Marie,

I’m a bit surprised. This is a highly partisan piece. While I understand that you are a Democrat, it is inappropriate to lay the potential closure of state parks on the Republicans in the Legislature. (And, frankly, I have little respect for many of them either, but that’s another discussion.)

First, let’s acknowledge that the Governator is an idiot and his threat to close the state parks is reckless and stupid, but probably simply a political gambit to try to drive the Legislature into an uncomfortable corner.

Now the question is: How did we get into this mess and what do we do about it?

The fact is we got into this mess by consistent over-spending in every area of State government for at least a decade or more, much of it adding employees to the State employment roster and increasing their salaries and benefits. I can’t recall there having been a Republican majority in the Legislature during any of that time. The fact is we have elected and consistently supported a bunch of folks in the Legislature that have promulgated an unsustainable program of expenditures across a wide spectrum of governmental programs and activities without paying enough attention to the ability of our economy to support them. They have driven us to the brink of bankruptcy. If there is something we need to do, it is to get rid of that bunch. It seems to me that most of them were Democrats.

Just sayin’.

Now they propose, and you endorse, one of the most unfair and regressive tax measures conceivable to “save” our parks, the very ones that their prior policies have fundamentally undermined and their fiscal irresponsibility has jeopardized.

The flat $15 additional fee to the car registration tax asks everyone in the state to pay an equal amount to solve a problem they did not create. The guy who owns a 1990 Ford Escort pays the same as the millionaire who drives a 2009 Mercedes SLX. (Incidentally the increased tax on the guy with the 1990 Ford Escort who probably makes minimum wage and tries to feed and clothe six kids is possibly in the vicinity of 50% or more, while the increase in the tax on the guy with the 2009 Mercedes is probably less than 5%.) You ask the farm laborer who lives in Centralia and probably never visits a State Park, much less one on our lovely Central Coast, to pay equally to maintain a service or amenity that you or I might use twenty times a year. Yet, you don’t ask that hotel off the beach whose income and tourist business in fact benefits immensely and directly from the State Park system to pay a dime.

What are you thinking?

Neal Andrews

There is no such thing as closing a park. They can get rid of the park rangers and not clean the bathrooms or pick up the trash but the parks are still open for business. The parks will become a marijuana grower’s paradise, homeless help center, and hold some of the most epic parties of all time.
The police have a hard enough time catching people on public streets they have no chance of catching anybody who know the parks. It’s going to be a real safety issue for not only the citizens but the police.

The kids need a place to blow off steam after sitting in a classroom all day with fifty kids run by a teacher on anti-depressants. Closing the parks is right up there with the 911 fee in stupid ideas.

Neal, I will respectfully disagree here.

• Lower income folks who own cars are just as likely to use picnic facilities in state parks as anyone else. Maybe more so. They will quickly earn their $15 fee back in less than two visits. In fact, the day I was out taking photos at San Buenaventura State Beach, I saw lots of families out there. None of them were driving Mercedes. They were in older model sedans and compacts and came in multiple vehicles, all paying $8 a vehicle for one picnic. If anything, this may make our state parks MORE popular.

• Just like the City of Ventura has a revenue problem, which you have consistently acknowledged on the City Council dais, the state is faced with a great cash crisis caused by economic conditions. In the past 18 months, state revenues have dropped 27 percent. I have detailed here many times where the money has gone. Most of the increased spending has gone to prisons and voter-approved initiatives which were passed without identified funding to pay for them. For example, Republican State Sen. George Runner's Jessica's Law (Prop. 83), which he is currently in trouble over, costs the state $200 million annually and it is a failure.

You can lay the pension arms race in Gray Davis' lap for his great magnanimous gesture to prison guards. I won't argue there. But many of our current legislators weren't around then and that is something we will need to tackle with the help of our unions in order to save jobs. But that is NOT going to get done in the few short days we have until we start issuing IOUs.

• The minority Republican bloc who signed Grover Norquist's "No Tax Pledge" is inflexible, uncompromising and is single-handedly sending our state's credit rating into the toilet. I am surprised you would not speak up about this. Our state's rating was just downgraded once again over our inability to resolve these budget issues quickly.

• You will find few people out there who are more pro-business than I am. I have also just been appointed to the Visitor's and Convention Bureau Board and I am a great booster of our local tourism. This proposal will kill us here in Ventura and you know it. Do you have another proposal besides adding huge fees to our struggling hotels? Their employees drive cars, too.

• I believe we have a great moral imperative to not only make sure businesses thrive but also to take care of the weak, young and sick. If this means a small temporary increase in taxes/fees then I am in favor of it. It is wrong to cause the ruin of so many park-dependent businesses. The cites of Truckee and Lake Tahoe think this may devastate their towns. It is also wrong to dump nearly 1 million children off health insurance and shoot down CalWORKS.

You can be pro business and pro social safety net at the same time. And lately I do not see that from our state's Republicans. It is blind ideology and nothing else. I am completely disgusted.

I do thank you for posting and reading my blog. We don't agree here but we have other areas where we do see eye to eye.

Marie:

You miss Neal's point entirely..

During the last thirty years, most particularly the last six years, State budgets have been unbalanced structurally, unsound fiscally and unworkable politically. And while both Democrats and Republicans contributed mightily to this mess, it is a cold, hard, political fact that during the majority of this period, both houses of the State Legislature were controlled by the Democrats.

Worse, Governors and State Legislators, representing both political parties, made conscious choices to pander to ex-urban and suburban districts disproportionately populated by a then growing and politically potent middle, and upper-middle class of educated professionals.

