Prop 31 Crashes and Burns

The California Budget Project, long the gold standard for intellectual honesty and rigor in California policy analysis, has published its overview of Proposition 31 on the November ballot.

The analysis is long and detailed. (How could it be otherwise for a ponderous jumbo-jet of a ballot measure, which weighs in at over 8,000 words, longer than the original U.S. Constitution plus its subsequent 225 years of amendments?) But it’s worth the time. The CPB doesn’t take positions on measures, but as you read, you will feel the damning details add up, like ice glazing the wings, until the plane stalls under the accumulated weight, falls out of the sky, crashes, and burns.

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California's Lawless Tinpot Demagogues

If you want a poster child for everything that’s wrong with government in the Golden State, take a look at the California Citizens Compensation Commission, a body that manages to combine lawlessness and unaccountability in equal measures.

Created by Proposition 112, a constitutional amendment passed by the legislature and approved by voters in 1990, the commission has a single task: to set salaries and benefits for state legislators and constitutional officers.

There is, of course, no more touchy political question than how much politicians should get paid for doing the public’s work. It’s an issue perfect for demagoguery.

So the idea behind Prop 112, as in so much else of what passes for “reform” in California, was to take the politics out of politics. California would shift the duty of setting politicians’ pay away from legislators and the governor and lodge it in an independent commission charged with following neutral, technocratic rules. In a ballot argument signed by officials of reformy groups like Common Cause and the League of Women Voters, voters were told, “Proposition 112 will create a salary commission that specifically cuts out bureaucrats and elected officers and includes average Californians….[T]heir decision will be made in public by people like you.” [Emphasis in original.]

Except the seven people on the commission are in no way like the rest of us. Appointed by the governor to six-year terms, they are not subject to confirmation, and they are accountable to no one. They can do what they like and nobody else has a say.

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Radio Whisperer

For people within radio listening distance of San Jose, I’ll be talking about California’s various crises on Friday night, May 4, 7:00 p.m., as Russell Hancock, President and CEO of Joint Venture Silicon Valley, interviews me on Inside Silicon Valley on KLIV 1590. The show repeats at noon on Sunday, May 6.

Think Long's Bad Rap on California

There’s been a lot of commentary on the Think Long “blueprint” for California, not much of it glowing. Peter Schrag and David Kersten have published extensive reviews. Joel Fox and Jeff Schauer have focussed, as I did, on its proposal for an unelected executive council.

There’s one thing, though, that no one has mentioned. The indictment embedded in the group’s name and made explicit in its “blueprint”—that California has failed to “think long”—is a bad rap.

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The Lords of Think Long

The Think Long Committee, the group put together by the homeless billionaire Nicolas Berggruen, has finally delivered in its reform “blueprint” for California. Whatever else you think about the proposal, give Think Long some credit for whimsy. At this point in the 21st century, in the nation that gave birth to the modern republican form of government, nobody expects the House of Lords.

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Last Stand at UC

I’ve been inclined to agree with Joe Mathews that University of California students who vent their wrath at the university and the Regents have picked the wrong targets. The retreat from funding public higher education has been sounded from the state Capitol. It is the combination of the state’s broken governing system and the political weakness and incompetence of the state’s higher education leaders that has made colleges and their students into the biggest losers in California’s budget squeeze. As Joe points out, tents on the quad and protests at Regents meetings speak to the wrong audience and the wrong problem.

But that’s not the whole story. Watching UC chancellors respond to the Occupy protests, I’ve come to see that the students are not entirely wrong. Something’s rotten inside the university too.

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Talking Heads

KQED is devoting a special edition of “This Week in Northern California” to what it calls “Broken California,” with a discussion among Susan Kennedy, former right-hand woman to both Governors Davis and Schwarzenegger; Dan Schnur, director of the Unruh Institute at USC; Don Perata, former president pro tem of the Senate; and yours truly. The show airs Friday, November 11 at 7:30 p.m.

