In the so-far-unsuccessful quest to find enough Republican votes to pass the budget monstrosity, the focus has been on termed-out legislators. One would assume that the reasoning for this is that these members won’t be seeking re-election in two or four years and therefore voting to raise constituents’ taxes won’t come up in a campaign. But what about any future campaigns for higher office? Are these lawmakers the rare breed that has no ambition for higher offices?

Even if they’re satisfied with their “service” thus far, maybe these members should be worried about even finishing the current term. When word leaked that Senator Abel Maldonado might be caving on the budget vote, a web site was purchased with the address RecallMaldonado.com. Considering the success of past recalls for mismanaging the state government, Senator Maldonado might want to reconsider voting for this particular tax-increasing budget. As of this post, RecallAshburn.com was still available…

Registrant: MAPA Strategies

5235 Mission Oaks Blvd Suite 1000 Camarillo,… Read More

With the State Senate adjourning for the night, a $14.4-billion package of outrageous tax hikes remains precariously close to passage. This got me thinking about how good a thing it is that California doesn’t have certain tools the federal government has.

Things like simple-majority legislative approval for tax increases, or its own currency. With control of money supply, the feds are currently preparing to try to spend our way out of a recession with money they don’t have. Of course California has tried that, in a way, by borrowing just to get by. This has resulted in postponing structural reforms to the point that California’s tainted credit will limit further borrowing.

So what other options does California have? Well, there’s tax increases, which are only an option when approved by the voters or two-thirds of the Legislature. Yet even the federal government realizes that increasing taxes can have destructive effects on a weakened economy.

The other tool California government still has is budgetary and governance reform. If state leaders had the will – inspired by the threat of bankruptcy perhaps – they could fundamentally… Read More

Don’t know for sure what is happening right now, but word is the Dems are asking for reconsideration on everything. They may be pulling off the deal, or it may just be the procedural requirement to adopt the new deal language, I don’t know yet, but I am sure we will find out soon.

As for the comments of Mike Der Manouel, I understand Assemblyman Villines concern. It is extraordinarily difficult to be a Republican Leader under these circumstances. I feel for both Cogdill and Villines, both of whom I like and respect. This deal, however, is a game of chicken. The two cars are racing toward each other, and the winner will be the one with the most nerves. The Dems will not let the state go bankrupt, they can’t. Their constituency groups cannot afford what will happen if all the union contracts are reopened, and deals negotiated. The Dems have a lot more to lose than the Reps if things go bad.

That being said, no one is reinforcing the "stand tough" stance for those leaders. They are walking into this gunfight (to mix my metaphors) with a sling shot. Even Republican budget staff is saying they have no choice but to raise… Read More

3:30 PM Update: The Governor’s Office has responded to Zycher’s observations below, and that response can be found here.

As we rush speedily into a vote tonight on a "Big-5" produces budget plan that includes nearly $15 billion in assorted tax increases, one of the major "concessions" that is in the plan, to "sweeten it" for GOP support is the placing of a Spending Limit Initiative on the ballot (though we note that the Limit, if it passes, also extends the tax increases).

One of the policy experts on economics and state finances that I look to in this area is Dr. Benjamin Zycher of the Pacific Research Institute. Zycher was asked by the Howard Jarvis Taxpayers Association to review the final language.

… Read More

UPDATE: Well, it’s not news. But if you are looking for something to do, click here and look to the bottom of the right hand column. You’ll see Dave Cox mentioned…

Well it would appear that the State Legislature is going to meet into the wee hours.

Conventional wisdom seems to be that in the Assembly, Republicans Villines, Adams and Niello are set to go up on $14 billion++ in tax increases. In the Senate, Republicans Cogdill and Ashburn seem ready to go up on the taxes, but the third vote is being elusive. It belongs to State Senator Dave Cox who is the only other Senate Republican who has not make it clear he is opposing the plan.

Currently Cox is proposing an amendment concerning how Proposition 10 monies are reallocated (a pet issue of his). Apparently Cox has a whole boatload of amendments, and I suspect that one of them… Read More

Mike Genest, Governor Schwarzenegger’s Director of Finance has offered this response to Dr. Zycher’s concerns about the Spending Limit Initiative language in the current "Big 5" deal: Dr. Benjamin Zycher made five observations regarding the budget stabilization fund contained within the current budget agreement. In response to his “observations,” I offer five factual statements. Zycher observed: The degree to which the estimated revenue projection trend and the Budget Stabilization Fund would operate actually to limit general-fund spending is not clear.

Incorrect. The governor could not simply suspend the transfer of revenues into the new rainy-day fund. While Article XVI Section 20 (e) of the state constitution currently allows governors to suspend the… Read More

Anthony York over at Capitol Weekly is reporting that there is unrest amongst Republicans as a result of this "Big-5, Big Taxes" deal.

I typically refrain from commenting on legislative caucus politics, and will continue to do so. But I will continue to express a high degree of frustration that seemingly overnight, the position of Republican leadership went from "taxes are terrible and we completely oppose them" to "taxes are terrible but not having them is more terrible and now we support them."

My overwhelming feeling is one of disappointment at this situation, and that our leaders are going "maverick" when their caucuses overwhelmingly oppose the tax increases.

Again, I am not trying to be critical of Cogdill and Villines as individuals — they are both good people. But I do feel that the "art of the deal" is supplanting the "team" concept that is so important to achieving long-term success.

I do hope that part of the… Read More

I will happily acknowledge that I am NOT a policy wong. Some of the back and forths below from policy-wonks on the language of the proposed spending cap (that would go before the voters, tied to extending taxes that are raised in this Big 5 deal) are above my pay-grade.

That said, my "open question" on the cap is this?

I am going to throw out there that there is distinct possibility that Republicans joinin hands with the Democrats for a plan that includes $14.8 billion in tax increases is going to cause a big problem for the GOP, and that it may very well lead to losses of seats in the Senate and the Assembly. When the smoke clears after the 2010 election, Democrats may have a supermajority of the legislature (yikes).

If that were to happen, AND the spending cap as proposed in this deal were in place (having been passed by the voters) — is the cap strong enough to keep Democrat supermajorities from racheting up spending (beyond the cap)? In otherwords, when we are forced off the beach, and back onto our landing craft, have we left some protection behind?

As I understand it, there is a big gaping hole in this proposal. To put… Read More