They did so by promising them an ever-increasing suite of popular State services without guaranteeing a sustainable source of State funding for those very services. The State's funding is way too dependent on "boom and bust" sensitive taxes and fees to support this cornucopia of services. And worse, these same Democratic and Republican legislators who during boom-times doled-out what they knew would be temporary excess revenues to either increase these services and/or lower taxes, also gave out special interest tax breaks to political and economic elites who bankrolled their campaigns. Talk about cutting off the State's fiscal nose to powder their respective political game-faces...

Next, intended or not, the passage of Proposition 13 moved the locus of fiscal power from the cities, counties and school districts from our local communities to Sacramento. And since politics follows money, the non-elected bureaucrats in Sacramento exert a strangle-hold over more and more of the decisions made by city councils, Boards of Supervisors and school district boards of trustees. As Willie Sutton, the Depression-era bank-robber once said in response to the question why he robbed banks, "..Well, that's where the money is.." Well, until the recent mortgage melt-down and current recession, Sacramento is where the State’s money used to be, cause we all, willingly or unwillingly, sent more and more of our paychecks up their through the State’s Rube-Goldberg collection of taxes and fees..

Worse, due to voter-imposed term-limits, these non-elected bureaucrats in Sacramento are exerting greater and greater back-room control over the destiny of school children, disabled-persons, businesses, and entrepreneurs, driving them all towards mind-numbing stress, fiscal ruin and potentially life and death struggles.

Finally, and perhaps most ironic. “We the People” have contributed mightily to this by blithely passing mutually contradictory initiatives further constraining the ability our so-called elected representatives in Sacramento to practice creative thinking and adaptive management of the State’s resources in a 21st Century globalized world. After all, California is the seventh or eighth largest economy in the world. At least for now..

And lest any of the Lakinite Bloggers of Democratic persuasion react to this article as a Republican wolf in Democratic sheep’s clothing, I call their attention to the fact that my good friend Phil Angelidies, former California Treasurer and 2008 Democratic nominee joins with me in this noble effort to “Speak Fiscal Truth to Sacramento Political Power.” See for yourself, check out the URL above.

It's been too long since a governor and legislative leaders have spoken directly, plainly and honestly about the level of investments we need for California's future, the fairest way to pay for those investments and the real reforms required to right the fiscal ship. As of Tuesday, the case still had not been made. It's time to get back to work.

As the old Pogo cartoon reminds us, “..We have met the enemy, and it is us!” We elected these folks, passed these initiatives, and this is what we got. Until enough of us feel the pain, reformulate the civic-brain, and reform the political train, we will have to struggle mightily with these Sacramento Legends in their Own Political Minds to regain control over our lives, treasures and political destiny as a State.

NostraDemus

I think we just agreed more than we disagreed, ND. You backed up what I said about the initiative process and how it has obligated us to pay for things with no identified source of revenue.

These initiatives were voted on by the people and were financed by narrow special interests. I have said repeatedly here I do not like our state's initiative process.

Did you read Patt Morrison's interview with Karen Bass today? In reality the legislature only has control of about 10 percent of the budget.

The governor cut what is not locked in by initiative. Neal can call him an idiot. But those are the facts. CalWORKS and state parks are not under initiative mandates.

Now we tried to undo locked-in initiative spending with Prop. 1E in the May election and the majority voted it down. We tried it with Prop. 1D, too, but I was not in favor of that one.

Yes, our tax system needs an overhaul. The governor has appointed a commission which is working very hard at this. Go to this link: http://www.cotce.ca.gov/

And both Democrats and Republicans have approved over $100 billion in special interest tax credits to businesses since 1993. Angelides spoke of this in his piece.

My issue right now with the Republicans is that they won't acknowledge the harm a cuts-only budget can cause and propose no alternatives. Ironically, after they vote against all budget proposals because of added revenue measures, they go back to their constituents and boast about how they voted against cutting schools, too. I'd like to see them on record with a cuts-only budget.

Yes, it is a regressive tax, and yes, it will obviously hurt a minimum wage earner more that a millionaire ...but we're talking only fifteen dollars here! I agree with Marie...look at who is using the parks and you'll see a lot more Escorts than Mercedes! So in a sense the rich will be paying for something that the poor will use more...now that doesn't seem very regressive to me!

Also, Republicans love to champion the poor when it comes to tax hikes (oh pity the poor with these nasty regressive taxes), but don't seem to mind when services are cut that affectthe poor directly. Rather "convenient" don't you think!!

Neal,

I'm glad to see that you're so concerned with the regressive nature of the vehicle license fee in an attempt to save our parks. Then I presume you would be comfortable with a less regressive revenue enhancement? Please define for us what that might be.

Given that you were the only councilmember to vote against allowing a half-cent sales tax to be even allowed on the ballot in an effort to save Ventura institutions such as the Wright Library, and were deeply upset that the council did not take a stand by giving its own recommendation on it, I'm going to give you the benefit of the doubt that you would rather see a more progressive tax than the admittedly regressive sales tax in order to save our libraries. I'm going to assume you do not want to see them shuttered permanently even as the rich continue to get richer in this state, education fails, and the income equality gap continues to grow. Please do let us know which revenue enhancements you would be comfortable with either statewide or locally.

Now, to Nostademus' point on Democrats and spending: agreed, prison guards were given too generous a deal. Spending is most outrageous on prisons, where we spend more than New York, Florida and Texas combined. And yes, voter initiatives add new untouchable money to spend almost every year

BUT the problem is that California is too dependent on regressive sales taxes to fund its coffers, directly as a result of Prop 13. Also as a result of prop 13, ever since 1978 CA has required a 2/3 vote to increase revenues. We're the only state in the nation to require a 2/3 vote for budget and revenues. It's insane.