Or you can watch it online here:

California is not Greece

California is not Greece

One of the most common, and most facile, journalistic takes on California’s governing crisis is to compare the state to Greece. This is simply wrong. As Harvard University economist Dani Rodrik explains on his blog, Greece stands in an entirely different, and more perilous, institutional relationship with Europe than California does with the United States.

But Rodrik leaves out something even more important in the comparison. For all its woes, California is nothing like Greece either fiscally or economically.

 

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The Two States of South Cal

The Two States of South Cal

Although some in California seem not to know it, one of the major effects of state government is to transfer tax dollars from the coast, where California generates most of its wealth and income, to the less affluent interior of the state. Splitting California to create a new South California would be the beginning of an unprosperous and unhappy marriage.

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How We Got Here

With California fast approaching the hundredth anniversary of the 1911 election that brought us our system of direct democracy—the initiative, referendum, and recall—it seemed a good moment to review the history we tell in California Crackup of how California built and broke its political system. Below is a handy timeline version of the story.

You can see a full-page view here.

Some Day We'll Say Go Away

Jeff Stone, a Riverside County supervisor, is basking a moment in the media sun by resurrecting that hoariest of notions, that California be split in two. He wants to free his constituents of their bonds to the high-taxing, big-spending, business-regulating, gay-marrying folks of the Bay Area, northern California, and Los Angeles and break off a new state of South California, comprising 13 inland counties from Mariposa and Mono on the north to Imperial and San Diego on the south. His proposal will quickly go the way of all such gimmicks. And for that the people of his proposed South California should be very glad. Because one of these days the rest of California might very well take them up on the offer of divorce.

Like other recent would-be state splitters, Stone seems unaware of the big fact of California’s political-economic geography. In California, water flows south and west from the mountains to the valley and coast, but money flows west to east, from the coast toward inland areas. The big money in California is earned and the big ideas are hatched within reach of the summertime Pacific fog. Hollywood, Silicon Valley, the premium vineyards, the most productive marijuana plantings, and seven of ten University of California campuses: All are within 40 miles of the surf. And a disproportionate share of the taxes paid by the robust economy on the coast ends up financing public services for people living in the less affluent interior.

The chart below shows how Stone’s proposed SouthCal would stack up on spending and taxes compared to California as a whole.

Out of Balance

State government educates, medicates, and incarcerates. Public education, health care, and criminal justice account for more than 80 percent of the state budget. The counties that Stone would turn into SouthCal receive at or above their proportional share of those key three functions. (And an even higher share of social welfare benefits.) But as the table shows, they fall far below their share in generating income or revenue. As it’s now constituted, state government is a machine that raises money on the coast and ships a lot of it inland to Stone and his fellow South Californians. His proposal would break that conveyor belt and leave SouthCal (which already has an unemployment rate higher than the state as a whole) much worse off.

But notice that Stone doesn’t propose to divorce the entire coast. Like former Assemblyman Bill Maze, who proposed a similar split a few years back, he wants to include Orange and San Diego counties in his new paradise. He didn’t ask their permission to include them in his breakaway state, and if you look at the third column of the table, which shows how SouthCal would fare without Orange and San Diego, you can see why. Even more than the current state, SouthCal would be dependent on its coastal higher earners to pay for services for people in the inland areas. It is hard to understand why Orange and San Diego residents would want to sign up for that duty.

In fact, they and the rest of the California that Stone wants to divorce may begin to see some merit in his offer to walk away from the rest of us. Shorn of SouthCal, the remainder of California would find itself without a budget deficit. There would be many more places for California children at UC and CSU campuses, where the sons and daughters of Fresno and Riverside would now be paying out-of-state tuition. And there would be a lot fewer elected Republicans screaming about high taxes but then complaining when the Legislature cuts spending for their redevelopment agencies, cities, and local schools. Right about now, a lot of Californians might see that as a very good outcome.

