Flap’s California Morning Collection: June 13, 2011

Posted Posted in California, California Budget, Dana Rohrabacher, Flap's California Morning Collection, Jerry Brown

A morning collection of links and comments about my home, California.

This week the California State Assembly and State Senate face a Wednesday constitutional deadline to pass a budget. California Jerry Brown is looking for Republican votes for tax extensions and so far has not obtained them.

California Governor Edmund G. Brown Jr. provides an update on state budget negotiations as the June 15 deadline for a balanced budget approaches.

The question everyone is asking: will a Republican legislature sell out their party and no tax increase pledge?

Now to the links:

Jerry Brown offers state budget update in new video
Gov. Jerry Brown said in an online video Sunday that he wants changes in pensions regulations and state pensions to be part of a budget deal, but he still lacks the support from four Republican lawmakers to place those reforms and billions in taxes before voters this fall.

Brown said his plan “will put California’s finances on a firm footing for many, many years to come…but what we don’t have are the four Republican votes necessary to put it to a vote of the people of California.”

He did not outline what those policy changes would entail, but said he was “really perplexed at why a package of this magnitude and this permanence … cannot be allowed for you the people to decide on.

Brown posted the video to his YouTube channel Sunday, just three days before lawmakers are constitutionally required to pass a budget, to give his budget status report to voters.

This year, for the first time, lawmakers’ pay will be docked if no spending plan is in place by Wednesday’s deadline.

Brown plans to hold a Capitol press conference Monday with representatives from many of the various groups that have backed his budget, and the idea of placing higher vehicle, sales and income tax rates before voters, along with changes to state pensions and a limit of future state spending.

GOP attacks bill that would ease local tax votes

Now that Republican lawmakers have voted against a renewal of expiring tax hikes, Democrats are turning to another, more complex way to generate revenue.

A bill proposed by state Senate President Pro Tem Darrell Steinberg and narrowly approved last week would dramatically expand the taxing powers of local governments, school boards and other jurisdictions.

But the bill, SB23-1X, would lead to such a complicated latticework of taxes that opponents say Steinberg is merely pulling a stunt to ramp up pressure against Republican lawmakers.

The Sacramento Democrat said his legislation would give public schools and law enforcement agencies a firmer source of funding if lawmakers don’t come up with one directly.

It would grant sweeping authority to local governments to raise money, with voter approval, through taxes on income, vehicles, alcohol, tobacco, medical marijuana, soda and companies that pump oil in California.

Steinberg introduced his local tax proposal on Friday, soon after the defeat in the Senate of the main bill to renew temporary increases in the statewide sales and vehicle taxes that will expire June 30. It passed, but with only the bare 21-vote majority needed. One Democrat voted against it and three others abstained.

The bill applies to counties, school districts, community college districts and county offices of education. Critics said it would create a logistical nightmare of inconsistent tax policies that likely would be challenged in court and with a ballot referendum seeking to repeal it.

Redistricting: Rohrabacher says he’s staying put

With the release of a round of redistricting maps Friday, I mentioned that GOP Reps. Dana Rohrabacher, John Cambpell, Ed Royce and Gary Miller could be playing musical chairs.

Rohrabacher may be busy in the Middle East, but he found time to make it clear he doesn’t plan to look for a new district to run in.

The latest drafts throw Rohrabacher, R-Costa Mesa, and Campbell, R-Irvine, into the same coastal district (“OCCOAST” on the map). Campbell could run for the proposed Orange-Rancho Santa Margarita district instead – but Dave Gilliard, the consultant for Royce, R-Fullerton, says that Royce has been looking for a home in Orange and considers that the heart of his district.

If Royce stays in Fullerton and the new district surrounding that city, he could face Miller, R-Diamond Bar, since proposed map eliminate the GOP-advantage in Los Angeles County portion of his district. I’d give Royce the edge in that race, since Miller doesn’t live in the county.

Here’s the statement that came last night from Rohrabacher’s camp:

    Congressman Rohrabacher announced today that whatever the end configuration of the districts, he will be running in the area of Orange County that he has represented for many years.

    “I share a bond both philosophically and personally with these people. This is the area where people want limited government and personal liberty, which is something we share. I am raising my family here and feel very comfortable with the values of the people of this part of Orange County and they feel comfortable with me.”

