 14-year limit for a combined legislative career.

When California voters approved term limits back in 1990, the stated purpose was to open up government to a wider range of elected officials, citizen legislators who would serve their term in office and then, Cincinnatus-like, put aside politics to return to the farm or insurance office or car dealership or whatever.