Defining Failure Down

One of the consequences of having the least functional governing system in the world is that the bar for determining what constitutes success gets set very low. Even the most ordinary and trivial things in California get counted as a victory.

A case in point is George Skelton’s column in the Los Angeles Times, triumphantly announcing “that Proposition 25 [the majority-vote budget measure] worked. California’s Capitol has become less dysfunctional.”

Yes, the Legislature and governor have enacted a budget before the July 1 start of the fiscal year, a rare event in Sacramento over the last quarter of a century. It’s good to have a budget in place as the fiscal year begins. It lets the state borrow the operating cash it needs and avoids the messy business of delaying payments to vendors and local governments that happens when a budget isn’t enacted before the fiscal year begins.

But as nice as it is to have a timely budget, it’s more critical to have a good one, and to have political accountability for the result. Looked at in that light, California’s first experience with the Prop 25 system has been a rocky ride:

  • As you might expect in cases where it takes a majority to pass a spending plan but a two-thirds supermajority to pass the taxes to fund that spending, the budget is dubiously balanced. It depends on school funding provisions that probably do not meet the state’s Prop 98 constitutional minimum but won’t be challenged because the California Teachers Association (CTA), the group most likely to sue, was in on the deal. It assumes $4 billion in revenue that the state in all likelihood will not collect. This assumption is offset by provisions that will trigger additional mid-year cuts, largely to higher education and schools. But the budget also contains language that prevent school districts from taking steps to reduce staff to meet these anticipated trigger cuts. To the extent the state budget is balanced, it is at the cost of driving many school districts into insolvency through payment deferrals and restraints on their ability to reduce costs.

  • Prop 25’s debut was marked by the Controller John Chiang’s unconstitutional announcement that it somehow gave him the power to withhold legislators pay even though they had met the measure’s requirement that they pass a budget by June 15. Chiang contended that he had the authority, nowhere present in the constitution, to check the Legislature’s arithmetic to determine whether the budget was balanced. By the criteria he used on June 21 in withholding pay, the arithmetic is still dicey. But Chiang will now resume legislators’ pay. Why? Maybe the budget is only unbalanced when CTA doesn’t like it.

  • Once again, California has a budget for which no one is clearly accountable. Democrats passed it, but none of the Democratic lawmakers who voted for it, nor the governor who signed it, wanted this budget. It was the best they could do without extending the 2009 temporary taxes, for which there were no Republican votes. But neither did GOP legislators want this budget; they all voted against it. Some of them are already complaining of cuts that harm pet projects in their own districts. So who do we now hold accountable? The people who voted for the budget they didn’t want, or the people who made inevitable the budget they didn’t vote for and claim not to like?

  • And if there is any budget for which we Californians would want to hold accountable, it is this one. It is disastrous for California’s future. It hacks $1.75 billion out of higher education. It will most likely slash the length of the school year, already the shortest in the world. It will take away services from hundreds of thousands of the blind, disabled, elderly, developmentally disabled, and the working poor.

If that is what the media now count as California getting “less dysfunctional,” we’re in much deeper doo-doo than I ever imagined.

Want to Read, Kid? Buy a Kindle

On a recent Saturday afternoon I visited César E. Chávez Library in the Fruitvale neighborhood of Oakland. The library, a bright and inviting space, was bustling: kids of all hues loading up on books to read over the summer break; other kids hovering over chess boards or computer terminals. Downstairs, in the lobby, the visitor learned that the scene was in danger. The walls were plastered with the kids’ hand-drawn pleas to their elders to keep their oasis alive:

Seeing the signs brought back to mind a passage from Second Wind, the memoirs of Bill Russell, the Hall of Fame center for the Boston Celtics, who moved to Oakland from Louisiana as a young child. Soon afterward, his mother died, and Russell recounts how, feeling empty and abandoned, he turned to books:

During this time of withdrawal in junior high I had my own private world, and my most prized possession was my library card from the Oakland Public Library. I went there almost every day, and it was not long after my thirteenth birthday when I read two passages that focused the grief I felt over my mother’s death and the forces that I’ve had to contend with ever since. The first passage was in a book on early American history. I was breezing along through a chapter on the American Revolution when I did a double take on one sentence. It was as if somebody had stuck a foot out there on the page and tripped my mind as it went by. I looked again, and this sentence jumped out at me: Despite the hardships they suffered, most slaves enjoyed a higher standard of living and a better life in America than they had in their primitive African homeland.

