Here comes Governor Sunbeam

As they say, it's déjà vu all over again.

In an article by Silicon Valley Mercury-News "clean technology" reporter Dana Hull we learned over the weekend:

During his first two terms nearly four decades ago, Jerry Brown became famously known as Governor Moonbeam. Now he seems destined to become Governor Sunbeam.

With the epic battle over the state budget finally behind him, Brown's first major policy initiative aims to fulfill the ambitious goal laid out in his campaign: to develop a clean-energy economy in California.

Brown wants the state to produce 20,000 new megawatts of renewable electricity -- enough to power 20 cities the size of San Francisco and roughly one-third of the state's current peak use -- by 2020. That would nearly triple the amount of electricity that California currently gets from renewable sources.

The plan includes the fast-tracking of large, utility-scale renewable power plants. But 12,000 megawatts are to come from "localized electricity," small systems located close to where energy is consumed that don't require new transmission lines. A variety of technologies, from biogas to wind, will play a role. But solar panels -- on the roofs of commercial buildings and along the banks of state highways -- will be a dominant element.

"The future of energy is not Texas oil," Brown said last month at the groundbreaking for the Blythe Solar Power Project, a massive solar power plant under construction in Riverside County. "It's California sun."

Richard Caperton, an energy policy analyst with the Center for American Progress, said the scale of Brown's energy ambitions are unprecedented. "Doing it statewide, at this level, is unheard of," he said. "This is the sort of goal that countries in Europe and Asia are operating with."

Hull has clearly identified Brown's goals for this term - to be identified with the next big technology thing - one that has already become important and will ultimate become big regardless of anything Brown does. This sounds so familiar - in fact a memory:

To celebrate California's leadership in space (51% of NASA's procurements in 1977 went to California - the next state was Alabama with 8%) and the occasion of the first free flight test of the Space Shuttle, Governor Jerry Brown hosted a "Space Day" on August 11, 1977, at the Museum of Science and Industry in Los Angeles.

The event was organized by Russell Schweickart, on loan to the Governor from NASA, and cosponsored by the state and the aero-space industry. It got widespread news coverage because 1) Brown had always been seen as strictly Mr. Era-of-Limits, 2) the Carter administration was giving signs of reducing the NASA budget, 3) it was the summer of the phenomenal success of the film "Star Wars'', and 4) Brown was the first major political figure to offer a national vision of space adventure since President Kennedy.

Speaking at ''Space Day" were all of the major NASA leadership (including the new NASA Adminstrator Robert Frosch) and also Gerard O'Neill, Carl Sagan, Jaques Cousteau, Bruce Murray , head of the JPL and Robert Anderson - head of Rockwell International, which built the space shuttle.

To end the program former ''beat poet'' Michael McClure read a new work, ''Antechamber'', against the silent showing of a film made of the most spectacular NASA footage. Michael, who is a proponent of space exploration but not of space colonies, jotted some poems during the course of the day's talks and gave us permission to print them here.

Next morning, August 12, most of the "Space Day'' participants were at Edwards Air Force Base, along with 68,000 other kibitzers, to see the smoothly successful first atmospheric flight of the space shuttle Enterprise.

Brown is still the same guy he was 36 years ago. He likes hobnobbing with the tech folks. It gets him good press and leaves the impression he's "with it." He did it back then, he's doing it now. He likes to pursue policy objectives in tech fields, policies that are unrealistic for the time. He did it then, he's doing it now.

So a year before Prop 13 he was at a conference on space in Los Angeles. If he had been a responsible Governor and State Government leader from 1975-77, Howard Jarvis would not have had a cause. Instead he chose to become Governor Moonbeam. Brown failed as a leader then.

Here we are with Jerry Brown and without a realistic political leader for our government in crisis. Instead of dealing with the myriad of problems which are in his purview, according to a UCLA News Release: "On July 25–26, the governor, in partnership with the UCLA Luskin Center for Innovation and Bank of America, will host "The Governor's Conference on Local Renewable Energy Resources" at UCLA, exploring how the public and private sectors can drive local energy generation to meet that 12,000 megawatt goal."

Brown leads things off with a panel discussion featuring David Crane, the CEO of NRG Energy, Rick Needham, Google's (GOOG) director of green business operations and Lyndon Rive, CEO of SolarCity. Keep these names in mind.

This morning The Sacramento Bee gave us a warm explanation of Brown's energy policy:

The idea behind local energy generation is to put small systems close to where the energy gets used so that the environmental impact is minimized and new transmission lines aren't required. Think rooftop solar, for instance.

Yes, think roof solar. Then the article mentions:

Meanwhile, the governor is jumping into a court case challenging a large solar energy project in the Mojave Desert.

Brown announced last Friday that he has filed what's known as an amicus brief asking a federal judge to deny a request to halt completion of the Ivanpah project, which his office says will create as many as 1,000 construction jobs and produce enough energy to power 140,000 homes.

It leaves you to figure out what's really going on, though at least in a subtle way let's you know it isn't about a few solar panels on your roof.

In fact, Governor Moonbeam-Sunbeam has taken on the non-profit Western Watersheds Project. From their web site:

In January Western Watersheds Project filed suit in federal court to halt construction of the Ivanpah solar power plant project being built on public lands in the Mojave Desert. The project site consists of 5.4 square miles of high quality habitat for the Endangered Species Act protected desert tortoise. WWP California Director Dr. Michael Connor has maintained that the U.S. Fish and Wildlife Service relied upon the project proponent's self-serving science that woefully underestimated the number of desert tortoise that would be impacted by the development.

According to the BrightSource web site, the ISEGS - "which counts NRG Solar, Google and BrightSource as equity investors - is currently the largest solar plant under construction in the world. The project is being constructed by Bechtel."  According to the same web site here's the investors Brown is advocating for (you'll remember some of these companies mentioned above "Brown leads things off with a panel discussion featuring David Crane, the CEO of NRG Energy, Rick Needham, Google's (GOOG) director of green business operations....) :

Yes indeed, Governor Governor Moonbeam-Sunbeam is now a shill for the likes of Morgan Stanley and Chevron. Then there is the other big player NRG Solar, a wholly-owned subsidiary of NRG Energy. You've probably never heard of NRG Energy. So let's allow them to tell you about themselves:

NRG Energy is a Fortune 250 wholesale power generation company headquartered in Princeton, New Jersey. We own and operate one of the industry's most diverse generation portfolios (including nuclear, wind and solar power) that provides nearly 26,000 megawatts of electric generating capacity, or enough to support nearly 21 million homes. NRG’s retail businesses, Reliant Energy and Green Mountain Energy Company, combined serve more than 1.8 million residential, business, commercial and industrial customers.

Hmmm. Well that's the spin from their web site. Here's what this international energy holding company told investors in their annual report:

As of December 31, 2010, NRG had a total global generation portfolio of 193 active operating fossil fuel and nuclear generation units, at 45 power generation plants, with an aggregate generation capacity of approximately 24,570 MW, as well as ownership interests in renewable facilities with an aggregate generation capacity of 470 MW. NRG’s portfolio includes approximately 24,035 MW in the United States and 1,005 MW in Australia and Germany, and approximately 265 MW under construction, which includes partner interests of 120 MW. In addition, NRG has a district energy business that has a steam and chilled water capacity of approximately 1,140 megawatts thermal equivalent, or MWt.

Governor Brown's in court defending these guys from the endangered desert tortoise. All so that you can put solar panels on your roof. Boy does this guy know how to spin for the press.

The coming bankruptcy of a court system - the end of a 40-year California government process

California's budget has become a serious problem for some serious people - our judges.

Of course, like the other two California government branches and our State's finances, our court system has been thoroughly screwed up. And like California government generally, the process of screwing it all up began in the 1970's.

Nobody remembers low cost local justice courts that used to handle infractions, misdemeanors, and small claims. They were presided over by a Justice of the Peace, frequently a non-lawyer because the pay was low. In 1974, after a unanimous California Supreme Court held that it was a violation of the right to due process to allow a non-lawyer justice to preside over a case that could result in jail time, California gradually eliminated the justice courts. It gave attorneys an opportunity to create more jobs for themselves.

These courts could have, of course, continued to try infractions and small claims at a low cost. But in the 1970's all three branches of California government were infected with runaway stupidity.

Jerry "Moonbeam" Brown was elected Governor in 1974 and the justice court issue, like runaway taxes leading to Proposition 13, wasn't on his agenda then. Instead he wanted to put a political stamp of his own on the state's justice system and in 1977 appointed Rose Bird Chief Justice which like most things Brown did then was politically stupid and governmentally inept. In 1986 Bird became the only Chief Justice in California history to be removed from office by the voters.

