California

Twittering Budget Night

Joe Mathews — Sun, 15 Feb 2009 02:10:00 -0500

John Myers is doing the play by play via Twitter here. And you can check out the Assembly and Senate debate via the web at calchannel.com

There Is No Budget Deal Until California Voters Say OK

Joe Mathews — Thu, 12 Feb 2009 15:18:00 -0500

Want more proof that the initiative process is too powerful in California? All the recent talk about lawmakers reaching a budget deal is bunk. The deal, even if it passes, requires the voters to sign off on multiple ballot measures later this year. That's right -- California simply can't handle a budget emergency without a vote of the people.

Details have not been released, but I count at least five separate ballot measures that would be needed to complete this deal: 1. a measure authorizing the modernizing of the lottery and borrowing against future funds. 2. the approval of some sort of new spending limit that Republicans insisted upon in negotiations. 3. Changes to the state's education funding formula. 4. A measure permitting the state to raid money that voters approved for early childhood programs and 5. A measure permitting the state to raid money that voters approved for mental health programs.

Given the extreme costs of delays by the legislature, and their inability to do much without the voters OK, the real question is: why bother having a legislature at all?

What Happens When the Cash Runs Out?

Joe Mathews — Wed, 11 Feb 2009 20:54:00 -0500

Last night in LA, I moderated a panel with State Controller John Chiang, Barclays Capital managing director Peter J. Taylor (a public finance expert), and New America senior scholar Mark Paul on California's cash crunch. A report on what was said is here. One message: even if the tentative deal that legislators and the governor appear to have reached in the last 24 hours won't end the cash crunch. The state still has serious cash flow problems, said Chiang, comparing a state with a budget deal to an unemployed person who has suddenly found a job and income -- but still has to deal with the debts and bills he delayed paying while he was unemployed.

In Solidarity...

Joe Mathews — Fri, 06 Feb 2009 19:52:00 -0500

with California's state workers, who are being furloughed without pay today (and every other Friday) because of the state cash crunch, your blogger is taking the rest of the afternoon off. I'm sure they'll all appreciate the gesture.

Who Are California's James Madisons?

Joe Mathews — Fri, 06 Feb 2009 15:27:00 -0500

New America's Micah Weinberg, writing in the Mercury News, argues that it's time for Californians to think more precisely about what we want a state constitutional convention to produce.

California First 5, Meet the Terminator

Christina Satkowski — Thu, 05 Feb 2009 15:32:00 -0500

In a speech Tuesday morning about the state of education in California, state schools chief Jack O'Connell described the current condition of California schools as "precarious." He is hardly exaggerating. California's budget deficit sits at $41.6 billion, and O'Connell said education may be cut by $10 billion.

One program slated for the budget axe in Gov. Arnold Schwarzenegger's proposed 2010 budget is First 5, a program that funds a wide range of early childhood programs, including preschools, health services, and parent collaboration programs. The governor's budget eliminates funding for the state-wide First 5 commission, which has been receiving 20 percent of the money authorized for the First 5 program. (That allocation is used primarily for media campaigns and program coordination.) The budget also halves funding for the 58 local commissions, which are responsible for determining exactly where money should be spent and disbursing funds. The governor said he plans to redirect the $275 million saved by these cuts to other state programs that serve children.

This is the latest blow to First 5, a program that has struggled in recent years to retain credibility in the eyes of policymakers and the public. Indeed, this is not just about the fate of First 5, but about how to structure services for young children generally.

First 5 is the product of a 1998 ballot initiative, Proposition 10, and its star-studded campaign spearheaded by Hollywood magnate Rob Reiner. Proposition 10 levied a 50-cent tax on cigarettes, which now generates about $580 million a year for the state and local First 5 commissions.

Recent state audits of the program, however, found evidence of lax accounting and inappropriate spending. A 2006 audit found that First 5 dollars were going to finance extracurriculars like belly-dancing classes. Last year, the San Francisco Chronicle reported that some First 5 programs in the Bay Area used First 5 grants to pay for a Santa Claus costume and a trip to the Jelly Belly factory.

State Sen. Dave Cox, who introduced the legislation to cut funding for First 5, also criticized the program for hoarding funds and failing to demonstrate positive results of its programs.

Providers and beneficiaries of preschools and other initiatives funded by First 5 continue to defend the program, saying that a few isolated problems should not put millions of dollars for preschools and doctor visits in jeopardy. Still, given the audits' revelations and the salience of the accusations in editorial pages, it is not surprising that lawmakers tasked with finding excessive expenditures to cut -- especially a longtime critic of First 5 like Sen. Cox -- set their red pens on First 5.