I had to get up and walk out of the library. For weeks afterward I went around in a fog. The sentence stunned me. There it was, written plainly, that people were better off here as slaves than they had been as free people at home. I couldn’t believe anyone had the nerve to say something like that, especially in a history book. My brother and I had always had a special reverence for history books; if something was written down in one, we believed it meant you could rely on it without question. History was the final referee of what was true. We had one in the house, and we used to settle arguments by saying, “Let’s look it up in the book.” And now, here in a history book was an attack on my very essence as a person.

That day in the library is still vivid to me. I remember that I was sitting at a long table, with my right forearm across the top of the open book and my left forefinger running down the page, the way I used to read. I remember being so taken aback by the sentence that I couldn’t swallow. I thought of “darkest Africa” pretty much the way young white boys must’ve thought of it, as a place where Tarzan ran around among animals and witch doctors. I didn’t know or care what slavery or Africa was really like, but I was repulsed by the idea that life could be better without freedom. To me, being a slave meant you had to buckle under.

As far as I can remember, this was the first time I was ever enraged. I’ve been scared before, like once when a white man chased me across the field in Louisiana threatening to “hang” me for throwing a pebble at his car. I also had been afraid or hurt when my mother died. But I hadn’t been angry, because such occasions were too big and I was too small. They were simply things I discovered as the world revealed itself to me—no different from discovering comic books, schoolrooms or crocodiles, except that they hurt. But there in the library, with another hurt, it was if I could say no. For the first time I felt grounded in anger, and it would last for years to come.

But Russell didn’t just discover anger at the library. He also found, in reading about Henri Christophe, one of the leaders of the slave revolt that made Haiti an independent country, a sense of dignity and power that transcended race.

As a thirteen-year-old kid in the Oakland Public Library, I never dreamed, of course, that I would ever see the Citadel [the fortress Christophe built]. But at a time in my life when I was meek and shy, I would thrill every time I read about how Christophe outfoxed another general, or how he drove people to accomplish the impossible. Part of me identified with him even after I grew old enough to be revolted by his cruelty and tyranny over his own people. I know better than to admire him, but part of me still does so.

Henri Christophe was my first hero after my mother. To me, he was just the opposite of the slave: he would not be one. He was indomitable. I think his life brought home to me for the first time that being black was not just a limiting feeling.

Just imagine. After ten years of the Great Depression and four years of total war, with rationing of meat and gasoline and top marginal income tax rates of 90 percent, that California still felt it could afford a place where a skinny black kid just out of Louisiana could read his way into the world and find his way from loss and anger to pride and dignity.

Maybe the kids at César Chávez Library can find a time machine to take them back there.

The Budget That Wasn't Phony Enough

Some readers seem to have concluded that my critique of Controller John Chiang’s power grab means I favor a gimmicky budget. Those readers haven’t been reading very closely. So let me spell it out again.

Yes, as I’ve written, the budget passed June 15 is full of gimmicks. That’s a bad thing. It’s also an inevitable thing, given the constitutional whips and chains that prevent a legislative majority from taking the actions, like raising taxes, suspending the Prop 98 school funding guarantee, and moving spending and revenue from programs imposed by initiatives, needed to balance the budget. In California, what is constitutionally required (that the Legislature pass a balanced budget) is not constitutionally permitted.

