Volume 1, Number 30
A new Legislature took office on December 1st. It was an exciting day, especially for the 25 “true freshmen” who joined the Legislature for the first time. All of these new members are in the Assembly.
I remember when I helped elect a new Assemblywoman from Sacramento County way back in 1978. She held her young daughter in her arms as mother and daughter both raised their hands to take the oath of office in December of that year. It was such a cute photograph that it made the front page of the Sacramento Bee, and we used it liberally in her reelection campaign.
I am quite certain that most of the new legislators who took their oath of office last week enthusiastically intend to do their best to govern with distinction. They know the challenges that California faces are great and they honestly intend to make the sacrifices that will be necessary to meet those challenges.
The enthusiasm of freshmen legislators is legendary. When Assemblyman Lloyd Connelly first took office back in 1982, he worked so many hours in the Capitol that he took to sleeping on the couch in his office. This was a double-edged sword. He became known as much for his rumpled clothes as he did his work ethic and intellect.
These new legislators are facing a state fiscal crisis of such gravity that Governor Schwarzenegger immediately declared that California is facing a fiscal emergency and called a special legislative session, the rules of which will require the Legislature to pass legislation addressing the emergency, or stop transacting other business until they do.
There are no easy solutions to erasing an $11.2 billion budget shortfall this year and an estimated $28 billion deficit over the next 18 months. Democrats are loathe to cut programs that are dear to their constituents, and raising taxes in the midst of a recession is foolhardy. Unfortunately, hardly any legislators are discussing the best long-term course to cure chronic deficits, which is to cut taxes. If history is our guide, cutting taxes will stimulate the economy and result in record revenues to the state.
Even as new legislators are posting family photos, finalizing the hiring of office staff and wondering what committee assignments they will get, vested special interest groups are already hard at work making sure that no real solutions to the budget crisis are enacted. At the top of that list is the Service Employees International Union (SEIU), the union that represents hundreds of thousands of government employees in California.
The SEIU State Council released its own budget recommendations the day after legislators were sworn into office. Their recommendations include no cuts in state spending. None. It’s a plan that is built on $14 billion in higher taxes, and $15 billion in federal bailout checks from Washington, DC. The SEIU has launched a television advertising campaign to support its plan.
First off, the idea that Washington is going to send California $15 billion to balance its budget is pure fantasy. One of the biggest reasons our current budget is out of whack is because the revenue assumptions built into the budget were so unrealistically optimistic that it was out of balance the moment the ink from the Governor’s signature dried. Imagine in your own household budgeting if you knew you were going to make $50,000 in after-tax income, but wanted to spend $60,000. So you pencil into the budget a $10,000 gift from good-ole Uncle Howie. Problem is that ole Uncle Howie has a lot of other nephews and nieces who also want money from him, including some cousins whom he likes a lot more than he likes you, and, besides, he doesn’t have the money himself to send to you even if he did like you best. Under the circumstances, the odds are high that you are going to run out of cash before seeing a dime from Howie. Well, Uncle Sam isn’t likely to bail out California any more than Uncle Howie is going to bail you out.
The idea of raising taxes on Californians just doesn’t make sense. The SEIU plan is to shield “middle income” taxpayers from the brunt (but certainly not all) of their tax increase proposals, missing the point that raising any taxes now will hurt economic activity and the tax revenues it produces. The SEIU calls for a “nickel a drink” tax on alcohol, new taxes on oil production in California, higher income taxes on those earning $250,000 a year or more (the very people we need to do well in order to generate tax revenues), extension of the state sales tax to entertainment activities and a massive increase in the state Vehicle License Fee on any vehicle valued at $20,000 or higher. It’s a ludicrous and irresponsible proposal.
As if these two prongs of the SEIU plan weren’t stupid enough, their call for absolutely no cuts in government spending is the most outrageous element of their plan. According to the SEIU, public programs cannot be, “destroyed by politics as usual.” The budget, apparently, has already been cut to the bone.
So as these many enthusiastic new legislators go about the serious business of balancing the budget, the public employee union that played a significant role in the election of many of them is telling their legislative allies that budget cuts should be off the table. We simply can’t afford to cut a single program or public expenditure.
Contrast the position of the SEIU that no program can be cut, with a cursory reading of the weekend newspaper:
• The state Integrated Waste Management Board, which promotes recycling and garbage programs, is now filled with three former legislators and Governor Schwarzenegger’s former scheduler, as well as two other appointees. Each member makes $132,178 annually and is required to attend only one Board meeting per month. That’s about $1 million a year in salary and benefits for political appointees who work part-time. Surely we could eliminate this Board and consolidate (and streamline) its activities with other resource management agencies.
• The University of California’s Office of the President paid $682,000 in severance payments to 16 people who then were hired in other positions within the University of California system. They got to keep the severance payments and several got higher paying jobs the day after being “severed.” In the crazy world of government accounting, the UC president’s office insists they are saving taxpayers money by offering voluntary severance payments to 155 people, reducing the president’s budget by $5 million a year. But why are government employees being paid to leave rather than simply being let go if we can’t afford their services? And aside from the 16 people paid to leave the president’s office who then went to work for another branch of the UC system, how many of the 139 other employees who were paid to leave ended up in other government jobs, or retired to collect a taxpayer-paid pension? Whatever this figure turns out to be, it should be cut from the UC president’s budget.
• California spends $15 billion (with a “b”) on 71 education programs called, “categoricals.” That is 30 percent of the $50 billion we spend on K-12 education. These programs continue ad nauseam, in good times and bad, whether they work or not, based on mandated spending forced on taxpayers by various interest groups. They deny school districts the flexibility to spend public resources on the education programs they feel work best. Funding for categorical programs should be eliminated so school districts can budget their own needs. Doing so could save taxpayers billions, while giving local school districts greater control over their own activities.
• California’s “First Five” commission was created by voters in 1998 and is funded by a 50 cent per pack tax on cigarettes. This program is arguably the biggest “feel good” boondoggle in California history. It spends $700 million a year on programs supposedly benefiting children before they enter kindergarten, but the program is rife with waste, abuse and bureaucratic duplication. In addition to paying for state commission activities, the First Five program funds separate commissions in each of California’s 58 counties. According to State Senator Sam Aanestad, some of the programs that First Five funds include, “subsidized cartoon shows, neighborhood parties and craft workshops.” Even if that description is somewhat exaggerated (which it largely isn’t) the programs funded by First Five pale in importance to other public expenditures, such as public safety, aid for the disabled and critical health care services. A new ballot measure should be enacted in a special election disbanding the First Five program and devoting its resources to the state’s general fund where legislators can put the money to better use.
Election to the Legislature is a high honor that comes with great responsibility. Legislators are going to be asked to make some tough decisions. Every new legislator brings enthusiasm to the job. Let’s hope they can match that enthusiasm with an equal measure of political courage.
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Gasoline prices are dropping like a rock. The national average for regular unleaded has dropped from a high of $4.10 a gallon in June to $1.80 now, according to the Energy Information Institute of the federal Department of Energy. In California, the average price is now at $1.96 a gallon, and falling.
I am demanding an investigation by government officials to look into collusion and price fixing, just as they did when gas prices were rising. If this free-fall in gasoline prices is allowed to continue, it is liable to prove that the marketplace does regulate prices. In a state so dependent on government overregulation, we simply cannot risk such a thing.
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