YOU COULD FIRE EVERY SINGLE TEACHER, FIREFIGHTER, POLICE OFFICER, STATE WORKER, PRISON GUARD, POLITICIAN, AND EVERY OTHER GOVERNMENT WORKER IN THE STATE AND NOT MAKE UP THE BUDGET DEFICIT. You cannot cut your way out of this.

Our taxes are only 17th highest in the nation, despite the massive infrastructure we have to fund, and the fact that we only get 79 cents back for every dollar we give to the federal government, to help support welfare Republican states like Alaska and most of the South.

We're the only oil-producing state not to have an oil extraction tax.

Our income tax bracket is the same between $45K and $1 million. That's freaking insane.

Disneyland still pays the same taxes on its property it did in 1978.

Our cigarette tax rates are in the bottom half of U.S. states.

The last budget gave a few large corporation $2 billion in tax breaks.

And rich in California just keep getting richer, and a bigger and bigger portion of the total pie every time. What tax increases ARE imposed are almost always regressive, which is absolutely infuriating.

THERE ARE TWO EASY SOLUTIONS TO THIS PROBLEM:

1) Get rid of the 2/3 rule that has helped destroy California's ability to fund its infrastructure through Republican intransigence on taxes, even though Republicans are a tiny minority in the legislature.

2) Eliminate paid signature gatherers for ballot initiatives, so that special interests wanting money can't buy their way onto the ballot.

Then the wide majority Democrats will be able to pass progressive tax increases to fund the state infrastructure, help close the widening income gap, and fund needed services.

California needs to get a job.

"YOU COULD FIRE EVERY SINGLE TEACHER, FIREFIGHTER, POLICE OFFICER, STATE WORKER, PRISON GUARD, POLITICIAN, AND EVERY OTHER GOVERNMENT WORKER IN THE STATE AND NOT MAKE UP THE BUDGET DEFICIT. You cannot cut your way out of this."

Please provide the math. Thanks.

Before the May election I saw local "progressives" going after the propositions. They undermined them one by one until they all fell together. Now they are upset that their favorite programs are being cut?

Maybe they should have thought about it before they urged people to vote no on 1D and 1E!

If it is so valuable to Ventura maybe they should fund it.

"YOU COULD FIRE EVERY SINGLE TEACHER, FIREFIGHTER, POLICE OFFICER, STATE WORKER, PRISON GUARD, POLITICIAN, AND EVERY OTHER GOVERNMENT WORKER IN THE STATE AND NOT MAKE UP THE BUDGET DEFICIT. You cannot cut your way out of this."

I'm just wondering if we didn't spend the money on teachers, firefighters, police officers, state worker, prison guard and every other government worker, what the hell did we spend our money on?

For the record, I voted for everything but 1D for reasons I detailed in a previous entry here.
In my opinion, the wrong propositions were put up on the ballot to be dismantled.

The City of Ventura just cut $11 million from its budget. I don't think it's possible for the city to take on the expenses of two state beaches, too.

Scott,

The math has been done. See here: http://articles.latimes.com/2009/may/24/local/me-california-budget24

And I quote (don't know if the HTML will work here):

"But there is also so much more.

The oft-cited waste and abuse is a problem, but the deficit is bigger than the entire state bureaucracy.

California could fire every state employee -- including those well-paid prison guards and university professors -- close every government office, stop all travel and even cease the purchase of paper clips without closing the budget gap. The government would be gone but the deficit wouldn't.

'When you have a budget gap of $20 billion plus, cleaning up waste and abuse just isn't going to fix it,' said Susan Urahn, managing director of the nonprofit Pew Center on the States.

The runaway spending is caused largely by an ever growing group of Californians making use of basic state services as the cost of those services escalates. Since Gov. Arnold Schwarzenegger took office, for example, the amount the state spends on Medi-Cal health insurance for the poor has grown more than 40%, from under $10 billion annually to more than $14.4 billion. Spending on community mental health services has nearly tripled, and the state's program that provides services for the disabled leapt from a $1.6-billion annual expense to nearly $2.4 billion.

There's an easy solution to this problem, and it's not to cut infrastructure, teacher salaries, and close libraries. The answer is to CLOSE THE FREAKING INCOME GAP AND GET A UNIVERSAL, NATIONAL HEALTHCARE SYSTEM. The poor don't just go away when you take away services. They become desperate, and the result is a huge increase in crime and lack of the ability to be educated.

It is abominable that the rich in the U.S. continue to get richer even as unemployment skyrockets, W2 income continues to fall, millions of middle class can no longer retire, and millions upon millions of Americans are forced to rely on the social safety net and government assistance to survive, even as we incarcerate even more of our most undereducated, desperate citizens.

None of these policies geared toward the rich are helping small business owners, either. I own a small business that's getting killed in this economy. Unless you make well into the six figures, you're getting screwed. But so many in the middle class assume that services to the poor are the problem. Look above you, not below you.

Hammock,

1D and 1E would have cut valuable programs to save about $1 billion of a $24 billion deficit. The last budget gave twice that away in tax breaks to big corporations.

Arguing that good programs are being cut due to a failure to pass 1D and 1E is either naive or deliberately deceitful. They were bad measures that wouldn't have saved us from where we are now, but would have made the problem worse over the long run.

David,

That link says every state employee, including university professors. Your post says every single teacher.

K-12 teachers are not often state employees, although most of their salary is funded by the state. There are a few exceptions, but for the most part they are employed by local school districts.

Your post is correct if you don't include them.

I agree that 1D and 1E wouldn't have fixed the problem, but they would have given the legislature more power to balance the budget. People that voted against 1D and 1E didn't trust the state legislature to spend the money on higher priorities.