Five years later, in 1991, Gov. Pete Wilson appointed Ronald George chief justice. From a law standpoint, George was well qualified. He was first appointed to the bench by Gov. Ronald Reagan in 1972 and received four more promotions from governors Jerry Brown, George Deukmejian and Pete Wilson. When Wilson appointed George Chief Justice in 1991, the relationship between the Supreme Court and the Legislature was strained. Since then, in addition to showing excellent legal scholarship, George restored that relationship.

George, who retired at the beginning of this year, noted he did so with the satisfaction that the California court system has the respect of the Legislature and Governor as a coequal branch of government. (Since the public's approval rating of the Legislature and Governor are, and have been for years, at the "those morons" rating, I'm not sure that's good, but....)

One other thing that George accomplished is to take control of the courts away from the 58 counties to, according to George, ensure consistent and equitable budgets for the entire judiciary.

And he became the manager of a multi-billion dollar courtroom construction program funded by a special bond issue approved by California's dimwit voters.

George became one of the State's more powerful bureaucrats through the Lockyer-Isenberg Trial Court Funding Act of 1997 when the Administrative Office of the Courts, which the Chief Justice runs, became a major state agency now with 1,700 judges and 21,000 other employees spending $4 billion a year.

When The Great California Slump reduced General Fund Disbursements 19.2%, from a high of $107.3 billion in 2007-08 to a low of $86.7 billion in 2009-10, things had to give on the court scene. As noted by columnist Dan Walters:

As the state's fiscal situation deteriorated, George found himself vying with advocates for schools, prisons, health and welfare programs and other claimants on a much-diminished state revenue stream. Standing with George and Cantil-Sakauye on Thursday, Schwarzenegger slyly alluded to George's ceaseless pleas for more money.

George also found himself dealing with rebellious lower court judges who complained that they were being forced to close the courtrooms to save money as the AOC expanded its staff and as a troubled statewide court computer system piled up costs.

The Cantil-Sakauye mentioned in the quote is current Chief Justice Tani Cantil-Sakauye, George's replacement. George and the 1974 court left her with a mess not unlike the mess Jerry Brown left himself.

The computer system, known as the California Court Management System, a symbol George's efforts to centralize judicial management bypassing locally elected judges, resulted in the Alliance of California Judges, local judges who sponsored legislation that would affirm the right of local courts to manage their affairs, legislation that failed this year.

State Auditor Elaine Howle issued a critical report:

AOC has consistently failed to develop accurate cost estimates. Projected in 2004, the AOC's earliest available cost estimate for the system was $260 million, an amount that grew substantially to $1.9 billion based on the AOC's January 2010 estimate. Over the same period, complete deployment to the superior courts has been postponed by seven years, from fiscal year 2008-09 to fiscal year 2015-16.

After that report came out, the chief administrator of the AOC William Vickery retired. But that didn't solve the problem for Cantil-Sakauye who Friday had to give the bad news to the judges - their once $4 billion budget was now more like $3 billion and $350 million was to be spread to the local courts.

"It has never been worse," said Cantil-Sakauye.

The cuts will close some courthouses including some George's bond issue built, reduce court hours, and delay civil trials, custody decisions and divorces in some counties. Local judges attacked. From the LA Times:

San Francisco County Presiding Judge Katherine Feinstein took jabs at the statewide administrative office that runs the court system and lectured judicial leaders about their solemn duties.

She said her court has sent layoff notices to 41% of staff and plans to close 25 of 63 courtrooms while the Administrative Office of the Courts has been devising grandiose schemes that "are sucking tens of million of dollars from the trial courts."

The San Francisco court will be more seriously impaired than many other superior courts because it previously spent all its reserve funds to avoid layoffs. It now will lose nearly $5 million in addition to a previous deficit of $8 million paid from reserves. Most other courts figured out how to minimize the expected long term impact of The Great California Slump by retaining at least some reserves.

Feinstein did not explain why the San Francisco court management made such a stupid choice.

Not all the courts have been quite as foolish. According to a Redding Record Searchlight article headlined Judicial council spares counties cuts for 2012-13:

Shasta County Court Executive Officer Melissa Fowler-Bradley said Friday the judicial council's action was "pretty much" what she expected, adding the budget cut could have been a lot worse.

Still, she said, it's not going to be easy to handle.

Earlier this month, Fowler-Bradley said the court's five-day-a-week branch in Burney will be open only Wednesdays after Sept. 9. That change is expected to save about $120,000 annually in personnel costs.

But that leaves her with $620,000 to cut from the Superior Court's $15.5 million budget.

"It's going to be tough," she said, though she's hopeful that layoffs and work furloughs can be avoided.

But then there's this from an Associated Press article:

Then there's San Joaquin County, the crime-plagued capital of the Central Valley, home to Stockton, always among the top ten cities in foreclosure rates. Among other significant cuts to its overwhelmed court system, San Joaquin is planning to stop deciding all small claims cases. More than 3,000 were filed last year.

The county is pleading with state court leaders for extra funding so it can reopen its Tracy courthouse and restart hearing small claims cases.

"It's horrible for litigants," Presiding Judge Robin Appel said. "These people simply will not have their day in court."

So in 1996 George had to solve the problem of lack of respect by the Legislature and Governor brought on by Brown the last time around. Now Cantil-Sakauye has to solve the problems left behind by George's centralization of power at the state level, while dealing with the results of The Great California Slump.

Perhaps it's time to revisit 1974 and the subsequent decisions to close the locally controlled Justice Court system. Maybe it's time to find a less expensive way to deal with small claims, divorces under our no-fault law, building code violations, landlord-tenant disputes, infractions, and maybe even some misdemeanors where the penalty is only fines.

And maybe we ought to get rid of any prosecutions under State law for violations related to marijuana. Let the feds clog their courts.

Or we can just watch our jurists attack each other while that branch of our government fails to serve us. That sounds so much more like California in the 21st Century.

A California Government Finance Stabilization Proposal

Economists specializing in state and local government finance agree that the one major "structural" problem in California's government is Proposition 13. We rely too heavily on volatile tax sources like income, corporate, and sales taxes. A greater share of government funding needs to come from property taxes. Here's my California Government Finance Stabilization Proposal:

1. Use the the Corporation Tax single sales factor income allocation rules as proposed in Governor Brown's January 10, 2011 Budget.
2. Cut the current Personal Income Tax to generate a third less revenue, exclusive of the Proposition 63 1% rate (leaving it unchanged).
3. Keep the state sales and use tax rate at 5% (down from 6%) and effectively collect the use tax on out of state purchases on the Form 540.
4. Increase the Proposition 13 property tax rate from 1% of assessed value to 1½% of assessed value.
5. Restore and fund from property tax revenue the Williamson Act to conserve agricultural properties; place two-thirds of the remaining revenue derived from the 1½% rate in a state special fund to fund education, from pre-school to graduate school, and to fund health care and day care for infants, toddlers, and k-12 students; return the remaining revenue derived from the 1½% rate to the counties for distribution under the same formulas used previously, excluding  allocated to school districts, community college districts, and the Office of the County Superintendent of Schools.
6. Remove property other than owner-occupied residential property from the assessed value near-freeze of Proposition 13; for owner-occupied residential property, assessed value shall be determined as provided by existing law.
7. In the case of rental residential property, the assessed value should be tied to changes in tenants and rents paid by new tenants.
8. In the case of all non-residential property, the assessed value should be increased 10% a year until it is equal to market value.
9. Establish a spending ceiling for general fund and special funds (exclusive of federal funds, enterprise funds, and funds spent on Presidentially declared disasters) that is equal to fiscal year 1990-91 spending (the base spending year) adjusted as follows:
   • for spending other than spending for K-12 schools, community colleges, and prisons the base year adjusted by the cumulative change in the CPI and the cumulative change in population;
   • for K-12 school and community college spending, the base year adjusted by the cumulative change in the CPI and the change in the number of students attending all K-12 schools and community colleges;
   • for prison spending the base year adjusted by the cumulative change in the CPI and the change in the offender population; and
   • place any surplus revenue into a "rainy day fund" to be used in years when revenue fails to support spending within the ceiling.

Mentalist Fans: CBI Layoffs Possible

FACING THE BUDGET AX

What happens when reality could derail fiction? As I noted in my June 29 post, one of the cuts in the adopted State of California 2011-12 Budget has a potential significant impact on CBI employees Teresa Lisbon, Kimball Cho, Grace Van Pelt, and Wayne Rigsby and consultant Patrick Jane.

Following the adoption of the budget, California Attorney General Kamala Harris issued a news release in which she noted "The Bureau of Investigation and Intelligence and Bureau of Narcotic Enforcement will also likely be eliminated...."

