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The Public Policy
Paycheck Protection, John Chiang Style
California’s controller has state Democrats between a rock and a hard place.
California Democrats have dominated the state’s legislature for four decades, and for years, backed by an amen chorus of newspaper editorialists, they have longed for the ability to pass state budgets by a simple majority. The long-standing two-thirds vote requirement meant they always had to make concessions to get a few Republican votes. Last November, however, the voters passed a ballot measure to give them what they wanted. It also gave them something they didn’t want: a requirement that they pass a balanced budget by June 15 or they wouldn’t get paid until they did.
They presented a sort-of balanced budget on time, employing the usual tricks of borrowing from off-budget funds, kicking some costs down the road, proposing bonds for others. Alas for them, the state controller, himself a Democrat, ruled that they had provided for only $87.9 billion in revenue to cover costs of $89.75 billion. Controller John Chiang intoned, “The numbers simple did not add up, and the legislature will forfeit their pay until a balanced budget is sent to the Governor.” (Sidebar: Governor Jerry Brown also vetoed that budget.)
The legislative Democrats customarily hate to discuss cutting spending. Every budget cut brings out wheelchairs, picket signs, angry teachers and prison guards and every other special interest that needs ready access to the state’s treasure. Public employee unions are easily the largest, most influential special interest group in the state and they claim a large share of the hearts — and pocketbooks — of the Democratic caucus in Sacramento.
Brown saw a solution to much of the deficit problem: call a special election so the voters could decide to extend certain temporary taxes set to expire on July 1. He would tell one and all that if they turned down the tax extension, various drastic cuts would be made to programs. He reasoned that the voters, forewarned, couldn’t blame the Democratic Party if they voted down the taxes.
It didn’t work out that way. The practical deadline for creating such an election has long since passed (the Republican caucus was solidly against it). Now, some Democrats are talking about creating “bridge” taxes to extend the ones about to expire, but the voters would have to ratify them in the November election. If they didn’t (and there is a very good chance they would not), there would be a mess to untangle. And several legal experts say the “bridge” taxes could only be collected after the voters approved them, in any case. If so, the “bridge” taxes wouldn’t do the Dems any good on July 1, when the new fiscal year begins.
The Republicans’ position is now that they will go along with a November election of this type, but only in exchange for specific public employee pension reform, probably a spending cap and certainly no temporary “bridge” taxes.
The beauty of the no-budget-no-pay rule is that many of these professional politicians need the money. Their work, such as it is, is entirely in the legislature. The answer is simple, though it’s not easy for the Democrats who are used to years of spending as if there were no tomorrow. Tomorrow is here. If they will come out from behind their rock and face the hard place; that is the need for pension reform and a spending cap, they may well get the Republican votes they need to pass a budget by July 1, in which case skinflint John Chiang will allow paychecks to go out to them again.
About the Author
Peter Hannaford was closely associated for a number of years with the late President Reagan, beginning in the California Governor’s office. His latest book is Presidential Retreats.
Letter to the Editor View all comments (30) | Leave a comment
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Bill Hussein O'Stalin| 6.27.11 @ 6:11AM
We should have a constitutional amendment requiring the same thing at the federal level. The U.S. Congress is full of lazy dopes who only care about their next payoffs.
oldfart| 6.27.11 @ 6:49AM
Amen to that - and they are subject to all the laws from which they exempt themselves. Specifically Social Security, at least five years to qualify for a pension, same medical care, etc. etc. etc.
Darin| 6.27.11 @ 8:22AM
The Democrats controlled the House, Senate, and White House 2 years ago and could not pass a budget. They could have passed a budget with zero Republican votes. After the 2010 midterms, the Republican house passed a budget but the Senate (still Democrat) did not. The White House proposed a budget but it was defeated 97-0. Democrats have adandoned their basic function of passing a federal budget for TWO YEARS. And yet they still take their time off and get paid. If an employee doesn't do a basic element of their job for two years, would you keep them around and keep paying them? Then why are any of these people still in office? WE, the American people, are their employers. They are paid with OUR money. Yet we keep voting them back. We have only ourselves to blame - now we need to fix it.
lydia | 6.27.11 @ 8:32AM
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Tomorrow...has arrived for California. The only question remaining is whether we Texans will have to help bail out the silly buggers with all their fads.