David:

I didn't really see a math equation in the article. How much does the state spend on personnel expense, health benefits, and retirement?

Income gap? What is the appropriate level of income you propose the government allow citizens make?

Scott,

I haven't been able to find the actual math anywhere, though I'm sure if you dig deep enough at californiabudgetproject.org or elsewhere it can be done.

But let's give you the benefit of the doubt and say that you're right--that by firing the entire government and all its employees we might be able to just make up the gap. Don't you still see how counterproductive and ultimately insufficient shuttering libraries and reducing teacher salaries is? Sure, some waste can probably be cut--though there have been massive cuts already.

Ultimately, though, the problem is with the way the economy and tax system is structured, not with the government spending. There are too many people forced to depend on the safety net, and not enough contribution to it from the super wealthy who continue to get richer, and pay a lower effective tax rate than the poor.

The way to close the income gap is simple and universally known: progressive taxation coupled with decent wages enforced through a variety of mechanisms, most importantly strong private-sector unions. We used to have a 93% marginal tax rate on the highest incomes under Eisenhower. It was over 50% under Reagan. That has dropped to 35% today. Obama is called a socialist for daring to raise it to 39%. This is ridiculous.

It was this strong middle class created through new deal taxation on the wealthy, emphasis on jobs programs, availability of cheap education, and curbs on Wall St. that gave us the great economies of the 50s and 60s. Then people got selfish and didn't want to pay for it anymore, and wanted to get rich quick through houses and stocks. (Really, they resented the introduction of minorities to the job market and civil society in the 60s, leading the South to vote Republican and give massive giveaways to the wealthy.) The economy hollowed out, and now we're well on our way to becoming a third-world country of the super-wealthy and a huge number of poor, with a shrinking middle class.

Republicans like to claim that our economy will be destroyed by such policies. The truth is that these policies work great in Canada, where the middle class is strong. They work great in Western Europe, where the middle class is strong. They work great in Japan, where the middle class is strong.

America has been living high off its old economic and infrastructure developments and middle class creation, failing to maintain them while we went into massive debt on get-rich quick schemes involving housing and stocks, at the expense of W2 income. Europe and Canada and Japan chose to go with slower, more stable, more equitable growth, and are only in trouble now because they stupidly adopted our willfully irresponsible banking deregulations.

Or to put it another way, I will gladly give up any hope of owning 7 beach houses and 4 Maseratis, to ensure that I and the rest of society can have access to at least a solid middle-class existence. My inability to acquire 7 beach houses and 4 Maseratis will in no way detract from my incentive and desire to own 2 beach houses and 2 Maseratis.

Nobody needs the kind of disgusting wealth that is being amassed by the super-rich, at the expense not just of our poor citizens, but of our shrinking middle class as well. Canada, Europe and Japan know how to deal with this effectively, and we could learn some lessons there.

Sounds like Mr. Atkins supports the idea of government re-distribution of income through confiscation of wealth. I have to wonder if he would be willing to have his own income taxed at 93% in order to benefit people who less well of financially than himself. It is pretty narcissistic to demand from others what you are unwilling to do yourself. Gosh, there are literally billions of poor people around the world who don't have adequate food, shelter, medication, potable water, or education. Is David willing to have the government confiscate 9 out of every ten dollars he earns in order to help those less fortunate than himself?

He also appears incredibly naive when he says we should learn from Canada, Europe and Japan. Are you saying that there are no rich people in these countries? Last I checked some of the richest people in the world live in the countries you listed. All of those nations also have their own economic challenges, and many have experienced long periods of stagnant growth, with Japan being a good example. Among those European nations that Atkins admires, I recall France having riots in the street a few years ago because of the massive poverty and unemployment experienced by their Muslim minority population. France and many other European countries are also trying to reign in their massive entitlement systems that are causing huge fiscal problems.

With regard to taxation, Atkins needs to do his homework. The USA has the the 2nd highest federal corporate tax rate in the industrialized world. Combined U.s. federal and state corporate tax rates are just over 39%, compared to tax rates of 36.5 among G-7 nations, 30% for Asia Pacific countries, 28.5% in Latin America, 28.5% in OECD nations, and 25.8% in the EU.

He also ignores the fact that California already has the highest marginal tax rates of all states. Which is why his proposed solution to raise tax rates even higher is ridiculous. By comparison, Texas has the 3rd lowest state-local income tax burden in America, and they are just one of two states that do not currently have a structural deficit. Interestingly, it is the states that have the highest tax rates that are suffering through largest deficit and unemployment problems.

It was Winston Churchill who said, "For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle."

Why should I pay $15 so you can go to a state park? There are no state parks in my area, we have regional parks that I pay both property tax (percentage based) and parcel tax (dollar based) for the purchase and maintenance of. Plus an entrance fee, a dog fee, fishing license, and kayak inspection fee.

So if you want it, you pay for it! Don't tax me!

David you wrote:

"Or to put it another way, I will gladly give up any hope of owning 7 beach houses and 4 Maseratis, to ensure that I and the rest of society can have access to at least a solid middle-class existence. My inability to acquire 7 beach houses and 4 Maseratis will in no way detract from my incentive and desire to own 2 beach houses and 2 Maseratis.

Nobody needs the kind of disgusting wealth that is being amassed by the super-rich, at the expense not just of our poor citizens, but of our shrinking middle class as well. Canada, Europe and Japan know how to deal with this effectively, and we could learn some lessons there."

Are you using Marx's theory of surplus value to make the above determination? Please note, I'm not calling you a Marxist, but the above comment seems to herald back to theory of capitalist exploitation to me.

You sound like an educated person who does his homework, so please take my question as an honest attempt to serve my intellectual curiosity about your positions rather than trying to win a blog debate. I actually already know what I know, so I generally am more curious with other people's positions than my own.