Let someone thinks this is baseless hand wringing by Harris, a number of law enforcement officials around the state joined her including San Diego District Attorney Bonnie Dumani who issued a letter stating:

The purpose of this letter is to share my concern with the proposed cuts to the California Department of Justice, Division of Law Enforcement (DLE). As the elected District Attorney of San Diego County, my office investigates and prosecutes crime along California's border on a daily basis. It is through collaboration with the Division of Law Enforcement that we are able to see results from our efforts to stem the tide of violent crime crossing into California.The work of the Bureau of Narcotics Enforcement and the Bureau of Intelligence and Investigations is a key piece to a statewide strategy to prevent gang crime.I understand the challenges in balancing the state's budget, but urge you to keep in mind that most local law enforcement agencies are taking severe staffing reductions, especially the smaller agencies, and we will need the assistance of DLE more than ever.

One has to wonder if the 2011 fall season opener will begin with Lisbon telling her team of possible layoffs. Would make for an interesting story arc. Of course if the CBI gets the ax....

(Yes, I know the show is fiction. And for those who a stickler's for details, the current agency name is the California Bureau of Investigation and Intelligence. But for years it was known only as the California Bureau of Investigation as can seen from this old web page dating back to the early 2000's.)

The ins and outs of funding the drug war in Mendocino's tight economy

So I'm looking at my local newspaper and see the following headline: County recognized as significant drug trafficking area.

Now exactly why Mendocino County would be so recognized, I can't imagine.
Anyway the wording "recognized as" somehow seems like something related to an honor. Well maybe it's not an honor, but it may be handy. According to the story, the Sheriff says:

The HIDTA Program can provide assistance to Mendocino County in assessing regional drug threats; designing strategies to focus efforts that combat drug trafficking threats; developing and funding initiatives to implement strategies; facilitating coordination between Federal, State and local efforts; and improving our overall effectiveness and efficiency of drug control efforts.

So apparently we are part of this program and in the company of others around the nation according to this map:

This is very timely because according to this article the new California state budget will cut $35.8 million out of the State Department of Justice law enforcement budget next fiscal year and another $35.2 million in the year after that, probably resulting in the loss of $40 million in matching federal funds over the next two years. This could cause the loss of up to 600 law enforcement positions and eliminate the bureau of narcotic enforcement and the bureau of investigations and intelligence.

Hopefully whatever the Mendocino County Sheriff's Office loses in Governor Jerry "Moonbeam" Brown's budget will be replaced by President Obama Administration's new push to go after medical marijuana. I'm not sure how it will work since Mendocino County licenses medical marijuan growers, but somehow the money will flow.

And the overall governmental craziness continues as we join with Alameda, Contra Costa, Lake, Marin, Monterey, San Francisco, San Mateo, Santa Clara, Santa Cruz and Sonoma counties in participating in this program.

The Will-of-the-Voters Budget

Notwithstanding any other provision of law or of this Constitution, the budget bill and other bills providing for appropriations related to the budget bill may be passed in each house by rollcall vote entered in the journal, a majority of the membership concurring, to take effect immediately upon being signed by the Governor or upon a date specified in the legislation.

This language seems pretty straightforward to me. It's part of our State Constitution, Proposition 25 approved by 55.1% of the voters on November 2, 2010, the same day they elected Jerry Brown Governor and elected a Democratic majority in each house of the State Legislature.

On June 28, 2011, that Legislative majority approved a budget containing major spending cuts in all program areas, sending it to Brown who said he's on board with the budget bill.

But also it's a budget predicated on significant revenue growth. In the first seven months of the current fiscal year, 2010-11, the total of Corporate, Personal Income, and Sales Taxes exceeded 2009-10 by 12.16%. Based on that surprising news, every budget proposal discussion since February has assumed continuation of the growth.

The problem is February through May the 2010-11 total was the same as 2009-10. If February - May is indicative of a trend, the adopted budget will be $10-$12 billion short on revenue without even considering the gimmicks that may not work because they are illegal.

This may be the worst California General Fund Budget ever adopted. But it is truly the Will-of-the-Voters Budget.

The voters did not give the ability to raise taxes to a majority of each house of the Legislature, assuring that taxes would not be raised. The voters did not elect a majority in each house of the Legislature that would completely eviscerate funding for schools, caring for children, caring for the aged and the infirm, law enforcement, courts, fire protection, emergency medical services, libraries, etc. But the voters did set in place a system that would result in major funding cuts for all those government services during bad economic times.

With complete foreknowledge, the electorate put in place a system that could only produce this Will-of-the-Voters Budget. And the list of knowledgeable people who supported establishing this system is an impressive list of wise and politically savvy folks - just ask them.

So imagine my surprise when I read on the San Francisco Chronicle website who angrily came out swinging in reaction to the Will-of-the-Voters Budget:

The president of the California Statewide Law Enforcement Association -- who happens to work as a DOJ special agent -- also had some choice words for the governor and Democratic legislators. Alan Barcelona accused Democrats of welcoming drug gangs to California and called the budget cut "absolutely astounding."

Gee,the California Statewide Law Enforcement Association is on the list of wise and politically savvy folks who supported Proposition 25.

Department of Justice (DOJ) funding is a good example of "where the rubber meets the road" in State Government, so let me take some time here to review the truth for Mr. Barcelona and others.

The DOJ employs a lot of those expensive state employees we hear about from the anti-tax forces. For the past four years, now-Governor Jerry Brown was Attorney General (AG), the head of the DOJ. Here's how the functions of the DOJ were described in former-AG-now-Governor Brown's January 10, 2011 Budget:

The DOJ represents the people in all matters before the Appellate and Supreme Courts of California and the United States; serves as legal counsel to state officers, boards, commissions, and departments; represents the people in actions to protect the environment and to enforce consumer, antitrust, and civil rights laws; and assists district attorneys in the administration of justice.

The DOJ also coordinates efforts to address the statewide narcotic enforcement problem; assists local law enforcement in the investigation and analysis of crimes; provides person and property identification and information services to criminal justice agencies; supports the telecommunications and data processing needs of the California criminal justice community; and pursues projects designed to protect the people of California from fraudulent, unfair, and illegal activities. The DOJ receives funding support from the General Fund, as well as federal funds and a number of special‑purpose funds related to the Department’s regulatory and legal enforcement activities.

In Brown's January proposed budget, on Appendix Page 19 what one can learn is that the $0.6 billion projected 2010-11 expenditures in the DOJ increased 9% over 2009-10, even though federal funding dropped $4.5 million and General Fund support dropped $25 million.

What one can also learn is that in Brown's January 2011-12 budget proposal, DOJ spending was still 5% higher than 2009-10. This was true even though federal funding was projected to be slightly lower than 2009-10 and General Fund support was to be cut another $37 million (making the General Fund support reduction $62 million from 2009-10 levels).

So the Chronicle story tells us the folks at the DOJ, including newly elected Attorney General Kamala Harris, are upset about the adopted June 28 budget:

Harris' Department of Justice would see a $35.8 million reduction in its law enforcement budget next fiscal year, and another $35.2 million in the year after that. That $71 million cut could cost the DOJ another $40 million in matching federal funds over the next two years, said Division of Law Enforcement Director Larry Wallace.

"We could be looking at cuts in excess of $100 million," he said. "It's unprecedented, unsafe and unsustainable to the Department of Justice and it will greatly handcuff California law enforcement. We could lose up to 600 law enforcement positions if we take this hit, and possibly have to eliminate the bureau of narcotic enforcement and the bureau of investigations and intelligence."

Since these cuts were more or less included in the Governor's January 2011 budget which assumed an extension of temporary taxes, all this looks like political spin aimed at the anti-tax Republican base which is typically pro-law-enforcement.

On the other hand, it does appear from the quote noted above that California Statewide Law Enforcement Association President and DOJ employee Alan Barcelona "didn't get the memo" and appears genuinely angry at Democrats in the Legislature. Maybe Barcelona was surprised when Wallace, his boss, pointed out that the Will-of-the-Voters Budget eliminates jobs in the DOJ.

Unfortunately for Mr. Barcelona, Californian's aren't enamored with what they perceive as "the bureau of narcotic enforcement."  For the majority of Californian's the most visible squandering of law enforcement time and money is the marijuana eradication program. In fact, polls indicate that the majority of Americans, including many thinking conservatives, have second thoughts about the whole War on Drugs thing.

So when Californians expect every department in State Government to reduce spending because of The Great California Slump, given the choice of activities in the DOJ...

• prosecuting violations of consumer, antitrust, civil rights and environmental laws;
• providing persons and property identification, communications, data processing, lab and other services for the criminal justice community; and
• coordinating drug enforcement such as marijuana eradication;

...guess which activity many folks might think is the least important.