    Rohrabacher believes there’s likely to be shifts in the proposed district lines between now and the election but points to his long standing relationship with the people of the area.

    “However the districts are shaped, I’m sure that the candidates and the voters will use this as a way of getting to know each other better. So we end up with districts that are more equal in population and voters who are more fairly represented.”

Enjoy your morning!

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Flap’s California Morning Collection Archive

Will California Become Another Michigan?

Posted Posted in California, California Budget

Dan Walters: Will California become another Michigan?

Has California’s recession-wracked economy finally bottomed out and begun to recover, albeit slowly?

Or has California become another Michigan, doomed to a semi-permanent state of economic malaise?

Gov. Jerry Brown adopts the former version in his revised state budget. He calls it a “modest drawn-out recovery” and cites “positive economic signs” such as a fractionally declining unemployment rate, growth in manufacturing and rising exports from the state.

But the budget also notes such negative factors as “weak housing markets (and) depressed construction activity,” and Japan’s devastating earthquake. And it says that recovery will be painfully slow, with non-farm employment not reaching pre-recession levels until 2016, nearly a decade after the recession began.

Yes. A Michigan without any manufacturing, since it has left for other countries or states, is my best guess.

Which young couple wishes to wait for housing costs to come down to a manageable levels while social welfare costs, including public education and prisons skyrocket because of illegal immigration?

California may see some slight economic improvement but unless structural budget changes occur and the attitude towards business becomes friendly, California = Michigan.

The population exodus of educated, productive citizens will only accelerate.

Video: California GOP to Governor Jerry Brown – Do Your Job

Posted Posted in California Budget, California Republican Party, Jerry Brown
Jerry Brown campaigned on the promise that he could bring both parties together and make the tough decisions now. Call Jerry and tell him to make the tough decisions now!

A hard-hitting ad by the California GOP that makes an apt point to California Democrats. Where have you been? Especially since they have had control of the California Legislature for decades and Brown has been around California politics for decades.

So, Jerry, why not negotiate with the Republicans and do YOUR job?

Rep. Eric Cantor: No State Bailouts and No State Bankruptcy

Posted Posted in California Budget, Eric Cantor, State Bankruptcy

House Speaker John Boehner of Ohio, right, looks on as House Majority Leader Eric Cantor of Va., speaks during a news conference on Capitol Hill in Washington, Thursday, Jan. 6, 2011

In other words, the state as soverign entities in the government will have to figure out their own fiscal solutions for budget shortfalls.
House Majority Leader Eric Cantor (R-Va.) issued a new threat against a federal bailout for ailing state governments Monday as GOP leaders girded for a confrontation with President Obama over spending.

Heading into Tuesday’s State of the Union address, Cantor showed no desire for increases in virtually any area of the federal government, and he doubled down on his opposition to new proposed spending on infrastructure and education, even in areas, like transportation, where he acknowledged there were deficiencies.

Cantor flatly rejected any changes in the law that would allow state governments struggling with record budget deficits brought on by the economic recession and rising pension costs to restructure debt, including allowing them to declare bankruptcy.

“I don’t think that that is necessary, because state governments have at their disposal the requisite tools to address their fiscal ills,” the majority leader said, before going a step further.

“I think some … have mentioned this Chapter 9 equivalent for states is somehow going to stave off some kind of federal bailout — we don’t need that to stave off a federal bailout. There will be no bailout of the states,” Cantor said. “States can deal with this and have the ability to do so on their own.”

As it should be.

In California, the Democrat Legislature and Democrat Governor Jerry Brown have the ability to balance the budget without either asking Washington for a bailout or defaulting on its contractual obligations through a state bankruptcy law – which would need to be enacted by Congess and President Obama anyway.

They just need to have the political will.

What Rep. Eric Cantor, the House Majority Leader is saying is: Man up =“States can deal with this and have the ability to do so on their own.”

Updated: Bankruptcy for the States – Just Say NO

Posted Posted in California Budget, California Budget Balancer, Jerry Brown, State Bankruptcy

California is always having a fiscal emergency because the Democrats who have controlled the California Legislature for decades spend and spend and spend. Bankruptcy for California is not the answer and I am amazed that it is being considered.