Nostrademus, Bubba, Neal, and Marie - thoughtful posts.

Have a great Sunday everyone.

Scott

Marie:
We may agree on some of the elements of a broad description of the State’s fiscal problem, but we greatly differ on the composition, import and relative weight of the details of that problem and its optimal solution. And as the old saying goes, “..The DEVIL is in the details..”

For example, you quickly jumped to the last point of my post, voter approved initiatives tying the hands of the State Legislature. And you dismissed their value as having been financed by narrow special interests.

Well answer me this. You are a strong advocate of schools, teachers and students. Do you believe that all three of those groups, who were the bedrock of political support for Prop 48 which guaranteed K-12 education a certain percentage of the State Budget, without regard to changing economic circumstances, are a “Narrow Special Interest?”

Second, yes I read Pat Morrison’s interview with Assembly Speaker Karen Bass. And all I can say is, “She ain’t no Willie Brown!”

Regarding our Girly-Man Governator, in my book, both Neal and you are dead right. He is a fiscal idiot, and he’s proved it countless number of times. Most recently, by proposing to gut Cal-Works, which brings in $3 Federal dollars for every $1 State dollar that is spent.

Not to mention that since Bill Clinton and Newt Gingrich joined forces to create it the mid-‘90s, Work vs. Welfare type programs like Cal-Works have created hundreds of thousands of jobs, transferred people from welfare to work, reduced the cost of public assistance, and improved the lives of countless people in this State.

With regard to the State tax system needing an overhaul, it’s way past that. It needs a complete fiscal heart transplant, and arguably a complete reconstruction of the vascular system of revenue flow as well.

The State’s revenue blood-streams are blocked, clotted, and chock-full of special interest tax breaks and Rube-Goldberg tax diversion avoidance schemes. What’s worse, each of these problems alone would be bad enough, but the systemic effect of their hellish combination results in starving vital public investment decisions of the resource nutrients that they need to survive, let alone thrive.

And who passed all these fiscal rules of the game? You guessed it, the same group of State Legislators and Governor who have the temerity to ask working class families in this State to fund an ever increasing share of their fiscal malfeasance. Unfortunately, we’ve got a team of political practioners in Sacramento who are guilty as charged of fiscal quackery!

If ever there was a strong case for a class action taxpayer lawsuit against these bozos for Fiscal Malpractice, now’s the time. Are you listening California trial-lawyers???

Finally, you say that your issue right now is with the Republicans because they won't acknowledge the harm a cuts-only budget can cause and propose no alternatives. Well, I might agree with you, but evidently, the Obama Administration doesn’t.

According to published press accounts, a couple of weeks ago when a high-level delegation of California State Legislators, including Assembly Speaker Karen Bass and California Treasurer Bill Lockyer, visited Washington to make the case the as the eight largest economy in world, California, shouldn’t be allowed to fail, the Treasury Secretary Geithner, speaking with the full authority of the White House said “No.”

Further, Secretary Geithner allegedly told California’s officials that the Federal government was not going to do anything to help California right now, believing that the state should try to get its budget mess in order first..(Check out the URL above for details found in the Time.com story)

Well, notwithstanding the made-for-TV Kumbaya scenes showing Arnie and the President smiling and saying nice things about each other, it doesn’t appear that a Federal Bailout is heading Sacramento’s way. I guess the President’s “Yes we can” slogan, applied to bailing-out Wall Street, but when it comes to the huge fiscal problems in River City, he seems to be saying, “No we won’t.”

NostraDemus

Marie, you said, "You can lay the pension arms race in Gray Davis' lap for his great magnanimous gesture to prison guards. I won't argue there.".

I'm glad that you are finally beginning to acknowledge the pension problem, and, more importantly, what caused this problem. But I still find it troubling that you continue to make it sound as if it is limited to prison guards. The bill that was signed by Gray Davis dramatically increased pension benefits for prison guards, police officers, firefighters, teachers, and virtually all other public employees. This set off a wave of pension increases across all counties and cities in the state. I think it is misleading for you to single out prison guards while appearing to give a free pass to many other groups that were also granted lavish retirement perks. It is the collective growth in benefit costs for all of these groups that is contributing to our structural imbalance, rather than just one single group. The increase in pension costs for teachers is also one of the biggest fiscal problems facing school districts throughout the state. More and more money is being diverted out of the classroom in order to fund increases in pension benefits that have been promised over the past decade.

Aside from the problems faced by the state of California, I would argue that pension costs are the single biggest contributor to structural imbalances at the local level, and are growing at a rate that threaten to bankrupt our counties and cities. The recent decision by your local city council to approve a 50% increase in pension benefits for local firefighters was reckless and fiscally irresponsible, and will cost millions more than predicted. The County of Ventura has already seen pension costs increase by 327% in the past ten years to $140 million. But those costs are expected to double again within the next three years. Where will the county come up with an additional $100+ million per year by 2012? As another example, the City of Los Angeles is currently spending $660 million PER YEAR to fund their public employee pension plans, but those costs are projected to increase to $1.6 BILLION per year by 2014. How will the City of LA come up with the extra $1 billion per year?

This really should not be surprising. What else would you expect when you promise generous pensions and early retirement to public employees? Allowing police officers and firefighters to retire at up to 90% pay as early as age fifty is an expensive perk. Just search the databases of the thousands of California public employees who are earning six figure pensions and you'll begin to realize the magnitude of the problem. If you were to cost out the funding required to allow a single employee to retire in their early to mid fifties on a six figure pension and you'll find that it would cost millions per employee.