In the years immediately following the passage of Proposition 13 in 1978, then Governor Jerry Brown working with then Assembly Speaker Willie Brown started gaming the system. It has taken over 30 years, but it's over. Like many leaders in California's public employee labor organizations, Mr. Barcelona does not understand that we are nearing the end of the gaming of the governmental finance system.

When Californian's in 1978 decided to move away from the one stable governmental revenue source - the property tax - and shift to the volatile income and sales taxes, they presumably expected government to adapt. That means eliminating functions in hard times.

Governor Brown's May 2011 budget revision devotes 13 pages to such function eliminations most of which, I assume, have been incorporated into the final budget.

Interestingly in that May revision there is one reference to the DOJ:

DNA Identification Fund Shortfall - The May Revision proposes to transfer $10 million General Fund to the DNA Identification Fund, and restore $4.1 million Genera l Fund to the DOJ for lease revenue payments on regional forensic laboratories. Revenues to the DNA Identification Fund have not come in as projected; therefore, these changes are necessary in order to ensure the DNA and regional forensic laboratories are able to continue performing critical public safety work

In other words, "when push came to shove" Brown restored funding to a DOJ program that makes sense, seems necessary, and would have general public support.

That's how the process established by Proposition 25 is going to work. You don't furlough employees to save money like the Gubernator did. You particularly don't furlough employees at the DMV whose Department receives no tax money and is experiencing no reduction in fee revenue. You lay off employees working in tax supported functions based on how important you think those functions are to the people of California. And if you can't do those functions adequately, you stop doing them.

Now, of course, comes the part people will only begin to understand today. Late last night, the Senate approved Assembly Bill 114, the last of the budget followup bills needed to make the budget work. A key element in this bill "slides" $5.6 billion of tax revenue out of the State General Fund and into county revenue to support transferring prison inmates to county jails. It sounds reasonable. But the tax revenue no longer counts as State General Fund tax revenue which means it no longer is subject to Prop 98 that would require 40% of it on K-14 education.

Of course, in order avoid being lynched by one of their key constituencies, the teachers' unions, Democratic Legislators included a provision that suspends school district powers to issue teacher layoffs between now and August and requires districts to ignore the possibility of mid-year cuts for revenue projection purposes. Plus approved budget provisions requires that districts deal with a potential mid-year budget cut by slashing school days and laying off bus drivers rather than teachers.

The problem, of course, is that the budget cuts related to slashing school days and laying off bus drivers are the ones called "trigger cuts" and the bill require districts to bargain any further reductions in the school year with unions that represent teachers and non-classroom staff.

The "trigger cuts" relate to only $4 billion of the $11 billion in tax revenue growth over 2009-10 actual included in the budget. Here's how it works:

• If $1 billion or more of that growth fails to materialize, no cuts are needed and any shortfall will be dealt with in future years' budgets.
• If more than $1 billion but less than $2 billion of that growth fails to materialize, a list of $600 million in cuts will maybe occur and the rest of the shortfall will be dealt with in future years' budget.
• If more than $2 billion of that growth fails to materialize, $1.9 billion in cuts may be imposed including the ones on the schools and the rest of the shortfall will be dealt with in future years' budget.
• If not only the $4 billion, but some or all of the remaining $7 billion fails to materialize as is possible no solution is offered because that just can't happen - right?

According to the Sacramento Bee:

Gov. Jerry Brown and Democratic leaders have pledged to pursue a 2012 ballot measure that puts this "realignment" plan in the constitution, giving counties sufficient assurances that they will continue receiving money for providing services in lieu of the state. Based on AB 114, that measure also will include tax increases to pay for realignment in future years, just as Brown's original budget sought to do.

AB 114 says that if the voters reject this measure -- or if it never reaches the ballot -- the state must determine in November 2012 how much it would have owed schools for 2011-12 had the $5.6 billion never gone to local governments. Right now, that amount stands at about $2.1 billion. The money would be repaid over five years with 20 percent of it dedicated to paying off deferrals, mandates and other onetime purposes.

If the ballot measure fails, the bill seems to ensure that schools are essentially held harmless by the tax shift -- and that their base will effectively be $2 billion higher this year and in future years than Brown's original January budget proposed.

If the measure passes, schools will not get repaid that $2 billion, but they stand to get more money from voter-approved taxes in future years.

At this point, this is so convoluted I hope the language in the various bills as adopted makes some sense.

As I said before, this may be the worst California General Fund Budget ever adopted. But it is the Will-of-the-Voters Budget.

The morons in the Magic Kingdom

The Republicans in Sacramento are basically moronic. But we’re hopeful that they can realize we’re on an unsustainable trajectory here, one that is not fiscally responsible and one for which they are at least partially responsible. - Gil Duran, Brown's press secretary, in a interview with KPCC

California Government reflects the fact that the State is the Magic Kingdom as noted in a previous post. In keeping with that view, a key member of the Brown Administration declared the Republicans are the "morons" in our State Government? Really?

Here's what I wrote on January 11, 2010, the day after Governor Jerry "Moonbeam" Brown presented his budget proposal (emphasis added):

Foolishly I thought Brown was going to offer a severely reduced balanced budget to the Legislature with a possible solution such as proposing to increase the Proposition 13 tax rate of 1% of assessed value to 1½% of assessed value to avoid completely devastating our systems to educate and care for children. I thought he was going to create a serious discussion about the future of California government rather than attempt to put it off for five years.

In five years, the opportunities to keep California "golden" will be even more severely constrained. This is some legacy the son of Pat Brown is going to leave us.

Of course, with these proposals he simply just restarted the same old political arguments....

On January 30, I noted:

"When we unwind what has been done (in the past)," Brown said, "it's very difficult," noting the outpouring of opposition. But if it's not done and the tax extensions aren't approved, he adds, the alternative is "so horrible that we don't want to release it."

On the following day, Brown compared the Republicans in the Legislature to those in Egypt not wanting to fair and open elections despite the fact the Legislators and Brown were just elected in a free, fair, and open election just 90 days before.

Guess what! This year the Democratic majority in the Legislature adopted a budget on June 15 without a voter-approved tax increase. We had a budget! It did seem to have many cuts, but was it really "so horrible that we don't want to release it?" Yes, it was filled with gimmicks, many of which would likely be determined to be illegal. The "gimmicks" violated one of Democratic Governor Moonbeam's promises to the electorate. So he vetoed the budget bill.

During his campaign last year, Governor Moonbeam promised that he wouldn't accept:

1. an unbalanced budget,
2. a gimmick-filled budget,
3. a budget that gutted education, medical care, and social services,
4. a budget that included new taxes not approved by the voters.

To balance the budget, Moonbeam was advocating what now would be a voter-approved tax increase. To get that on the ballot, he needs the votes of all the Democrats in the Assembly plus the votes of two Assembly Republicans and the votes of all the Democrats in the State Senate plus the votes of two Senate Republicans.

He has tried since January to get the Republican votes, but he couldn't get them. Despite the fact that he'd been California Attorney General the four years immediately prior to 2011, he didn't know he likely wouldn't be able to get the Republican votes. In my opinion if there is a "moron" here it is Moonbeam who didn't understand the situation.

As usual in politics, to get the four votes Moonbeam and Legislative Democrats would have to compromise. The negotiations were messy and a compromise would clearly alienate some of the Democratic constituency. On June 14, for the record the Republicans provided an outline of what they wanted which you can view here. Though there is some important ideas in the proposals, the Democrats were never going to accept the key elements.

And everyone but Moonbeam is "reluctant" to adopt a budget bill based on a tax increase approved by the voters because the voters are unlikely to approve a tax increase.

Moonbeam lost his public employee and teachers union support for an initiative effort because the polls make it clear that getting a majority of voters to approve a tax increase is unlikely. It is unlikely he will get the Republican votes he needs to put a tax increase on the ballot and even if he does, at the risk of repeating myself, getting a majority of voters to approve a tax increase is unlikely.

Assuming income and sales tax revenue projections in the vetoed budget bill were accurate (which is a questionable assumption), to avoid gimmicks and legally questionable proposals and to begin to repay money borrowed from schools and local government and to prudently provide for a 1-2% General Fund reserve, the Legislature would have to cut another $11± billion from the adopted budget which included $11 billion in cuts the Assembly Democratic majority really didn't want to make.

In a recent Sacramento Bee article, absent a tax increase the dilemma is described as follows:

"I don't think there's a responsible way to cut your way to a solution," said Jean Ross of the California Budget Project, which advocates for low- and middle-income residents. "There's not a way to still have viable programs that meet federal standards, court standards, constitutional standards and the standards of the voters of California."

That pretty much describes it all.

