Today is the last day of the 2008-2009 fiscal year, and it is the final opportunity for the State Legislature to place on the Governor’s desk a comprehensive fix to next fiscal year’s way-out-out-whack budget before we are actually IN that fiscal year. By "comprehensive fix" — I mean a package of cuts and reforms that ensures that state government will be able to make it all of the way to June 30, 2010 without having yet another "fiscal crisis" where we are back at the cliff, again.
Governor Schwarzenegger has been 100% on message since the May 19th Special Election — we need a complete fix for the budget situation — one that does so taking into account that the voters overwhelmingly rejected tax increases to do so.
Legislative Democrats, unbelievably Sunday (in the Assembly) and yesterday (in the Senate) rammed through billions of dollars in illegal majority-vote tax increases for what appears to be the sole purpose of sticking the legislative "middle finger" up at California voters — especially since the Governor has and continues to make it clear that any legislation that hits his desk with tax increases will be vetoed — look for that to happen today.
Republican legislators need to keep the pressure on Democrat lawmakers who, understanding the world of politics, are under immense pressure internally. The public employee unions don’t just wield a big stick — they are swinging a multi-million dollar PAC baseball bat, and are prepared to make a pinata out of any Democrat who votes for comprehensive cuts. That said, they probably don’t have to bother swinging that bat because the liberal ideologues in the Democrat caucus are probably prepared to drive off of the proverbial cliff before they make the kinds of cuts that are needed.
I have written several times already about the inherent and perilous danger of "partial solutions" to the budget crisis — where some cuts are adopted, but cuts that fall far short of what is needed to make it all the way through the 2009-2010 fiscal year. Passing these kinds of cuts is a recipe for another show-down well into the new fiscal year, when the case will be made that the shorter time window make it far more difficult to make and implement cuts to state spending. Which is really the goal of the Democrats — partial cuts now — and then push for tax increases after the Summer. And why not? They’ve already seen Republicans who spent years vocalizing anti-tax sentiments cave in last February to massive increases in sales, income and car taxes. Why shouldn’t they hold out hope?
Republicans hold the strategic advantage right now. It is right now at this time and in this place that the argument has flipped from February, where it was whether Republicans will support taxes to avoid insolvency — to whether or not the Democrats will make enough cuts to do so. And believe me, the Democrats will do anything to "kick the can" into next fiscal year.
Which brings into play this issue of around $3 billion in available cuts to eduction in the fiscal year ending today that the Democrats, and at least as of three days ago, Assembly Republicans want to implement. I have spoken to many legislators who have said to me, "If we don’t take those cuts now, before the fiscal year ends, we’ll never be able to take them."
To those folks I have responded that there is always a reason to delay needed, comprehensive reforms. Today it is some education cuts, tomorrow it will be something else. Let us consider the effect of pushing through those cuts today (in a wonderful, happy show of bipartisan love). First and foremost, we will have "kicked the can" probably into the Fall on having to make cuts to avoid insolvency and the issuance of IOU’s. Understand that without this back pressure, the Democrats in the legislature WILL NOT produce comprehensive cuts. Also not that while $3 billion in cuts will have been achieved, what is the "opportunity cost" of pushing out the pressure for a real solution (the one that protects taxpayers)?
The biggest financial cost is that if the Democrats get even nine weeks of a breather, than means that over 1/5th of the call-in $17 billion in cuts that the Governor has proposed for FY 2009-2010 will have been lost. That’s around $2.5 billion in lost cuts — or nearly the entire amount "saved" by rushing into a deal today. Also, as I mentioned above, as we get into the fall, it becomes that much harder for cuts to be implemented in time to impact this fiscal year (nothing happens quickly in government — except implementing tax increases).
A number of the GOP legislators that I spoke or emailed with told me that it would be folly not to take the $3 billion in education cuts on the table today — "Cuts without strings? How can I vote against that? The next time I see cuts like this, they may be attached to tax increases!"
Mark my words, making partial cuts today, that do not solve the state’s entire FY 2009-2010 problem do come with "strings" — they come with emboldening the Democrats in Sacramento, and in moving the debate time and circumstances.
Every Republican legislator needs to remember what the political atmosphere was like in the State Capitol this past January and February. That is what you are inviting back into the process if you don’t hold the line against partial fixes and short-term "kick the can" cuts.
Unlike last February, we now have an opportunity to face this budget crisis with all Republicans united — legislators and the Governor. Let’s take that opportunity to accomplish a complete victory. We do this by keeping the pressure on for a comprehensive and total solution.
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