A open letter from State Senator Loni Hancock to her 9th district constituents defines the problem plaguing California’s budget-making system, which in turn, is about to devastate our schools and cities. As she points out, it doesn’t have to be this way.
We begin the New Year with the real possibility of the financial collapse of our State government in February. As your State Senator, I want to share with you how I see our precarious situation, and what I believe must happen if we are to salvage the promise of California.
Two Defining Facts
1) The 2/3rds Vote
California requires a 2/3rds vote to pass a state budget. This is not how a democracy normally functions. California is one of only three states with this 2/3rds vote requirement. Forty-seven other states, the United States Congress, and every city, county and school district in California pass budgets with a simple majority vote.
The 2/3rds vote requirement has proved fatally dysfunctional for California, making it impossible in recent years to pass budgets on time or with transparency and accountability.
2) “The Pledge”
Every Republican Legislator, except one, has signed a pledge promising never, under any circumstances, to raise taxes for the things government provides – schools, roads, parks, clean air and water, fire and police protection. Their pledge is not to their constituents, but to Grover Norquist, the founder of the Washington, D.C. based conservative organization called Americans for Tax Reform.
Grover Norquist is the Republican lobbyist who is famous for saying, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” It is ironic that even though right-wing policies to deregulate, privatize, and cut taxes have been discredited at the national level and repudiated by the American people, Grover Norquist is poised to achieve his goal in California.
The Democrat’s Solution
The 2/3rds vote requirement and “The Pledge” held the Democratic majority in the State Legislature hostage for my entire term in the State Assembly. Year after year we have negotiated against ourselves about what to give up and give away to get enough Republican votes to reach 2/3rds. Year after year, budgets were late. In the end they were primarily based on cuts, accounting gimmicks and borrowing.
Now the gimmicks are used up, the national economy is in free fall and we can’t borrow anymore. No one will buyCalifornia’s bonds. In a fragile national and global economy, and with the 2/3rds vote requirement, investors say they do not believe we have a realistic way to repay the money.
Republicans continue to demand a cuts-only budget. Their proposed budget, released just before the holidays, proposed cutting another $10 billion out of education, making deep cuts to our already tattered safety net for families in need, and wiping out funds for public transportation.
The $18 Billion Solution
Both the Governor and the Legislature rejected the Republican proposal as posturing, while the Democratic majority presented the Governor with an ethical and rational solution to wipe out $18 billion of the $41 billion deficit. The Democratic package raises revenue by eliminating the gas tax, replacing it with other taxes that will not hurt the finances of the average working family in California (the State Constitution allows taxes to be raised by a simple majority if the result is ‘revenue neutral’) and puts in place a Highway Users Fee on gasoline that can be used only for transportation infrastructure.
It works. It keeps California solvent as we address the remaining $23 billion shortfall and negotiate a budget for next year. Our mid-year solution takes $2 billion from education, not the $10 billion in cuts proposed by the Republicans. The cuts made are devastating – but the school doors stay open and California lives to fight another day.
Where is the Governor?
Governor Schwarzenegger recognizes that taxes must be raised or the state will collapse. He has called for tax increases, many of which Democrats would support – including an oil production tax (of the 22 oil producing states in the United States, only California does not have a tax on oil production of any sort) and a sales tax expansion to cover some services. However, he has been unable to get a single vote from Republican legislators, and was denounced by the California Republican Party for recognizing the need for increased revenue if the state is to survive.
Now the Governor refuses to sign the $18 billion solution crafted by the Democrats. Instead he demands concessions on labor and environmental regulations and additional cuts in grants to the poorest people in California.
We Need 3 Changes in the Budget Process
California must adopt a simple majority to pass the state budget. Let the majority party negotiate a budget and be held accountable for that budget, like the U.S. Congress and all local governments.
California should adopt a two-year budget. The second year of the budget cycle should be devoted to program oversight and any needed adjustments.
Lastly, when the budget is adopted it should contain five and ten year projections of expenses and income, so advanced planning can be done realistically.
Time for Action
The Governor needs to sign the $18 billion solution. His other demands for concessions can be discussed and negotiated as we move forward to solve the $23 billion shortfall we face in June. If you wish to take a few moments to contact the Governor’s office to leave a voicemail stating your opinion, the number is 916-445-2841.
As always, I am so grateful to represent you and this district. I am determined to do whatever I can to maintain our state, and our Bay Area, as a beacon of hope, innovation and opportunity. I can be reached at 916-651-4009, and would like to know your suggestions and ideas.