To make any significant cuts, the Legislature would have to cut spending for  K-12 schools and community colleges. The voters established Proposition 98 which prohibits that without a two-thirds vote to suspend its provisions for another year. The Republicans have rejected that and it is clear that the voters are looking at that with a great deal of skepticism.

To make any significant cuts, the Legislature would have to cut spending on Medi-Cal and various programs for the poor elderly and children all of which would face legal problems in court or with the federal government, the latter probably resulting in loss of federal funds which would result in even higher unemployment in California. As the Gubernator proposed, the state's welfare-to-work program could be eliminated, but it's unlikely there would be enough votes in either house of the Legislature to do that.

Today we have this news:

Gov. Jerry Brown and Democratic legislative leaders announced today that they have reached an agreement on a new majority-vote budget plan.

A story earlier today explained:

Gov. Jerry Brown and legislative Democrats are hashing out a new majority-vote budget that relies on $4 billion more flowing into state coffers but "triggers" mid-year cuts to education and other programs if that money never materializes.

The trigger cuts would replace some of the most dubious solutions in the previous Democratic budget, such as selling state buildings and imposing a quarter-cent local sales tax on a majority vote, according to sources unwilling to be named. If revenues fall short, cuts would hit K-12 schools and higher education, public safety programs and In-Home Supportive Services.

...The new budget includes a tax swap that redirects 1 percentage point of the statewide sales tax to counties for Brown's public safety "realignment," sources said. Under that plan, the state would redirect lower-level inmates to county jails and shift parole responsibilities. The tax swap has the added effect of reducing the state's Proposition 98 requirement for schools.

This raises the question of what's a "gimmick" when we talk about the budget.  I've prattled on in previous posts about what gimmicks have been included in the various budget proposals - including Moonbeam's - and in prior year adopted budgets. Fortunately, others have begun to catch on. The venerable Pew Center on the States Stateline web site explained what budget gimmicks are. The writer also noted that "editorial boards have praised Brown for exercising responsible fiscal judgement" then wryly noting that "Brian Joseph of the Orange County Register has written that Brown's own budget plan uses gimmicks too."

That Register article explains:

For example, the Democrats’ budget was blasted [by Brown] for deferring payments to education. Well, in January, Brown proposed deferring $2.1 billion in payments to education, although his May revision scrapped the idea because the governor planned to have extra money, either because of an uptick in the economy or because he assumed his plan for a tax extension would pass.

Or take the issue of borrowing. In his veto message, Brown complained that the Democrats’ plan included “costly borrowing.” That’s a fair complaint. But in January, the governor’s budget plan called for $1.8 billion in borrowing from special funds, which was later reduced by $744 million in his May revision.

Then there’s the matter of one-time fund shifts. These are particularly galling to budget purists, because fund shifts entail robbing Peter to pay Paul. They solve nothing long term and create a hole elsewhere. Brown’s May revise relies on at least two major fund shifts, diverting $98.6 million in Proposition 63 funds to county health services and moving about $1 billion in Proposition 10 (First 5 Commission) dollars to Medi-Cal.

The Pew Center article lists "five ways states hide deficits." For example, Gimmick #1: Putting off payments. California has a handle on this one - we use it extensively. The easiest one was a simple bookkeeping entry. We dated State employee payroll checks for June 2009 payroll July 1 instead of June 30. This was the least problematic of our State Government "putting off payments."

Gimmick #2: Accelerating revenue was used when we increased our income tax withholding tables and accelerated Corporate Tax estimate payments.

We've basically used up all possible versions of Gimmick #3: Using temporary money for recurring expenses.

The Legislature this year used Gimmick #4: Counting on savings that aren’t likely to materialize.

And Gimmick #5: Counting on revenue that isn’t likely to materialize is the key element in what appears to be a final budget agreement.

So the Legislature and Moonbeam cobbled together some budget just as happened in previous years. But it won't solve any real problems other than getting the Legislators and state vendors paid.

As I've noted before, the one major "structural" problem in California's government is Proposition 13. We rely too heavily on volatile tax sources like income, corporate, and sales taxes. A greater share of government funding needs to come from property taxes. I've outlined previously how the Proposition 13 system should be revised,  as follows:

• Proceed to use the Brown Corporation Tax proposal;
• Cut the current Personal Income Tax to generate a third less revenue;
• Reduce the state sales tax back to 5% (from 6%); and
• Increase the Proposition 13 property tax rate from 1% of assessed value to 1½% of assessed value and put two-thirds of the revenue derived from the 1½% in a state special fund to fund education, from pre-school to graduate school, and to assure health care and day care for infants, toddlers, and all students.
• Remove property other than owner-occupied residential property from the assessed value near-freeze of Proposition 13.
• In the case of rental residential property, the assessed value should be tied to changes in tenants and rents paid by new tenants combined with appropriate renters tax credits.
• In the case of all non-residential property, the assessed value should be increased 10% a year until it is equal to market value.
• Restore and fund from property tax revenue the Williamson Act to conserve agricultural properties.
• Establish a spending cap (general fund and special funds, exclusive of federal funds and enterprise funds) that is equal to a 1990-91 as base spending year:
  • for spending other than spending for K-12 schools and prisons the base year adjusted by the cumulative change in the CPI and the cumulative change in population,
  • for K-12 school spending the base year adjusted by the cumulative change in the CPI and the change in the number of students attending all K-12 schools, and
  • for prison spending the base year adjusted by the cumulative change in the CPI and the change in the offender population, all more or less as described in the Republican proposal.

A spending cap would be critical. Californians, as historically reflected by state spending, lack the discipline to not squander monies in good revenue years. But there's virtually no chance the voters would overhaul Proposition 13.

The Brown Administration had its one chance to make history by presenting a balanced budget for California on January 10, a budget balanced on cuts. It would have been unacceptable to everyone. But no one would have been able to find a legitimate way around it. And he could have called for the voters to solve the revenue problem.

But he didn't do that. So the Republicans are the morons and we have another gimmick-filled problem budget from the Democratic majority. And we're all here in the Magic Kingdom....

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Addendum: Confirming my view that our State has become the Magic Kingdom, we have this in the LA Times:

"That's nearly $11 billion in new revenue that the Democrats assume will magically appear," said Senate Budget Committee Vice-Chairman Bob Huff (R-Diamond Bar). "That's a wand that Harry Potter would be proud to wield."

The coming shift in California politics, or maybe politics as usual?

In the June 2012 primary election Californian's have a chance to significantly alter their state government.

Some think that the voters made a significant change when they approved the California Top Two Primaries Act in June 2010 and the Voters FIRST Act in November 2008. Maybe. But what we do in June 2012 will determine whether we have the ability as rational voters to take advantage of the changes or whether existing interest groups will just simply adapt to effectively keep things pretty much the way they are.

The 2010 Top Two Primaries Act requires that candidates run in a single primary open to all registered voters, with the top two vote-getters meeting in a runoff. That seems radically different than having candidates run in party primaries with the winners in each party meeting in a general election.

I'm not so sure we Californian's have the political capacity to make this work for us. It isn't radically different from the recall election process that gave us Governor Arnold Schwarzenegger. And the first tests of the process in April didn't seem to offer much promise.

But one year from now we have a chance to make the two Act's work for us at the same time to create a viable State government.

The 2008 Voters FIRST Act established the Citizens Redistricting Commission giving it, not the Legislature, the task of handling reapportionment of State Legislative Districts in 2011. In November 2010 the voters added Congressional Districts to the task.

Last Friday the Commission released the first draft of the 80 State Assembly Districts of about 465,674 people, 40 State Senate Districts of about 931,349, and 53 Congressional Districts of about 702,905.

Whatever else one can say about the results, the Commission did its job as outlined in the Act:

The commission shall establish single-member districts for the Senate, Assembly, Congress, and State Board of Equalization pursuant to a mapping process using the following criteria as set forth in the following order of priority:

(1) Districts shall comply with the United States Constitution. Congressional districts shall achieve population equality as nearly as is practicable, and Senatorial, Assembly, and State Board of Equalization districts shall have reasonably equal population with other districts for the same office, except where deviation is required to comply with the federal Voting Rights Act or allowable by law.

(2) Districts shall comply with the federal Voting Rights Act (42 U.S.C. Sec. 1971 and following).

(3) Districts shall be geographically contiguous.

(4) The geographic integrity of any city, county, city and county, local neighborhood, or local community of interest shall be respected in a manner that minimizes their division to the extent possible without violating the requirements of any of the preceding subdivisions. A community of interest is a contiguous population which shares common social and economic interests that should be included within a single district for purposes of its effective and fair representation. Examples of such shared interests are those common to an urban area, a rural area, an industrial area, or an agricultural area, and those common to areas in which the people share similar living standards, use the same transportation facilities, have similar work opportunities, or have access to the same media of communication relevant to the election process. Communities of interest shall not include relationships with political parties, incumbents, or political candidates.