Harry the Horrible| 6.27.11 @ 9:26AM
Neah.
Senators should be paid by their state, at rates determined by the Legislature; Representatives should be paid by the Legislature from funds extracted from their districts. Same for their expenses, staffs, etc.
Gary| 6.27.11 @ 6:37AM
"Tomorrow is here" for the entire country because there is NO MORE MONEY.
Do you think the save-the-children chant from the public employee unions is starting to wear off?
And, don't you love it when they always threaten to shut off vital services instead of furloughing whole high rises full of bureaucrats pushing worthless paper back and forth?
Ken (Old Texican)| 6.27.11 @ 7:30AM
Tomorrow...has arrived for California. The only question remaining is whether we Texans will have to help bail out the silly buggers with all their fads.
Gary| 6.27.11 @ 8:30AM
One columnist recently wrote, "California is my favorite foreign country."
RCV| 6.27.11 @ 11:31AM
You Texans, Ken, better worry about your own ballooning deficit.
Ken (Old Texican)| 6.27.11 @ 5:05PM
Heh heh! RCV
That response was either entirely lame, or incredibly ignorant.
Fortunately, we in Texas are the beneficiaries of the California/midwest/New York "brain-drain".
You dumb communists, (pardon the shorthand), are going to have to build your own "Berlin Walls" to keep your productive citizens home.
Boeing is a prime example. The Labor Board is trying to keep Boeing behind the "Berlin Wall" and away from fellow "right to work" States.
We shall see.
RCV,
you communist folks are just about OUT of other people's money.
OH!
You haven't heard about Texas' "rainy-day fund" have you?
Texas actually has a several Billion dollar "savings account".
Instead of gobbling it up for one more election, our elected officials have chosen to tighten our public belts.
Sir,
you proclaim yourself to be an educated man. How can you be so silly?
(Actually, I understand you are NOT silly. I understand that you are yet another pig at the trough of communist government and its offspring. You hate Texas because of tort reform here. RAWrers can no longer drain our life-blood here.)
Sorry about that.
RCV| 6.29.11 @ 2:31AM
Ken, I never said I "hate" Texas, nor do I. Enjoy traveling there from time-to-time and have always enjoyed the warm, friendly people.
Texas' deficit problems are real, but I' m sure you'll weather them fine. Let us Californians deal with our own fiscal problems, which we will. And I haven't seen any of our productive, creative types leaving. Only unskilled people from dying industries. Every day I meet new young entrepreneurs, tech wizards, scientists and engineers, who continue to come to Silicon Valley, to Cal Tech and JPL, to our intellectual and cultural centers, to share the creative energy that thrives here, and can be found in few other places in the world.
Redstateboy| 6.27.11 @ 8:17AM
Social and Economic collapse brought about by Liber-ulism??? Alert the Media.
George S| 6.27.11 @ 9:15AM
Californians vote for Democrats to keep the gravy train going and then vote in ballot proposals to shield themselves from the taxes required to pay for it. The dysfunction is equally apportioned.
Pecos Pete| 6.27.11 @ 11:23AM
Watching California die is not pleasant, even if the death is deserved. Worse yet, the disease is spreading.
Pat| 6.27.11 @ 4:24PM
Pecos, as a Californian, let me say: “rumors of our recent death have been greatly exaggerated”. What the Conservative media doesn’t quite grasp is that Californians hate taxes just like Texans do, we’re just too weak spirited, as a people, to control our state government. And what often goes unreported is the politicians here don’t continually raise taxes and then spend their increased wealth – they borrow the money and spend their increased borrowed wealth. So why not just raise taxes instead of borrowing – saving all that interest on the debt? The primary reason is to keep their jobs – we vote out politicians who surprise us with increased taxes when our house prices are rapidly falling. So, the politicians’ time tested idea is to have your cake and eat it too through increased borrowing – we’re big on eating cake in the Golden State.