No doubt the liberals will blame all of this on all of those greedy corporations and rich people who won't pay their "fair share". They will lament about Prop 13 and complain that we will need a "balanced approach" to solving the structural problems that are of our own making. There will be more proposals to raise taxes on the wealthy, smokers, corporations, or pretty much any other group that can be easily vilified. We will hear about clever ideas to increase vehicle registration fees, park fees, gas taxes, property taxes, sales taxes, etc. There will also be emotional appeals for special sales and property taxes to fund schools and public safety programs.

Consider for a moment that this is the first year since 1938 that the State of California has taken in less money in taxes than the prior fiscal year. That means that for the previous 70 years this state has always taken in more money than the year before. Had the state simply limited spending growth to the combined rate of inflation PLUS population growth since 1990 we would be enjoying a budget surplus today.

This is not a revenue problem, it is a spending problem. It is time for us to live within our means. It is also time for us to reduce the size of government to a sustainable level, to renegotiate overly generous labor contracts, and to privatize some of these functions.

Marie, you probably don't remember, but California used to have privately operated prisons. Another history lesson is in order here. It was Gray Davis and the democrats that in 2003 ended contracts that allowed five private prisons to operate in the State of California. Incredibly, they claimed that ending these contracts would actually save the state million per year. It doesn't take a lot of imagination to realize that Davis was also swayed in part by the $3.4 million in campaign contributions he received from the CCPOA.

Bubba,

Do you have an early favorite among the candidates for governor that you think offers serious solutions to our problems?

Sorry, I've been out all day. Was at a fundraiser for Barbara Boxer, a lady I very much admire.

ND, I don't think the federal government should bail out California, either. We need to solve our own problems. And Boxer said this today, too, when she spoke. It is possible, but we all need to learn to compromise. And that is why I continue to be so angry at that certain minority which won't.

Yes, the education lobby is a special interest just like any other. Prop. 98 has the benefit of keeping the state's top priority in focus, but it also locks in funding.

Bubba, I knew if I used the "P" word here you would magically appear. I never thought we were as far apart as you did. But you're determined to paint me as an irrational liberal. One correction, though: the Ventura firefighters voted to postpone any pension boosts until 2011. I don't see them coming back with this as long as the economy is suffering. We'll have to cross that bridge when we get to it.

Any sort of pension reform needs to be done from the state level down and it should have the buy-in of union leadership with the focus on saving the jobs of their own. We've done that here in the City of Ventura in a small way. All our unions agreed to a 5 percent decrease in the form of either pay or benefits. This was done to avoid layoffs.

But it doesn't work to have just one city in isolation dramatically lower its employee benefits. You'll lose top folks to other cities which pay better. In all your extended verbiage here you've never once proposed a systematic and viable way to accomplish this.

Would you ask employees to contribute more? What are your feelings about CalPERS' smoothing plan? Wouldn't this help in the short-term?

Marie, I'm going to continue to drive home my point on public employee pensions so that people can understand that there is a direct relationship between unfunded pension obligations and the growing structural deficits that we are facing both at the state and local level. This has been a problem in the making for some time and I have been warning about it for years (Brian can certainly attest to that). The recent actions by the Ventura City Council to offer a retroactive 50% increase in pension benefits to some of the highest paid public employees in the nation was unconcionable, especially considering the economic climate, the fact that they didn't have the money to pay for it, and that it was totally unnecessary. The offer to delay the benefit increase is little consolation. Deferring the pension increase only delays the ticking time bomb but does not change the long-term fiscal consequences.

These pension plans were unsustainable even in the best of times. Our state already had problems balancing its budget even when the economy was strong and government enjoyed steady growth in tax revenues. All of this was being driven by the bubble economy, first the dot com boom and then the housing boom. Next up is the implosion of the pension bubble that will consume an ever increasing share of government budgets, crowding out funding for other vital programs. Services to the poor, disabled, elderly, homeless, and disadvantaged will all have to be slashed in order to fund bloated pension deals for public employees. Younger employees will lose their jobs or face cuts in pay and benefits in order to pay for the lavish benefits handed out to older employees. This has been coming for some time, and the economy only exposed it earlier than expected. It's no different than Bernie Madoff's ponzi scheme that collapsed earlier than expected due to the bad economy. Had the economy remained strong Bernie would have been in business for a few more years, but, as with all ponzi schemes, the eventual collapse was inevitable. It was just a matter of when.

So let's be clear, the real problem is not the economy. It is the level of unsustainable spending and unfunded commitments that were exposed by the economy. Blaming the economy for all of our fiscal problems is a smokescreen to hide the truth that we did this to ourselves. Cleaning up the problem will take tough decisions and leadership, something that is still lacking in government. There is no hope for us until we acknowledge the real problem and have the courage to actually do something about it.

Marie, with regard to the Calpers smoothing plan, I believe it is fiscally irresponsible and just another way for Calpers to assist politicians in avoiding tough decisions. Instead of facing up to the true cost of these unfunded pension obligations we are proposing more fiscal gimmicks to kick the can forward. Calpers already uses an unusually long 15 year smoothing curve (a five year smoothing curve is typical), and now proposes to extend that curve to 30 years. This really isn't any different than the "pay option" loans that were common during the housing bubble, where homeowners were allowed to defer mortgage payments in the short term with the hope that future appreciation would cover the increase in loan balance. We all know how that worked out. In this case, we are proposing a plan that will continue the practice of underfunding pension plans, while crossing our fingers in the hope that we will get bailed out by the stock market. But if stock market returns are lower than expected then the unfunded liability continues to grow and the eventual cost will be far higher than projected.

