With warnings from State Controller John Chiang that if something isn’t done about the state’s out-of-whack finances that state government will soon literally run out of operating funds, and State Treasurer Bill Lockyer making it clear that if imminent action isn’t taken soon, even with massive cuts there won’t be time to do the financing that the state would typically need to do this summer to pay its bills – you can be sure that the Democrats in the State Capitol will do something.

If their rhetoric and lack of action on substantive cuts in the Joint Budget Conference Committee are any indicator, despite the overwhelming results of the May 19th Special Election and a repudiation of tax increases, you can bet that Democrats are going to look to raise taxes – perhaps with “majority vote” fee solutions that are, in fact, tax increases that seek to end-run Proposition 13’s 2/3 vote requirement.

What does this mean? Well, it means that before we see a real “all cuts” solution to the state’s massive overspending-created woes, the Democrats are going to see if Governor Schwarzenegger means what he says. The Governor has made it abundantly… Read More

Here are a few simple questions for you.

Do you love California politics? Do you obsess over following the daily goings-on of California politics? Do you love the FlashReport? Do you think state government is too big and spends too much? Do you wake up early?

If you answered yes fives times in a row to the questions above, then we may have a place for you in helping out with putting together the FlashReport!

If I have have piqued your interest, drop me an e-mail.

Jon Fleischman Publisher, FlashReport… Read More

Over my objections, the BoE voted 3-2 to sponsor a bill that would make it extremely difficult, if not impossible, for non-wealthy taxpayers to sue the government. The back story to this is the BoE recently lost a case in Superior Court. The judge awarded attorney’s fees to the plaintiffs because the Board’s position was so unreasonable the judge ruled the case involved the enforcement of an important right affecting the public interest. The judge ruled the BoE must pay the plaintiff 1.5 times a reasonable fee, which he found in this case is more than $600,000. Before it got to this point I repeatedly argued we needed to settle the case, but the Board’s Democratic majority would only listen to the flawed legal advice we were getting from our legal department.

On Tuesday, the same lawyers who previously insisted we fight this case brought before the Board a bill idea to eliminate the current system for recovering costs and replace it with an exclusive standard that raises the bar so high for fee recovery that it will preclude non-wealthy taxpayers from bringing actions against the Board. Attorneys will not be willing to take a case for a regular taxpayer… Read More

From today’s Wall Street Journal Political Diary E-mail…

Terminating the California Income Tax

… Read More

Line of the Week… All due respect to the City of Escondido, but I simply can’t pass this one up. At an event for Senator Dennis Hollingsworth in La Mesa on Thursday night, a few folks were talking about Governor Arnold Schwarzenegger’s announced appearance in Escondido the following day for a "budget presentation." The buzz was that the event, tobe held at the city’s large California Center for the Arts, would include a "special" announcement. Given Arnold’s stated budget solution to sell off the Del Mar Fairgrounds, the Los Angeles Memorial Coliseum, and several other properties of note, one quick-thinker couldn’t resist a conjecture:

"Maybe the Governor’s going to announce he’s selling Escondido to the Chinese to make a few bucks."

Oh, to be fair, at least to Escondido, here’s what Arnold did discuss on Friday.… Read More

There’s a massive government program that has been sold to the American people with the help of a whole lot of shoveling by the Obama Administration and the Democrat-controlled Congress.

I’m talking about the “stimulus” program, which was supposed to get “shovel-ready” projects built right away, giving an immediate shot in the arm to the economy.

It’s no wonder, of course, as many a president elected during (and therefore almost invariably because of) economic downturns has, during his first 100 days, spent immediate political capital on stimulus. Our current situation has been no exception as job losses and personal net worth are declining at a pace not seen since the late 1970s. The national economy continues to lose jobs at a breathtaking speed, with about 1.5 million jobs lost just in the time since President Obama entered office.

The President’s Keynesian proposal to jumpstart the economy is ambitious in one dimension – size. The $700-billion-plus “stimulus package”, called the American Investment and Recovery Act, was sold as a “shovel-ready” plan intended to employ many of those out of work in… Read More

FR readers should be advised that in order to catch a very early flight, the main page links were pulled together between 2-3am. It’s possible that some stories were not updated on newspaper sites that early. That is certainly the case with the San Francisco Chronicle, which you may want to check for yourself.

Sorry for any inconvenience.… Read More

As the Budget Conference Committee continues to discuss the state’s $24 billion budget deficit, Senate Republican conferees Bob Dutton and Mimi Walters are calling for less talk and more action. In an effort to bring transparency to the Conference Committee process, Senators Dutton and Walters will be offering regular updates on the committee’s progress until it concludes. “We have been meeting for nearly two weeks and it’s clear to us that the Democrats are not willing to make the reductions necessary to solve this $24 billion fiscal crisis,” said Dutton. “Spending reductions of this magnitude are not easy for anyone, but they are necessary. Time is running out.” Senator Walters added, “Raising taxes is out of the question. California’s government is too large and too expensive. We have to spend less and live within our means.” Senator Dutton and Senator Walters have repeatedly reminded their colleagues on the committee that energizing California’s economy—stimulating private sector job growth—is the long-term answer to the… Read More