But you might also notice our federal government bears a strong “spend it all and then borrow some more” resemblance to California’s government – or perhaps it’s vice-versa. But the Democrat’s theory is simple, you borrow until times get better, saving all the hassle and ugliness related to honest government reform. With luck, their thinking goes, the economy will improve, the wealth will return and life goes on.
Only this time around, Pres. Obama and Gov. Jerry Brown are facing the same dilemma – the bird of happiness and the gecko of prosperity have fled this nation for foreign shores. No one knows when they will return home and they didn’t bother to leave a forwarding address. The voters in recent elections thought there was no real harm in electing mediocre, non-reformers like Obama and Brown – the weak in America have long mastered the trick to cannibalizing the strong – but what will happen when the last missionary has been eaten and only the cannibals remain?
CalMark| 6.27.11 @ 5:11PM
The problem with California is its Republicans "leaders" are among the most spineless, gutless political losers anywhere.
I've tried to get involved in politics. Alas, the California GOP is run by idiots who hate outsiders. Outsiders would rock the boat with actual ideas, talent, and intestinal fortitude, throwing the worthless CA Republican pooh-bahs overboard. Can't have that!
Case in point: the old witch who registered me to vote said I wasn't allowed to vote at the polls--I had to vote permanent absentee. Clearly voter fraud! The State GOP tried to hang up on me; the Solano County GOP Chairman acted like I was a nuisance and was happy with a worthless apology about "bad training."
California Democrats have ZERO meaningful opposition because GOP "leaders" are cowardly losers who want it that way. Until that changes, California won't change, either.
Gary| 6.27.11 @ 5:28PM
As a third-generation ex-Californian, I totally agree. The Republicans are worse than worthless. They fold under the slightest pressure and are sell-out masters.
Dave | 6.27.11 @ 11:39AM
Speaking of California's government and the state unions living on shrinking tax collections ...
Occasionally, it's helpful for guys like me to have facts and minutia broken down to their simplest form. Or as I like to call it, street level. First, and to all "dedicated" teachers, the ones forced to dog paddle in that big union pond, it should comes as no surprise that millions of friends and neighbors, the ones watching moths fly from of their depleting wallets, are beginning to get a little testy. Having been a member of two unions in my own working lifetime, I understand the pluses and minues of membership in organized labor. Unfortunately, over the last few state budgets, coupled with a Wag The Dog mentality, Reverend Wright's chickens finally came home to roost and the golden goose has now assumed fully plucked status. As it now stands in California, the majority of elected Democrats are still trying to coax the sheep inside for another shearing. At several capitol protests, many of them organized by the "Do You Know Who You're Messin' With" school unions, we often hear the chant -"WE'RE HERE FOR THE CHILDREN." Fair enough. And maybe they are. But if you've witnessed any of the protests like some I've seen, a lot of those children in the crowd are only there for two reasons: (1) To hold up a sign and (b) look underfed when the TV crews show up.
As California's future begins unfolding for June and Ward's great-great-grandkids, all the while whizzing through their own graying process, the chants should start sounding a different pitch. When that happens, the tones will shift a bit, but the message will remain: "No corte mis beneficios!"
Thumbing through some recent scorecards, here's a little of what's occasionally underreported. Overall student test scores from previous decades, the decades since the NEA (National Education Association) and their affiliates minions began slowly applying a Klingon submission grip to the pocketbooks of California taxpayers, the numbers reveal that while Johnny and Janine may get their high school degrees, they'll probably hit the highway still not fully understanding the concept of basic math and how it works. Or ...
How to pay for ...