The sensible approach would be to start reigning in these lavish pension plans while contributing the funds needed to fully fund our existing commitments. Will this be painful? Of course. But instead we are resorting to yet another clever financing trick to avoid short-term pain by delaying the problem into the future. Don't forget that a 30 year smoothing curve would require that current pension obligations be paid by our children and grandchildren instead of paying for them now. And if long-term investment returns come in lower than expected the eventual bill will grow exponentially. Does that sound sensible to you?

Let's keep in mind that this is the same Calpers organization that actually recommended large pension increases to public employees in 1999, arguing that the cost would be minimal due to project investment returns. Turns out that the actual cost of those pension increases was FIVE TIMES what was predicted by Calpers as a worst-case scenario, and growing. This is the same Calpers organization that invested pension funds into risky investments, losing $80 billion over just the past 1-1/2 years. Pension funds are suppose to be invested conservatively in order to minimize risk, to avoid precisely the kind of massive losses recently experienced by Calpers. Also keep in mind that when Calpers loses money it is the taxpayers who have to make up the difference. This is the same Calpers organization that has a practice of using their investment portfolio to promote social causes, often venturing into risky, poor performing investments in the name of political activism. This is the same Calpers organization that recently awarded $4 million in performance bonuses to 58 employees involved with investments, despite massive losses in their investment portfolio.

Consider that in 1999 Calpers was projecting an average annual rate of return of 8.25%. How did they do? Over the ten year period from 1999 through 2008 they achieved an average annual rate of return of just 3.32%. This ultimately cost taxpayers billions more in additional contributions in order to make up for their wildly optimistic actuarial assumptions. Despite their poor history of projecting investment returns, Calpers currently still assumes an average annual rate of return of 7.75% going forward. That is higher than the projections used by the legendary Warren Buffett, who assumes a 6.9% rate of return for the Berkshire Hathaway pension fund, a fund that has significantly outperformed Calpers.

No, this is just another gimmick to avoid tough decisions and to shift pension costs onto future generations. Calpers, under pressure from elected officials, is deliberately setting their estimated rate of return unrealistically high in order to minimize required pension contributions. These are the same sort of financial games that have gotten this state into its current fiscal mess.

To answer Brian, none of the existing candidates have proposed any serious solutions to our fiscal problems. That is not surprising.

Bubba Kidd,

I don't believe your statement accurately reflects the level of detail and the big picture thinking of candidate Tom Campbell.

Please check out:

http://www.campbell.org/budget-policy/

After looking at it does he look like a candidate you would like to support?

Bubba, you act like California is alone in this arena. When you think about it, Social Security is an unfunded liability, isn't it? This is a national issue.

Our state's problems are very complex. In the past 15 years we've also given $100 billion in special-interest tax credits to multinational corporations, horse racing, wineries, pornographic bookstores, you name it. The LAO has clearly stated many of these are no longer serving a useful purpose.

In the last budget, they snuck through another nearly $2 billion. So we're giving deals to certain industries while "slashing services to the poor, disabled, elderly, homeless, and disadvantaged." We're also proposing to put those businesses dependent on state park visitors completely out of business. The proliferation of tax credits irks a certain segment of the population every bit as much as public employee benefits irk you.

Add this into this the initiatives we've passed that we cannot afford, an antiquated tax structure and debt on all the borrowing we've done.

Yes, we need to work through all these issues. But it won't happen overnight and certainly not in enough time to keep the state from issuing IOUs next week.

Going back to the topic of my post: It's a lousy $15 that can be recouped by the waiving of day-use fees any time you visit a state park. It's ridiculous that we are even quibbling about this.

BTW, the Assembly passed a majority-only budget tonight.

I happened to catch a bit of the debate last night in the Assembly. What I found interesting was the recent Democratic party defection of Assembly Member Juan Arambula and his comments about the budget.

I found an interesting article on this Assembly member's defection in the Fresno Bee. It's worth a read.

"They've tried to make life miserable for him, even while they talk of the Democratic Party's "big tent." Of course, they assigned him to a tiny office in the big tent for not rubber-stamping leadership positions. And they've tossed him off key committees for not always saluting the public employee unions that drive Democratic politics in Sacramento."

The article goes on to discuss the legislative realities Assembly member Arambula faced in the legislature as a Democratic member in the Assembly.

"There are genuine and entrenched labor interests -- CTA, SEIU and the rest of the alphabet soup of labor agencies -- and it's difficult to do anything without running into significant and well-funded opposition," he said. "The tentacles go all over the place. You can't get meaningful reforms without stepping on powerful toes."

I also like Tom Campbell and he has offered solutions for various problems affecting Californians. He is also leading in the polls.

Campbell is the only one out there offering up real, workable solutions. Newsom and Brown better get busy. Where is Jack O'Connell?

Back to post topic: my friend Chris Finnie (ran against John Burton for State Party Chair) talks about how the closure of the state parks will devastate her mountain community in Santa Cruz:

http://www.calitics.com/diary/9229/could-closure-of-state-beaches-sink-coastal-tourism

Her comments are at the end of my post.

Thank you to my friends at Calitics, the top progressive blog in the state, for promoting my writing and putting my piece at the top of their page on Saturday. The Strickland piece had last Sunday's page.

I am honored.

This directed at previous comment up above- Mark. Do you not travel, Mark? Our State Parks are for all our citizens. How provincial of you.

As the owner of two small businesses, I'm more than happy to pay the corporate tax rates, as well as the income taxes and other taxes that allow for the common prosperity that allows my businesses to function.

As to the surplus value of labor, without some ability to invest and profit from it, economies don't grow. But there is a balance between rewarding work and and rewarding wealth, and this country is WAY out to one end of that. W2 income hasn't risen versus inflation since the 70's, even as everyone knew that the only way to actually get by was by owning stocks, real estate or other investments.