(5) To the extent practicable, and where this does not conflict with the criteria above, districts shall be drawn to encourage geographical compactness such that nearby areas of population are not bypassed for more distant population.

(6) To the extent practicable, and where this does not conflict with the criteria above, each Senate district shall be comprised of two whole, complete, and adjacent Assembly districts, and each Board of Equalization district shall be comprised of 10 whole, complete, and adjacent Senate districts.

The problem facing anyone with this job is the complexity of creating 80 Assembly Districts of approximately the same size regardless of criteria used, but when you are told not to consider political parties, incumbents, or political candidates it is actually harder - it's easier to create boundaries with the sole objective to assure the reelection of incumbent office holders.

The point is to get rid of Districts that look like this District (click on the image to see a larger version):

The current State Senate District on the left puts together the people of these two communities:

1. Compton (indicated by the marker near the top right), incorporated in 1889, has a mostly lower income population of 96,455, is still often thought of as a primarily black community though Latinos are the largest ethnic group in a city that used to be notorious for gang violence, primarily caused by the Bloods and the Crips, plus Sureños gangs that are allied with the Mexican drug cartels, though latest reports show that Compton's violent crime rate has been reduced by 30% over the last ten years due to significant efforts of the population to reduce crime.
2. Palos Verdes Estates (on the ocean), incorporated in 1939, is a high-end residential community of 13,438 (mostly white) with no traffic lights and relatively limited commercial shop areas masterplanned by the noted American landscape architect and planner Frederick Law Olmsted, Jr., which regulates community aesthetics and architecture through an Art Jury, a non-governmental organization which must approve any exterior alteration to any building, fence, sidewalk, or other structure; most residences and business buildings within the city limits have uniform Mediterranean red ceramic tile roofs and often feature architecture with column and arch motifs, resembling European coastal communities; a substantial amount of land in the community is planned and dedicated as undeveloped open field habitat, an extensive system of hiking trails, and road bike lanes and mountain bike trails with equestrian facilities and horse trails are nearby.

The new proposed new Senate District including Compton includes many communities of people of mostly similar ethnic and economic makeup. And the proposed new Senate District including Palos Verdes Estates looks like this (click on the map to see a larger version):

The proposed district includes coastal communities but the boundary had to wrap inland to get enough people - it includes Beverly Hills not Compton.

Was this a perfect solution? Given the criteria to place together populations which share common social and economic interests, in which the people share similar living standards, use the same transportation facilities (limo's), have similar work opportunities, or have access to the same media of communication relevant to the election process, one can say it is as near to perfect as one can achieve.

The process is not without results that are imperfect. It's interesting to examine the North Coast, the area that is currently contained in Assembly District #1 and California Congressional District #1. The graphic below indicates how the current Assembly, Senate, and Congressional districts compare with the proposal click on the map to see a larger version):

What you discover is that the current Assembly District and the proposed Assembly District are similar though the latter is geographically larger because of population shifts in California.

Then you notice that the current Senate and Congressional districts wander over to an area around Sacramento while the proposed districts continue down the coast line to the Golden Gate, including Marin County.

One could argue that Crescent City residents might have more in common as with those in rural parts of the Sacramento Valley than with those in wealthy Marin, but in fact when one moves progressively from the south end of the proposed new Senate District, many Marin residents have much in common with many Sonoma County residents who have much in common with many Mendocino County residents who have much in common with many Humboldt County and Trinity County residents, who have much in common with Del Norte County residents.

The Senate and Congressional Districts containing Marin residents will change substantially:

Whoever designed the current Marin districts did something "interesting." The current Assembly District is about the same as the proposed one. But Marin is included with a San Francisco Assembly District in its current Senate District while it's included with Santa Rosa to the north for enough population for a Congressional District - but not San Francisco.

The proposed new configuration has an interesting effect on San Francisco. While it's Assembly and Congressional Districts aren't changed, it finally gets to be in a single unified Senate District if the proposals are approved as is.

So it seems this all works out. But there is one area that is sure to be contentious - Santa Rosa and the area of Sonoma County immediately surrounding it:

Here's the odd thing. In 2000 Santa Rosa and it's surrounds was included in an Assembly District that included much of Napa County and over into the Sacramento Valley almost to I-505.

But it was included in the North Coast Senate District and in a Congressional District with Marin which was not in that Senate District.

The Santa Rosa situation remains odd. The proposed Assembly District is similar to the current one. But it is proposed to include the Santa Rosa Assembly District with an Assembly District that includes Lodi to create a Senate District. On the other hand, Santa Rosa is included in a Congressional District that crosses the Sacramento Valley including Yuba City and into the Sierra's including communities like Frenchtown.

The apparent first need was to reduce population of a contiguous coastline North Bay Senate District population by about 250,000 to make it a viable size.  In the end, there may be no way to avoid this kind of oddity because of population shifts. If combining this way promotes the stated goals in 90% of California while not promoting some political objective, then we probably are stuck with situations like this.

Will the voters that created this Commission support it publicly or will we have the usual government agency public hearings where only opponents turn out in large numbers? Can the Citizens Redistricting Commission stand up to hostile attacks from interest groups on its proposal? I hope so, because it is clear they did a credible job.

But the real question is will it be politics as usual in 2012 after the dust settles? When it comes to encouraging people to run for office and voting for independent-thinking candidates, we Californians don't have a very good track record.

The Cruel Illusion of the California Dream Early in the 21st Century

"Egalitarianism" is a political philosophy that states that all people shall have an equal standing before those establishing and exercising governmental power. It has always been the underlying philosophy of the California education system. Suddenly, it has become a problem which will be discussed here. But first....

The opening of the United States Declaration of Independence states ""We hold these truths to be self-evident, that all men are created equal...."

Considered one of the philosophical cornerstones of "The American Way", in 1776 abolitionist Thomas Day commented on that opening sentence:

If there be an object truly ridiculous in nature, it is an American patriot, signing resolutions of independency with the one hand, and with the other brandishing a whip over his affrighted slaves.

Americans, because they are people, have never supported egalitarianism in any broad sense meaning completely equal treatment by government. As opposed to accepting slavery, some unequal treatment ends up being "more fair."

For instance, most of us would resist conceptually the idea of a head tax as the sole means of supporting government. Yet it is the most egalitarian tax system. Get rid of the income tax, the sales tax, property tax, etc. Just bill every person who resides within the jurisdiction.

To get some idea of what such a tax might mean, it would require payment of about $3,600 a year from every resident (man, woman, and child) in California to support the State General Fund. So a family earning $40,000 a year consisting of a man, a woman, and three children would pay $18,000 a year. A single "dot-com" billionaire would pay $3,600 a year.

This would be an anathema to the American political left, which espouses a belief in egalitarianism but frequently opposes literal egalitarian policy proposals.

On the other had the American political right sees egalitarianism as as "an achiever's torment" which hates the exceptional person.

Which brings us to the California education system, or at least the funding of that system. It is the average-achieving middle class person whose condition most requires egalitarian education policies. But...

The other asserted policy interest is that of allowing a local district to choose how much it wishes to spend on the education of its children. Defendants argue: "[I]f one district raises a lesser amount per pupil than another district, this is a matter of choice and preference of the individual district, and reflects the individual desire for lower taxes rather than an expanded educational program, or may reflect a greater interest within that district in such other services that are supported by local property taxes as, for example, police and fire protection or hospital services."

We need not decide whether such decentralized financial decision-making is a compelling state interest, since under the present financing system, such fiscal freewill is a cruel illusion for the poor school districts. We cannot agree that Baldwin Park residents care less about education than those in Beverly Hills solely because Baldwin Park spends less than $600 per child while Beverly Hills spends over $1,200. As defendants themselves recognize, perhaps the most accurate reflection of a community's commitment to education is the rate at which its citizens are willing to tax themselves to support their schools. Yet by that standard, Baldwin Park should be deemed far more devoted to learning than Beverly Hills, for Baldwin Park citizens levied a school tax of well over $5 per $100 of assessed valuation, while residents of Beverly Hills paid only slightly more than $2. - Serrano v Priest [5 Cal. 3d 584]

In Serrano v Priest, the California Supreme Court called funding schools through a mechanism that favors school districts in wealthy communities "a cruel illusion" that essentially denies some children the resources of adequately financed schools.

Perhaps public education is the one policy arena where Americans at least pay lip service to the idea that every child an equal chance to achieve. And while a school having more money does not automatically make the education a child receives better, no rational person would deny that signficant differences in funding will result in an unequal opportunity for the average-achieving child. It may also affect special programs for the over-achiever and the learning disabled, but it may not. But significant funding differences will affect opportunities for the 80% in the middle.