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

You know, I believe in political accountability and the states are sovereign entities as spelled out in the U.S. Constitution. If California or Illinois have a massive insolvency problem, then the states MUST solve them.

I mean, didn’t they cause their own problems in the first place?

A few weeks ago, the Los Angeles Times posted an online state budget balance calculator for readers to attempt to balance the California budget. It took me about 3 minutes. In California, Jerry Brown, the new and former California Governor and the Democrat dominated legislature can do likewise – if they have the political will.

A California state bankruptcy would stiff retired older workers and state/city/county bond holders immediately and have other long term effects without delivering the needed political will or reforms – to say NO to excessive government spending. Bankruptcy would simply delay the enactment of appropriate budgetary solutions – like cutting spending and prioritizing government spending.

BK would simply reset the clock for the POLS.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

All of a sudden, there’s a whole new risk factor, said Paul S. Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commissions Office of Municipal Securities during the Clinton administration.

For now, the fear of destabilizing the municipal bond market with the words state bankruptcy has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.

State bankruptcy is a bad idea.

If Jerry Brown cannot balance the state budget, have him call me – I’ll do it for him in about 3 minutes.

As far as an oversight panel for California, as a California voter I reject that idea. If voters don’t like what their POLS are doing, then WE THE PEOPLE will take care of the problem. If insolvency occurs, then the POLS have to go and we will elect others.

No federal bureaucrat or federal judge should be disenfranchising me or other California voters.

Just say NO to State Bankruptcy.

Update:


And, what is Hugh Hewitt pushing here?

Jerry Brown looks like he has begun the kabuki dance to the bankruptcy court by first ordering some cuts and then appealing to voters for a tax hike which will fail.  (Very few people believe that a tax hike will pass.  California is taxed out and any marginal burden will send high income residents and moire businesses fleeing.)

There is as yet no way for the states to file for reorganization, so Congress needs to hurry up.  I will ask Congressman John Campbell of the House Financial Services Committee about this today, but there is no other way to proceed except for a reset.  The Congress isn’t going to print money for the states to pay their union bills.  It is that simple.

Damn Hugh, let Jerry Brown do his job and make the necessary cuts. If the tax increases pass, then that is California’s problem.

I don’t see how a state default or reset, as you call it, will help anyone – except postpone necessary budgetary reforms.

Bankruptcy for the States – Just Say NO

Posted Posted in California Budget, California Budget Balancer, Jerry Brown, State Bankruptcy

California is always having a fiscal emergency because the Democrats who have controlled the California Legislature for decades spend and spend and spend. Bankruptcy for California is not the answer and I am amazed that it is being considered.
Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.

You know, I believe in political accountability and the states are soveriegn entities as spelled out in the U.S. Constitution. If California or Illinois have a massive insolvency problem, then the states MUST solve them.

I mean, didn’t they cause their own problems in the first place?

A few weeks ago, the Los Angeles Times posted an online state budget balance calculator for readers to attempt to balance the California budget. It took me about 3 minutes. In California, Jerry Brown, the new and former California Governor and the Democrat dominated legislature can do likewise – if they have the political will.

A California state bankruptcy would stiff retired older workers and state/city/county bond holders immediately and have other long term effects without delivering the needed political will or reforms – to say NO to excessive government spending. Bankruptcy would simply delay the enactment of appropriate budgetary solutions – like cutting spending and prioritizing government spending.

BK would simply reset the clock for the POLS.

Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.

“All of a sudden, there’s a whole new risk factor,” said Paul S. Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commission’s Office of Municipal Securities during the Clinton administration.
For now, the fear of destabilizing the municipal bond market with the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.

State bankruptcy is a bad idea.

If Jerry Brown cannot balance the state budget, have him call me – I’ll do it for him in about 3 minutes.

As far as an oversight panel for California, as a California voter I reject that idea. If voters don’t like what their POLS are doing, then WE THE PEOPLE will take care of the problem. If insolvency occurs, then the POLS have to go and we will elect others.

No federal bureaucrat or federal judge should be disenfranchising me or other California voters.

Just say NO to State Bankruptcy