That's crap. People should able to pay off their student loans, have a nice place to live, have kids, help put them through college and be able to retire based on a decent job--without the need to gamble on real estate or on the casino stock market.

Most small businesses and individuals don't need or care for Wall St. or the real estate market. We need decent wages that allow people a decent standard of living.

Tom Campbell? You people are really hilarious. Campbell will lose 60-40 in a Newsom v. Campbell election.

The echo chamber that runs in Republican circles is really amazing. You people have no idea the anger out there, and the frustration people are feeling as they watch the rich get richer, and their bosses lay them off as their companies sit on millions in profits, even as they go into foreclosure or go bankrupt with medical debt.

You people have gotten slaughtered in the last two elections, and you're going to get slaughtered again in 2010. But for the 2/3 rule, Republican sentiments in the state of California would be utterly irrelevant because of the tiny minority you comprise in the legislature, and the fact of the state electeds, all you've got is Steve Poizner.

And yet John & Ken and Rush Limbaugh rule your worlds, forcing you into ever more extremist positions.

Earth to Republicans: nobody thinks they're gonna get rich in the stock market or in real estate anymore. They just want decent quality of life, good schools, good medical care that doesn't cost a fortune. There are tons of responsible, educated small business owners like me who understand that the stupid corporate tax rate isn't NEARLY as big a problem as the fact that I can't begin to afford healthcare for my employees. I'd rather you doubled my corporate tax rate on BOTH my businesses and I got universal heatlhcare in exchange. It would save me and employees money.

And they want the super-rich to share the burden. That's what the polls say, it's what the focus groups say, and it's what the American people are going to get unless Democrats get weak knees and the people give up on politics in despair.

And good god, if ever I'm making $200,000 a year in W2 income *alone*, I'll be freaking THRILLED to pay a 50% marginal tax rate on it in exchange for the services that make a middle-class existence in this country possible.

And by the way, Bubba's numbers on tax rates are special pleading. Yes, America *officially* has a high corporate tax rate. But because of the number of loopholes and exemptions, the actual *effective* tax rate is far, far lower than on the rest of the industrialized world. Very few American corporations end up paying anything close to that rate.

And yeah, CA has a high marginal rate of 9.6% on income. It's regressive, since that marginal bracket extends all the way from those making $45K to those making $999,999. Absolutely preposterous. What needs to happen is that 9.6% needs to be lowered slightly for everyone in the $45K to $90K or $100K, and raised by stairsteps from there.

You can use all the "Marxism" and "redistribution of wealth" buzzwords you want. People don't care. In the latest poll on the subject, Americans were almost split 50-50 between support for "capitalism" and support for "socialism". You know why that is? Because you extremists have spent the last 30 years accusing anyone in America who supports policies that would be considered center-right in Europe, Canada or Japan of being a "socialist."

Nobody gives a hoot *what* you call it anymore. If you want to call Keynesianism "socialism" or "marxist redistribution", go right ahead. You'll do more (and already have done more) than the Left ever could to repopularize "socialism" as a valid saleable idea in the U.S.

People are voting for more taxes all the time. The successful cities have construction going on at the schools right now. I live in a city where we voted to raise our taxes for the schools. There are public schools with waiting lists to get in. Real estate didn't take that great of a hit. Communities with kids go up in value.

I heard Tony Strickland today. He sounds like he is teaming up with the Texans to destroy California. He is just giddy about the fix we are in. There is no sense of urgency to fix the problem.

We need to cut jobs, cut pay, and raise taxes. Who cares whose right anymore just fix the problems.

The $15 surcharge would essentially turn our State Parks into public parking lots, displacing out of town and especially out of state visitors. These visitors drive economies like Ventura's.
Why not raise the surcharge a little and make it voluntary? I believe Montana has had success with a similar program. Or sell statewide season passes? Seems there are many motivated people that would opt to save the Parks through one of these means.

David:

I'm glad there is a recognition on your part as to the importance of profits. Your earlier comments appeared to be going down a different path, which is why I posed a clarifying question.

Jeff:

Those are interesting ideas. I'll have to look into your Montana example.

Yes, Montana has a voluntary program, which would work here. Bottom line, we can't afford to lose the jobs that the State Parks bring to our communities.

It looks like the governor may be backing off this proposal now. Today will be interesting. I will post updates.

David, I am a True Blue Democrat, but unless I am missing something Campbell really is the only one out there with detailed policy statements. Newsom's glossing things over now.

The only policy statement of Campbell's that sounds really reasonable to me is going with open source for the state's computing.

But seriously, policy statements aren't really relevant to the governor's race. I hate to say that, because I desperately wish they were.

Ultimately, a Republican governor will side with the Republicans in the legislature. A Democratic governor will side with the Dems in the legislature.

Everything else, by contrast, is irrelevant window dressing.

David - This is why having a governor of a different party than the legislature (or Congress) happens so often - the people like checks and balance. The troubles are worse when there is complete control by either party - because there is no control over the spending and no "parent" to say no to the good ideas for which we have no money.

BTW- If Campbell loses the Republican primary to Foy, I would advise him to run as an independent. That's what California needs - a three way race with the hard left, hard right, and a brilliant social progressive/fiscal conservative in the middle. Dare I dream?

Sigh...newsom, foy and campbell = center-left corporate dem vs. Run of the mill republican vs. Psycho crazy jarvisite.

Centrism it isn't.

David-
I challenge you to spend actual time meeting and listening to Tom Campbell and I believe you will walk away with a different opinion. His comprehension of economic issues and ability to put forth credible ideas, his compassion for Africa, his discipline are just a few reasons I believe everyone should get to know him.
He is anything but a run of the mill Republican.