The truth is, despite the nearly four-decades-old Serrano decision, California has not even come close to an egalitarian funding system for its pubic schools. In fact, in the past two decades the situation has become worse. Many richer districts have no trouble getting parcel taxes passed and receiving "voluntary" financial support from parents.

Comparisons have been done even though many anti-tax and pro-education elements oppose doing comparisons. These two are examples:

Following the failure of the Democratically controlled Legislature to restrain expenditures and save for rainy days in years like 2007-08 when revenues climbed dramatically, the California education system has already experienced major cuts in education funding and likely will see significantly larger cuts.

To prevent these cuts and to needle Republicans, Democratic Senate President Pro Tem Darrell Steinberg has introduced SB 653 which provides as follows:

This bill would authorize the governing board of any county or city and county and any school district , subject to specified constitutional and voter approval requirements, to levy, increase, or extend a local personal income tax, transactions and use tax, vehicle license fee, and excise tax, including, but not limited to, an alcoholic beverages tax, a cigarette and tobacco products tax, a sweetened beverage tax, and an oil severance tax, as provided.

Why school districts? Is it hard to imagine that local income and sales taxes to support school districts will result in the same inequities that the local property tax does? Is this really the kind of thinking that reflects the best of the California Democratic Party leadership?

We have already seen Governor Brown dump off onto local agencies the task of providing prison space. Now Steinberg is proposing to dump off the responsibility of equitably funding education to no one. He's proposing the Legislature abandon the State's responsibility for some semblance of an egalitarian approach to public education and leave it up to local school boards to figure out how fund education based on local financial resources.

In school districts located in affluent communities served by upscale shopping malls, presumably that could turn into a really good education system. In other areas, well who cares?

This reflects a California government system that shouldn't exist. It's a system that has been corrupted - not criminally corrupted, but corrupted in the sense that it is like contaminated milk. The whole carton needs to be discarded. We don't have a viable government; that is the cruel illusion now.

Which brings us back to the issue of the historical lack of policy leadership from Governor Moonbeam. Serrano v Priest was the significant policy issue when Jerry Brown took office in 1975. So was the runaway property tax revenue problem. These were two issues that together deserved strong policy leadership from California's Governor at that time.

But Brown wasn't a policy leader, he was a politician seeking photo ops, press notice at the personal level, and support for a second term. He got all three and four years later voters reelected him even though California government was headed for a long march to the chaos we see at the beginning of the 21st Century.

For Jerry Brown and "his brother" Willie were the elected public officials most responsible for abandoning California policy development to lobbyists, special interests, fear mongers, and idiots. And California always leads the way for the nation.

This leads us directly back to the Social Science Research Council American Human Development Project's "A Portrait of California" (Portrait) briefly discussed in the last post. This study using census data and other sources tells us clearly that what in the early 1980's columnist Dan Walters warned about the future of California has come true.

Instead of a California envisioned in the early 1960's by Moonbeam's dad, Governor Pat Brown, as represented by the goals of the California Master Plan for Higher Education of 1960 to continue the California Dream in the second half of the 20th Century, we got Moonbeam's leadership failures.

The Portrait describes Five California's that evolved in the Moonbeam era:

• Silicone Valley Shangri-La
• Metro-Coastal Enclave California
• Main Street California
• Struggling California
• The Foresaken Five Percent

The Portrait provides government service comparisons in what is called A Tale-of-Two's.

The Portrait explains some startling facts in important public policy areas:

• Health. Whites in California are living significantly shorter lives than Latinos or Asian Americans—nearly seven fewer years than Asian Americans and four fewer years than Latinos. Asian American women in California can expect to live up to 88.6 years, over 18 years longer than African American men.
• Education. 100 of California’s nearly 2,500 high schools account for nearly half of the state’s dropouts; residents of coastal counties are two‐thirds more likely to have a bachelor’s degree than those of inland counties; 45 in 100 Latino adults in the Los Angeles metro area never completed high school.
• Income. A gap of $58,000 in earnings separates the top earners in the Santa Clara–Cupertino, Saratoga, Los Gatos area (about $73,000) from the lowest earners in the LA–East Adams–Exposition Park area (about $15,000)—a gap double the median personal earnings for the country as a whole. California’s Latina women earn the least, at $18,000—earnings on par with those of the typical American worker in 1960, half a century ago.

Charts, of course, help visualize certain points:

In the case of the Portrait, what surprised me was the accuracy and bluntness of their conclusion which reads in part:

Public discourse around California’s future focuses increasingly on what’s wrong with the state, particularly its finances—titanic deficits, plummeting revenues, costly entitlements, and drastic cuts. The budgetary situation is grave, and clear-eyed realism is called for, to be sure; however, doomsday scenarios are not a useful starting point for rallying Californians around a new vision for the Golden State.

Yes, California—like many other states—has serious financial woes, caused in no small measure by a revenue free-fall fueled by tax cuts and a national downturn that hit the state particularly hard. California was already facing severe budget shortfalls on the eve of the recession in late 2007. The stage was set by Proposition 13, a 1978 amendment to California’s constitution that dramatically limited property taxes, previously the state’s largest and most stable revenue source. Decades of tax cuts then placed the state in an increasingly precarious budgetary situation—California had some $13 billion less in annual revenue in recent years than it would have had were those taxes still in place.1 Then the Great Recession arrived, pushing the state into the financial abyss. California’s 2010–2011 revenues, dependent largely on the volatile personal income tax, fell more than $40 billion short of the nonpartisan Legislative Analyst’s 2007 forecast.

I would only slightly disagree with one thing. In my opinion the stage was set in 1974 when the voters elected Jerry Brown their state's Governor.

The Portrait offers conclusions and recommendations that should be carefully read by Californians concerned about development of policy to improve the lives of most residents ... oh, and by Jerry Brown.

And just perhaps California Democrats need to elect leaders who were born at least after 1960 instead of before WWII (like Brown, Feinstein, Boxer and Pelosi) so that those born after 1990 may have some kind of future here.

The Cruel Illusion of California: "Moonbeam 1.0's" legacy and "2.0's" proposal for Californians

The Legacy of Moonbeam 1.0

Many folks are upset because of the Supreme Court's decision yesterday supporting a lower court's determination that California was running it's prison system so irresponsibly that the federal courts had to assume control.  As noted today by Sacramento Bee columnist Dan Walters in a piece headlined 1970s actions on prisons come back around to bite Gov. Brown:

By happenstance, Jerry Brown was governor as this socioeconomic tsunami crashed into California and played a central role in its political aspects.

The crime issue was especially vexing for Brown, a longtime opponent of capital punishment, and he responded by signing dozens of lock-'em-up anti-crime bills. Not surprisingly, the new laws and tougher attitudes by prosecutors and judges began raising the prison population.

When Brown became governor, the state had about 20,000 men and women behind bars and hadn't built a new prison in many years. By the end of his governorship, however, prisons were packed and corrections officials were begging for new space.

I do appreciate the fact that Walters is starting to call out each item Governor Jerry "Moonbeam 1.0" Brown left as a bequest to Governor Jerry "Moonbeam 2.0" Brown. (Keep in mind that Brown has said he likes the "Moonbeam" moniker.)

As anyone who paid attention during Moonbeam's first Governorship remembers, he was a political leader not a policy leader.

Back then he was busy getting his photo op associated with the burgeoning space industry funded and controlled by the federal government - in other words appearing "forward thinking" without having to be responsible for anything.

He expanded this into delaying highway construction under the guise of being a early "environmentalist" thereby literally causing the future deaths of thousands on dangerous unimproved highways. People loved it stupidly. The press covered him with equal stupidity.

At the same time lobbyists, special interests, fear mongers, idiots and anyone but the Governor, took over policy leadership. That was his legacy. Few get to inherit their own legacy, but it appropriately happened in this case.

This first year of Moonbeam 2.0 Brown had a chance to lead in policy development, correcting the problems created by his legacy. Instead, he is demonstrating that he really has no idea what public policy formulation is all about.

He wants to delay dealing with problems until someone else has to deal with it (the 5-year temporary tax increase) or dump off problems on others (moving prisoners to local jails).

Still, members of the press fawn all over him because he's "accessible," meaning he's a security team's nightmare - but why care about people responsible for you when you're a narcissist of the first order.

A narcissist is someone preoccupied with issues of personal adequacy, power, prestige and vanity. Yes it is possible for a narcissistic personality to thrive on attention derived from appearing to be a humble minimalist who lives in a $1.8-million home in the Oakland hills.


Moonbeam 2.0 Budgeting version 1.2

Moonbeam 2.0 this month released a second budget proposal for 2011-12 dealing with some "new" facts that indicate General Fund revenues are up.