(a) Unfunded Retirement Pensions.
(b) Unfunded Healthcare Plans.
(c) Cost of Living Increases.
(d) Mandates to Fund Classroom Space for Children of Illegal Aliens.
(d-2) Funding for bi-lingual education in Spanish, additional language programs for Asian immigrants and pending configurations of Farsi, Urdu and (maybe) Ebonics.
Meanwhile as Sonny once sang to Cher: The Beat Goes On ...
irish19| 6.27.11 @ 11:58AM
Love the imagery.
jumbojack9| 6.27.11 @ 1:47PM
Ditto
Rich D| 6.27.11 @ 7:17PM
On another site, I mentioned the present value of total government obligations (74 trillion), and a liberal responded with, "Does that include future years?"...ah, ignorance!
irish19| 6.27.11 @ 12:01PM
So the reps won't get paid until they submit a for-real balanced budget. And they can't seem to do so without either angering their owners (the public employee unions) or their nominal constituents (the taxpayers who actually pay the bills). How sweet.
Schadenfreude-it's what's for dinner.
Peter McGrath| 6.27.11 @ 12:17PM
The profligacy of the State of California is a group phenomena whose origins lie in the appalling urban squalor of its large cites (Los Angeles, San Diego, San Jose, and San Francisco), the corruption of its ruling class by government employee unions (whose dues are indirectly paid by all state taxpayers), and the credulity of a poorly educated, indolent, rootless voting population whose numbers continue to grow.
Improving any one of these deleterious conditions would be Herculean, an almost impossible, task. The election of Jerry Brown (!?) demonstrated that California is incapable of addressing any of its core problems. Hence, California is on an irreversible course of decline.
Anyone still living there who is educated and capable needs to get out, soon. The bullseye target on your family - painted by corrupt pols and bureaucrats kept in power by union dependents and those otherwise relying on government largesse - could not be more obvious.
California - The Failed State, rapidly devolving into socialist anarchy.
Martin Owens| 6.27.11 @ 12:32PM
There’s not going to be a budget- just another cover-up. In the most fundamental sense , there can’t be a budget. The “progressive” mindset simply refuses to acknowledge any restraints or limits on their ambitions to remake the world in
their own image. Any concession they make towards fiscal sanity is therefore temporary and tactical, to be made up with interest later on.
If you gave California’s legislature $1 trillion today , it wouldn’t do any good. By this time next year, they would not only have spent every penny, but committed the state to new, and of course, unfunded entitlements, programs, guineas, and giveaways of at least $2 trillion.
Whereupon they would once more circle the wheelchairs around the Capitol building and send up piteous cries to heaven, about what heartless bastards we all are, for not giving them $3 trillion in the first place.
These people are a bottomless pit, and there is no reasoning with them.
gary siebel| 6.27.11 @ 1:49PM
Lydia -- you are barking up the wrong tree. I am sure you can easily find a lesbian in NY to marry you and get you your green card.
btw... notice how the attention has shifted away from the Walker failure in Wis to the potential Brown success in Ca.
A Balrog of Morgoth| 6.27.11 @ 6:21PM
Uh, sure. That's what's going on or something.
Ore Gone| 6.27.11 @ 2:32PM
California needs to fail in order for our republic to work just as GM should have bit the dust. Bad ideas and policies need to go away and be replaced with good ones. That is the true meaning of progress not this socialist failure being pushed up our bums.
Ernie Banks| 6.27.11 @ 3:13PM
The Republicans are doing the Democrats a favor. Without pension reform and a spending cap, a tax increase would almost certainly be defeated in November. The only way it might pass is if the Democrats agreed to a package of reforms to accompany the tax increases.
weddingdresses | 6.29.11 @ 5:27AM
California needs to fail in order for our republic to work just as GM should have bit the dust. Bad ideas and policies need to go away and be replaced with good ones. That is the true meaning of progress not this socialist failure being pushed up our bums.