Sunday, December 11, 2011

The Great California Slump & The Bear Bones Era collide

Back in the spring of 2009 when I first started posting specifically about the looming financial problems of the State of California and its local governments, I had some belief that Californian's would wise up and head off the long term affects of The Great California Slump.

I apparently was too far out of touch with the voters, the state politicians, and the "smart" influential people.

As I noted in May 2009 (emphasis added):
In Grapes of Wrath, John Steinbeck told a story about how folks migrated to California to find hope within The Great Depression. We are now in what Time Magazine calls "The Great Recession" but California is not going to be a place to find economic hope.
By July 2010 I noted:
...The prevailing mantra is "let's just all ignore the fact that no reason exists to believe that the economy will improve significantly before 2015." California needs to acknowledge we are in a "Bear Bones Era", the first since the 1930's. And by "era" I mean at least a decade.

We needed a "statewide reality check" last year, before the State Budget was adopted. The situation is even more critical now.
So at the end of June of this year, 2011, when the Legislature adopted and Governor Moonbeam signed a "timely" and "balanced" budget, I noted:
...It's a budget predicated on significant revenue growth.

...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 adopted Budget provided for "Trigger Cuts" should the revenues fall short. So here we are at the end of November reading in The Sacramento Bee:

California would impose $2 billion in mid-year "trigger" cuts next month, mostly through K-12 school reductions, under a new revenue forecast issued this morning by the nonpartisan Legislative Analyst's Office. The LAO also said the deficit for the year beginning July 1, 2012 would be nearly $13 billion.

The analyst's report is not the sole determinant of whether the state will impose those cuts, but it is one of two tools the Department of Finance must rely upon before deciding whether to slash spending. The finance department will issue its own forecast in December.
On the same day The Bee reported:
Gov. Jerry Brown's finance director said Wednesday that some mid-year cuts are "likely," increasing the possibility the state will slash education and social services in the coming months.
The latter article also noted that State Legislative Analyst Mac Taylor at his press conference "seemed to discourage lawmakers from taking action to avoid trigger cuts in light of a nearly $13 billion hole staring at them in 2012-13." He was aware that desperation was increasing in the Legislature.

The problem is that next year is an election year for all members of the Assembly and half the members of the State Senate. What they are fearing is that more cuts might have a political fallout.

You see as noted by the Bee in a database "California school districts cut their teaching staffs by almost 25,000, or 8 percent, between 2008 and 2011."

Further, again as noted by The Bee, California is facing elimination "hundreds of state law enforcement jobs that lawmakers and Gov. Jerry Brown say must fall under the budget ax" and elimination 34 joint city and county major crimes and narcotics task forces around the state.

Related to law enforcement are the predictable results of the Governor Moonbeam plan approved by the Legislature to save money by shuffling prisoners off to county jails. Los Angeles District Attorney Steve Cooley, whose office generates one-third of California's felony convictions, is training his personnel to prosecute as many offenders as possible for the most charges available so they will go to state prison, not to LS. County jail. As noted in The San Francisco Chronicle:
In a recent interview, Cooley said he is trying to mitigate the "public safety nightmare" that realignment will bring - particularly in a county like Los Angeles, where the jails are overcrowded and the sheriff regularly releases offenders early.

"It is going to lead to an increase in crime, which is unfortunate, because Los Angeles is at a 60-year low," he said. "There is no place for them to serve their sentences."

Cooley and his senior staff said the office may take this training to other counties as well.
Two years from now we Californians will be blaming someone, anyone but ourselves, for the mess that will result from the "realignment."

And it will be the left side of the spectrum screaming louder than the right.

The only newspapers around the state to offer serious, fairly accurate evaluations of what will happen that I can find serve small counties, like the Eureka Times Standard. I don't know why this is. Maybe because the communities are in more rural regions, the newspapers aren't solely forums for politicians and overpaid talking heads.

Reporters talk to folks who are responsible for things - and maybe the latter are too naive to fear the politicians. For example read this article and a followup article in the Eureka Times-Standard.

What you learn is that the Humboldt County Health Department finds itself saddled with 12 "realigned" health care programs costing about $8.75 million, programs being shifted to a County Department that just experienced a $17 million reduction in funds this year. While these numbers are small when Moonbeam talks about billions, the financial situation is the same almost everywhere in the state.

What is more disturbing is that the Department is the one that provides health and mental health services to the County Jail and therefore will have to serve the increased "realigned" population. So the mental health of the "realigned" prison population will be evaluated and treated by folks who already don't have enough help. They'll be the ones evaluating who should be released.

This is happening all over California. What we learn from the followup article is:
Officials are hoping that Gov. Jerry Brown will make good on his promise to go to the Legislature with a constitutional amendment that will set aside funds for both realignment plans.

Erin Treadwell, spokesperson for the California State Association of Counties, said counties are hopeful that the Legislature will come through with some funding.
Of course that was before the Legislative Analyst "said the deficit for the year beginning July 1, 2012 would be nearly $13 billion."

Finally one can't help but note that some political fallout is coming from the Legislature having to nearly eliminate state tax funding of the two California university systems result in multifold increases in tuition and cuts in faculty pay. Protest by students and faculty have resulted. But the more significant facts are that the universities are admitting more foreign and out-of-state students that pay even higher tuition and a new survey says voters find that state universities get favorable opinions but they fear they are being priced out of the system.

Governor Moonbeam has prepared a tax increase ballot measure to fix things. It appears it could end up being one of many. But that's for a future post.

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