But as I’ve also written, there is a constitutionally approved and timed-honored way of bringing a gimmicky legislative budget into balance: The governor uses his line-item veto to reduce the appropriations in the budget to a level that can be funded with anticipated revenues. Jerry Brown, to no one’s surprise, did not have the political courage to do that. Far from favoring a gimmicky budget, I’ve been pretty much alone in arguing that Brown failed to do what is necessary to have a balanced one.

Those readers seem also to believe that Chiang is standing against budget gimmicks. Again, they have failed to read very closely.

In moving illegally to withhold legislators’ pay, Chiang explicitly denied he was acting against the gimmicks in the budget. “While the vetoed budget contains solutions of questionable achievability and some to which I am personally opposed, current law provides no authority for my office to second-guess them,” he said. He instead relied on an invented authority to check the budget’s internal arithmetic.

Let’s be clear what that means: Chiang would not have taken away lawmakers' pay had they set the revenue estimate high enough to cover his re-estimate of the budget’s spending. In other words, Chiang has punished the Legislature because the budget wasn’t phony enough.

Thanks to Chiang, you can be sure lawmakers will never make that mistake again.

California, State of the Absurd

Just when you think California governance can’t get more bizarre, Controller John Chiang, using constitutional authority he admits he doesn’t have, has decided to withhold pay from legislators for having passed a gimmicky budget, which is the only kind of budget that California’s current constitutional and political balance permits them to pass.

I won’t belabor the legal and constitutional issue, which I analyzed previously, except to note that Chiang himself, in his internally self-contradictory statement, provides no evidence to justify what is, on its face, an abuse of his office and violation of the constitution.

Instead, in the interest of appreciating the utter absurdity of the moment, let’s step back and look at the larger picture.

Let’s assume for a moment that Chiang has the power he has asserted. Let’s also assume, which almost no one disputes, that the budget passed June 15 by the Legislature contained gimmicks to paper over deficits, just as most budgets have for the last decade.

And then let’s ask a question: How could have the majority party in the Legislature passed a budget that would have spared legislators from Chiang’s wrath?

As a matter of normal arithmetic, the easy answer is that the Democrats could have raised taxes to make the budget balance. As a matter of constitutional and political arithmetic, that answer wasn’t available to the legislative majority.

Under California’s system of minority rule on most matters fiscal, it takes a two-thirds vote to raise any tax or fee. And the minority Republicans have been adamant in refusing to do that. You can say that they should compromise (Republicans would say surrender) on taxes in the interests of the greater good. However, that would require those Republicans to do precisely what their own voters sent them to Sacramento not to do. (And what a majority of voters statewide seem to oppose, according to the most recent PPIC poll.)

With taxes constitutionally taken off the table, the normal arithmetic dictates spending cuts. And since the largest share of the state budget goes to schools, that means cuts in school spending.

But again, as a matter of constitutional and political arithmetic, that answer wasn’t available to the legislative majority either. The constitution dictates a minimum level of school funding, which can be reduced only by suspending Prop 98. That also requires a two-thirds supermajority, which is nowhere in sight, in large part because polling shows that Californians overwhelmingly oppose cuts to school funding.

So how could the majority party in the Legislature have passed a budget that would have met Chiang’s approval? They couldn’t have. Under our current constitution and current politics, passing an honest budget is not something within the power of the legislative majority.

And yet John Chiang presumes to punish lawmakers for not doing what we, the voters, have prevented them from doing. With apologies to Gary Shteyngart, welcome to the new Absurdistan.

California Crackup Gets Ruled

It's always nice when someone thinks your work is useful, so Joe Mathews and I were honored on Saturday when Californians for Electoral Reform, at their annual meeting in Oakland, gave us the 2011 Wilma Rule Award for California Crackup. CFER is a model of the kind of reform group California needs: grassroots, composed of people from across the political spectrum, committed to thinking deeply about how we can bring modern electoral and governing ideas into our creaky institutions. You can learn more about CFER at its website.