With the proviso that there are some "formatting" and "accrual" differences between Brown's budgets versus past budgets and Controller's reports, the following reflects the 2011-12 Budget Proposal just released by Governor Brown:

I had been prepared to do a comparison to the Hans Christian Andersen tale "The Emperor's New Clothes." But it appears that the Governor's new budget isn't entirely a fiction.

The new budget may be a bit more tattered than someone taking an imaginative new approach to solving State of California's financial problems. But it doesn't leave us completely naked.

The big picture problems with the proposal are plentiful. Some of the projected savings in spending aren't going to happen in 2011-12, if ever. So cash going out could easily be $2 billion higher than the budget. Cash coming in 2011-12 could easily be anywhere from $3 billion to $6 billion less the revenue budget.

The new budget proposal reflects what was reported in the press as a surprise increase in revenue. When it was first "discovered" by the press covering Brown, I had hoped it was a surprise only to the press and public who apparently now do their research by reading tweets.

The Moonbeam 2.0 Administration had that information available to them prior to the budget presentation in January.

From July through December 2010, the total of cash received from Personal Income Tax, Sales Tax, and Corporate Tax was $3.8 billion (10.7%) greater than the prior year, mostly from Personal Income Tax. But the budget proposal didn't reflect that, a fact from which one might infer the Administration also was doing its research through Twitter.

Now in May the Moonbeam 2.0 Administration has proposed a 2011-12 budget reflecting a continuation of that growth in those revenues. The only problem is that from February through April 2011 those revenues are down $0.5 billion (2.2%) over 2010 which might reflect a different trend.

The Moonbeam 2.0 administration proposal is to increase spending above 2009-10 levels in education (really only K-14, which seems important to teachers unions and parents but mostly only to pay back monies "borrowed" from school districts in recent years), in prisons and jails (important to the prison guard union and the U.S. Supreme Court), and bond payments (required by law).

But this only leads us to his 5-year plan for Californians.


Solving problems created by Great California Slump - tax those with the least???

Though he has only been in office for five months, Moonbeam has conveniently changed his political message as he wanders around receiving the adulation of his followers while handing out misleading and incorrect information.

Until the first week in May, he told his followers that we need to extend the 2009 "temporary" tax increases to avoid catastrophe in our schools and among our poor. He got the teachers' unions and other supporters all involved in various ways to get those tax increase extensions. But then the "unexpected" higher revenue numbers from July-December 2010 seemed to have surfaced publicly.

Let's just ignore the fact that on January 7, 2011, I received an email from the Office of State Controller John Chiang about a report that said:

Compared to July through December 2009, revenues year-to-date were up by $3.8 billion (10%). This was driven by personal income taxes, which came in $3.4 billion above (17.9%) last year at this time. Sales taxes also were $343.8 million above (2.7%) last year’s total at the end of December.

Year to date collections for the three major taxes were $3.8 billion higher (10.7%) than last year at this time, with corporate taxes up $89.3 million (2.5%) from last year’s total.

It's obvious Brown's people didn't get that information in advance of Brown's January 10 Budget Presentation. But they did get it before preparing the revised budget this month.

So now Brown is now going around advocating his tax increase "extension" proposal as a means to rapidly pay down the debt the General Fund incurred in the last few years to replace revenue lost due to the Great California Slump.

Moonbeam places himself among the liberals and those concerned for the poor and the working class. Those tax increases are (1) a 0.25% addition to the income tax rate at all levels of income and (2) a 25% increase in the sales tax rate. Fundamentally, these are two regressive tax changes proposed for economic bad times. Why would he propose them?

Must we accelerate the repayment of that debt? No.

It is a good idea to use any unexpected revenue to pay off the debt. But while The Great California Slump continues, a proposal to increase taxes on the poorer among us should be generating vociferous opposition from the political left. Instead, the only negative voices come from the anti-tax crowd normally considered part of the political right.

Apparently Moonbeam and his followers fail to understand the relationship between tax policy and the plight of the victims of The Great California Slump. The state's economy is failing its citizens in complex ways.

Despite the recent dutiful reporting about increases in jobs,  the federal data for California is as follows:

This is the lowest April level of employment since 1999. It should be of some concern because nationally employment is higher than last year and above 2004 levels. Simply California's economy is not recovering.

And despite all the positive discussion to the contrary, the Bay Area - Silicon Valley IT job growth is not reflective in any way of a long-term permanent job growth trend. As noted in the most reliable available study:

Fueled by explosive growth in mobile and cloud-based applications, as well as federally mandated electronic medical records reforms, this surge has been driven in part by a wave of Angry Birds, smartphones, DropBoxes and compliance requirements. American businesses are crying out for tech-savvy talent.

We all know that this "surge" will be temporary and downsizing will follow in a few years. But the CEO's and other corporate leaders are the political bankroll for Moonbeam and Obama.

California has an economy problem. What we know is that the large jump in Personal Income Tax revenue in the latter half of last year came from the wealthiest segment of the population, not from the middle class or the poor. As noted in the San Francisco Chronicle:

"It looks like the upper-income taxpayers are having a greater gain in their income than previously anticipated," said Brown's budget director, Ana Matosantos, explaining the unexpected windfall.

Good news, budget-wise, for sure, but beware of this "dependence on the wealthy," warns Robert Frank, author of the Wealth Report blog in Wednesday's Wall Street Journal. It's the reason, he says, California and other states "got into this mess" in the first place.

Such dependence is exemplified in California, where the proportion of revenue collected from taxes on the upper end of personal incomes, including capital gains, stock options and the like, has grown to more than half of the total. Income from capital gains alone is projected to rise from $34.9 billion in 2009 to $60.4 billion in 2011, according to Brown's revised budget ( www.ebudget.ca.gov).

But that's less than half the $132 billion of capital gains reported in 2007, before the Great Recession, which saw such income and concomitant tax revenue reduced by more than two-thirds two years later.

In that Wealth Report blog post Frank noted:

Now, stock markets have recovered and so have the rich. It follows, therefore, that as the incomes of the rich are soaring again (all those Facebook billionaires and hedge-funders), so are their tax payments. As go the rich, so go the states. (That is simply fact: This is not to argue for lower or higher rates on the rich). Add to this the fears last year of higher capital-gains tax rates–which induced the rich to sell extra stock so they don’t have to pay more later–as well as Roth IRA rules and you get a new bulge in tax revenue.

The good news is that the revenue boom will continue–as long as stock markets hold. The bad news is that just as governments failed to recognize their dependence on the rich in good times, and failed to prepare for a bust, they have been too slow to realize the rebound of the rich in good times. Now they find themselves drastically missing their budget projections.

And rest assured, this boom in tax revenue from the rich will end just like the last one. And governments won’t be ready.

Perhaps Moonbeam's Administration was just "too slow to realize the rebound of the rich in good times." But if true, that borders on negligence as Budget Director Ana Matosantos is a carry-over from The Gubernator's Administration. She should have known exactly where things were at the end of December. (If nothing else, President Barack "Avatar" Obama should have told her since he knew these cool guys who he visits regularly were rolling in dough.)

The important fact buried in this discussion is that Moonbeam never understands the long-term impact of his failure to provide policy leadership.

Jerry Brown was Governor from 1975 to 1983 and Chairman of the California Democratic Party from 1989 to 1991. While Moonbeam 1.0 was studying satellite technology as Governor, columnist Dan Walters wrote a series of articles about what was really happening to California, which in 1986 he published as a book The New California: Facing the 21st Century. Moonbeam should have read that book.

In a column last week Walters wrote:

I quoted one academic study that saw "the possible emerging of a two-tier economy with Asians and non-Hispanic whites competing for high-status positions while Hispanics and blacks struggle to get low-paying service jobs."

Last week's release of detailed 2010 census data and this week's unveiling of a massive statistical study of Californians' educations, incomes and health confirm that what was theory in 1985 has become reality.

The study is "A Portrait of California". As indicated on the linked study home page: "This timely report introduces the ‘Five Californias’ to highlight the varied opportunities open to differing segments of the population...." The report is timely because it focuses on the current problems exacerbated by Moonbeam's failure to provide policy leadership during what was the most critical time for California State Government in the 20th Century.

It was in that time that the California Supreme Court first used the term to describe the "cruel illusion" of California government policy. It was in that time that Moonbeam 1.0 (and what is now the entire aging California Democratic establishment) essentially chose to ignore that original Court decision, the problem it described, and the cruelty of public policy it represented. Their preferred choice was to achieve and keep political office and in California that means catering to the prejudices of the upper middle class and higher income segments of the population.

These politicians and their followers were failing the people of our state as will be discussed in the next post. Since they still hold office, they could develop and institute public policy to eliminate "the cruel illusion" of California. They won't.