We admit, it is a no-win situation. Cuts have to be made somewhere and the allegations against First 5 are troubling. But there is a bigger issue at stake here. The budget crisis that has forced First 5 to the edge of a fiscal cliff should also force policymakers to a much needed reevaluation of the complex patchwork of early childhood services in the state.

A recent report from the RAND Corporation found nearly a dozen programs in California that focus on early childhood education and development - including First 5, Head Start and the California state preschool program - but said that many are underfunded and have a long way to go on quality, especially instructional quality.

Californians have been notably finicky when it comes to state funding for early education. The First 5 initiative passed with narrow voter support in 1998, and in 2006, voters said "no" to a proposal for universal preschool. Gov. Schwarzenegger and the legislature followed-up with a proposal for a more modest, $50 million preschool program, which passed.

Comprehensive plans for education, including the 2006 "Master Plan for Education" and the recommendations of the State P-16 Council, which were released Tuesday with the State of Education address, include universal preschool and better birth-to-five programs. This is the right way to go.

State law requires that any amendments to propositions -- including Sen.Cox's budget cuts to Proposition 10/First 5 -- get final approval from voters after being passed by the legislature. That means First 5 may land on the ballot again, and any final cuts may actually be several months away.

If so, let's hope that instead of the severe politicization that has plagued early education proposals in California in recent years, the process prompts a needed discussion about the vision for early education in the state, and how programs like First 5 fit into it.

The Winchester Mystery State Government

Joe Mathews — Mon, 02 Feb 2009 14:34:00 -0500

I'm in San Jose this morning, at a bakery across a boulevard from the Winchester Mystery House, and thinking about state government. The Winchester, for those who don't know the story, was built over 38 years by a Winchester Rifle heiress, over 38 years. Bit by bit, she and her builders created a maze, adding room after room, fireplace after fireplace (there are 47 in all). creating a mystery box that's so big and confounding that you can't help but get lost inside. Whatever the reasoning behind each addition, the whole thing is madness.

Yes, as a metaphor for California's state government, the house is perfect.

One might think that a budget and cash crisis of the size that now faces this state would present an opportunity for reform, for simplifying a governing structure that surpasses understanding by all but the most informed citizen. The state's Rubik's cube system of education funding might be unscrambled, with a simpler system that ensures equal funding for district and tries to match money with needs. Overlapping boards and commissions might be eliminated. The state's crazy quilt initiative system mighty be brought under control.

But from what I'm hearing about the mostly secret and decidedly slow budget negotiations is that any solution will preserve California's Winchester-like governing system -- and perhaps add a few more rooms of complexity while they're at it. Too bad. The state desperately needs to simplify its systems so that they can be more easily monitored by citizens. Most of the reporters who did this sort of monitoring are gone, going, or simply too busy to do the kind of monitoring they once did.

See you soon back inside the house.

Eliminating 'Pay to Play' In Bond Measures?

Joe Mathews — Tue, 27 Jan 2009 16:41:00 -0500

This week in New Orleans, an obscure self-regulating board called the Municipal Securities Rulemaking Board (it's made up mostly of bond industry pros, but was created by Congress and is overseen by the SEC) is meeting to discuss how to deal with a persistent problem in state and local bond measures. Bond underwriters across the country (and particularly in California) often contribute to the political committees that support the campaigns for bond measures. When the measure passes, the bond underwriters who make contributions often end up handling the bond work.

There's growing concern about this sort of "pay to play" among big underwriters such as Citi, JP Morgan and Morgan Stanley. Already, underwriters are barred from giving to public officials who oversee bond issues. The proposal being discussed that week would extend the ban to donations to ballot measure committees. More details via The Bond Buyer. This seems wise. It's crucial that the ban have no loopholes. It should cover any firm or lender of any kind who might be involved in the bond business.

Department of Self Promotion: Essay on Books of California's Past, and What They Say About The State's Present

Joe Mathews — Fri, 23 Jan 2009 17:37:00 -0500

I have an essay in this Sunday's Los Angeles Times books section that re-reads classic journalism of California (Hinton Helper's "Land of Gold," Lincoln Steffens' autobiography, and especially Carey McWilliams' "California: The Great Exception") in the context of the state's budget deficit and cash crisis. The conclusion: California is often on the edge of fiscal cliff. In fact, our perilous finances -- and unstable governing system -- help define who we are as a people and a state.

Controller: California Voters May Decide Budget Stalemate

Joe Mathews — Tue, 20 Jan 2009 18:31:00 -0500

Add State Controller John Chiang to the list of California officials who believe that the way out of the budget stalemate may involve kicking difficult questions of taxation to voters. He told the San Francisco Chronicle in an interview that if Republican and Democratic legislators can't agree on budget cuts and tax increases, "they may at least be able to agree to let voters make a choice." The full story is here.