Negotiating For Cuts

By Keith Carlson | 05/08/09 | 06:44 PM EDT | 2 Comments

Latest posts from your county...

more »

As you know, the Assembly Republicans just switched leaders from Mike Villines to Sam Blakeslee.  The hand over does not occur, however, until June 1--which is after the Special Election.  This is significant as Villines is an open proponent of the Proposition Band Aids, the connected tax increase, and the February Budget deal in general.  His caucus, however, is not.  Nor are most Republican activists, or--if the polls are correct--just about any other Californians.  Jon Fleischman posted on FR yesterday that a delayed hand off is fine if for smooth-transition and/or "courtesy" sake.  I agree.  There is merit to making sure the new leader is fully up to speed and ready to go, especially given the trying situation he will immediately enter.

But my concern is that a delay beyond May 19th provides the continued appearance that Republican leaders support Prop. 1A.  They do not.  I hope Mr. Blakeslee and his colleagues who made the change make this point loud and clear:  Republican Assemblymen are overwhelmingly against 1A and the tax increase.  This transition delay should not dilute that message.  In fact, but for the disagreement over 1A, I doubt there would have been a transition at all.  The issue causing the change, Prop 1A and its tax increase, should not get continued support from the Republican leader if the leadership is changing because of that support, it's just illogical.  I have no inside info on why the date was picked as it was, I'm just hoping that the delay is not cover for continued Pro 1A agitating.

Post 1A, the new leaders, Blakeslee and Hollingsworth, will have their hands full with fiscal policy.  Our state's system is broken and nonsensical.  When the economy weakens it emphasizes the system's flaws.  Despite the complexity of the mess, and the enormity of the numbers involved, the options are pretty simple:  increase revenue (which will not occur with another tax increase, as tax increases will decrease revenues) or cut spending.  It is not feasible to think the Democrats would support legislation allowing revenue to increase (this sounds backwards, but it's true), because to do so would require passing business-friendly laws:  reforming the Labor Code and the numerous anti-work regulations that exist in our state--and maybe even, gasp, AB 32.  In short, the only way to increase revenue at this point is for the economy to improve and to create more non-government jobs.  Sacramento Democrats like that idea even less than cutting spending.  Spending cuts can be spun as Republicans attacking the poor, education, the environment, and apple pie.  Increasing private sector jobs is, well, less demagogue-able.

So we see this week that the Democrats' leaders are resigned to making "draconian" and "devastating" cuts after May 19th.  Draconian in the sense that they will have to shrink the over spending all the way back to the dark ages of California history:  2005.  For those of you who were alive all the way back then, do you remember how terrible life in California was?  Like a scene from "Grapes of Wrath" is how I recall 2005.  How in the world could we give up all the wonderful things our state government has given us since the pre-modern era of 4 whole years ago?  Maybe the Dem-speak is just trying to garner support for 1A as a scare tactic.

But, assuming 1A fails--which is not a given--the tactic is helpful to box in the Democrats in the upcoming Big 5 negotiations.  Our negotiators come armed with the knowledge that they will not need to talk about raising taxes. Here's what came from Speaker Bass just yesterday, as reported in the SacBee:

Assembly Speaker Karen Bass said today she sees little chance of the Legislature approving more tax hikes to balance the state budget between now and the start of the new fiscal year July 1, no matter what happens to several budget-balancing propositions on the May 19 special election.

"California, frankly, is going to be in a world of hurt," Bass, D-Los Angeles, told reporters in a teleconference from Washington. "It's really going to be about devastating cuts. I certainly don't have any illusions that come May 20, if the measures don't pass, that my Republican colleagues will come to the table ready to vote for any type of revenues."

Before that, her Senate colleague--Darrell Steinberg--confirmed the idea that taxes won't be on the table if 1A fails, also from the SacBee:

Even after the temporary tax hikes the Legislature approved in February, Steinberg said, the state is going to be short billions in revenue because of the poor economy.

He offered sober words for opponents of the ballot measures who consider themselves – as he does – "progressives" and argue that additional types of taxes could be enacted to rescue programs.

Even "if we had all the power" to pass more tax hikes, Steinberg said, the gap is so huge it's not possible to raise enough taxes to fill it.

"It wouldn't be right. It wouldn't be feasible," he said, and it would hurt the economy.

In negotiations, if your opponent is openly saying your worse-case scenario is off the table before starting the talks, your job gets a little easier.  Because of the Dem leadership's public statements, a No vote on 1A makes it virtually impossible for the Democrats to 'force' a tax increase on their Republican counterparts post May 19th--as they've publicly stated that more taxes won't happen.  If these statements are just a scare tactic to pass 1A, they are an 'all in' play, as they really block Dems from trying to negiate for taxes later.  They also make it impossible for Republicans to vote on a tax increase package, as the Democrats are already on record against one (thus, in the public's mind, it would be Republicans solely responsible for a tax increase after May 19th.)  So, a No vote on 1A blocks new taxes, will force a right-sizing of California government, and strengthens the negotiating position of the new anti-tax Republican leaders in Sacramento.  That's a:  Win, Win, Win.  

 

Print | Email | Share
 
 

Comments

 
How will California's local

How will California's local governments fare in this battle. Will there be police officers, fire fighters, building inspectors, and health workers when needed? Yes, local governments probably need to corral their unions and reduce costs, but they are actually required by law (no propositions required) to adopt balanced budgets...or go bankrupt. Regardless of whether or not the May 19 propositions pass, that state is talking about "borrowing" local funding - a one year fix at best. How many one year fixes before the entire system collapses. Every level of government needs to learn to live within it's means. Isn't that what we are all individually required to do?  

Submitted by Anonymous on Fri, 05/08/09 - 11:28 PM » | Print
 
 
The Sky is Falling

Everyone remembers the Henny Penny Nursery Rhyme, who proclaimed, "The sky is falling, the sky is falling."  This fantasy was further memorialized when Prop 13 was on the ballot.  The last time I looked, the sky was still there.

I don't see many local governments developing their budgets on an assumption that the current batch of Props will pass.  Most Councils and Counties are realists and do not deficit spend as is common to the Feds and State.  If areas must be cut and some will, they will not be critical Public Safety Programs.  In a worst case scenario, where the trickle down impact does  touch Public Safety, reductions will primarily come from support areas.  All law enforcement agencies have programs and positions that while being valuable to the mission, are not critical to the basic function of protection of life and property.  Cops have seen lean times in the past and excel at adapting, improvising and doing more with less.  This time in history will be no different.  

Frankly, I wonder how much more the taxpayers will take from the elected officials in Sacramento?  People are sick and tired of this inept bunch of career politicians, who if working in the private sector would have been unemployed long ago.  How about those folks who develop initiatives, propositons and recall drives getting to work on two areas which would send a strong message to Sacramento.  First, let's recall the Terminator Governor and send him back to making B grade movies.  Secondly, let's put the state legislature back on a part time basis like they used to be years ago.  This would eliminate career politicians and reduce the damage done.  If we don't do something soon, it may well be too late.     

Submitted by Ltpar on Sat, 05/09/09 - 01:58 PM » | Print
 

Post new comment

The content of this field is kept private and will not be shown publicly.
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
1 + 0 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.