California Senate fails to break budget deadlock

SACRAMENTO—The California Senate shut down at midnight Tuesday after failing to approve a stopgap plan to stave off the need for IOUs and ease the state's $24.3 billion budget deficit.

Voting along party lines, the Senate rejected three bills designed to save $5 billion, including $3.3 billion in education funding cuts that had to be enacted by Tuesday. The new fiscal year started Wednesday.

The measures fell two votes short of the two-thirds majorities needed to send them to the governor's desk, but Gov. Arnold Schwarzenegger said he would not sign any bill short of a complete solution to the deficit.

That stand brought a rebuke from Senate President Pro Tem Darrell Steinberg, D-Sacramento.

"What an irresponsible position to take when our problems are already as severe as they are," Steinberg said in asking his colleagues to support the stopgap bills. "Don't be a party to that."

Failure to approve the cost-saving measures will add to the state's deficit, perhaps by as much as $7 billion, because of the state's complicated school-financing system.

At least two Republican votes were needed to put together the two-thirds majorities required to approve the three bills, which passed the Assembly last week with bipartisan support. The Senate's 25 Democrats supported the bills, but 14 of the 15 Republicans voted no.

One Republican, Sen. Abel Maldonado of Santa Maria, abstained, but Senator Alex Padilla, D-Los Angeles, said

Maldonado's vote for the bills wouldn't have mattered.

"He would only have gotten us to 26," Padilla said.

State Controller John Chiang has said he will have to start issuing IOUs on Thursday unless lawmakers and the governor agree on a way to at least ease the state's red ink.

The Assembly and Senate previously passed a Democratic budget plan that included tax increases and spending cuts, but on Tuesday Schwarzenegger vetoed some of the bills that would implement it.

A state appeals court ruling Tuesday created more difficulties for lawmakers trying to reach a budget agreement. The decision by the 3rd District Court of Appeal barred the state from raiding local transportation funds to pay for other programs. In his budget proposal, Schwarzenegger had counted on shifting nearly $1 billion in transit money from local governments to the state.

If they are unable to take that money, the governor and lawmakers would have to find another source of funding or make additional cuts. Administration officials said they plan to appeal.

Frustration over the size of the budget shortfall and the inability to find common ground was evident on the Senate floor late Tuesday.

As midnight approached, Steinberg accused Republicans of holding the state hostage by not voting to accept the $3.3 billion in immediate savings that would avoid IOUs.

"This is craziness. There's no excuse for it," the Senate leader said.

Another Democrat, Sen. Mark Leno of San Francisco, criticized Sen. Dave Cox, R-Fair Oaks, for asking the presiding officer if he could get up and walk around while the Senate waited until midnight to adjourn, suggesting that Cox was making a joke when he should have been serious.

"We're about to lose $7 billion in just six minutes," Leno said. "The president pro tem has done everything in his power to prevent this from happening. We work in good faith. That folks are joking in this room is beyond understanding."

Senate Minority Leader Dennis Hollingsworth, R-Temecula, said neither he nor his GOP colleagues wanted to see the state resort to IOUs. But he said voters expected lawmakers to close the deficit at once, not act in piecemeal fashion.

"Getting the job done is defined as fixing the problem," he said.

Schwarzenegger's office said the governor did not want a partial fix. Aides said he believes it would let lawmakers off the hook and make it more difficult to close the entire deficit in the weeks ahead.

"If you solve for a little bit now, do we have any confidence or faith that the Legislature is going to come back to work tomorrow morning and solve the rest of it?" Schwarzenegger spokesman Aaron McLear said Tuesday.

"I think that based on the way things have gone the last couple of years in budget negotiations, I don't think that anybody in California has faith that we solve a little bit now, a little bit next week, a little bit after that."

One challenge in reaching a compromise has been Democrats' refusal to accept the deep cuts to college aid, children's health care and welfare programs contained in Schwarzenegger's budget proposal.

The governor has offered a compromise to those cuts, seeking structural reforms to state programs instead. Over the weekend, he proposed reducing state pension benefits for new hires, shifting enrollment for the state's health insurance for the poor online to reduce government jobs and requiring in-home caretakers to submit to fingerprint and background checks to prevent fraud.

He also wants reforms to the state's welfare program. In all, those measures would save California $2 billion in the fiscal year that begins Wednesday, according to his office.

California's deficit will now grow to nearly a third of the state's general fund and has been widening this year as tax revenue has plunged. That has left the state with too little money to pay all its bills.

Chiang, the state controller, has said he will have to issue about $3 billion worth of IOUs this month to state contractors, college students and taxpayers owed refunds unless there is a budget-balancing agreement. Counties will not get paid for social programs they administer.

California will not run out of cash immediately. While spending obligations will begin outpacing revenue without a balanced budget in place, the IOUs will delay a cash crisis until September. At that point, the state will be in jeopardy of running out of cash unless lawmakers figure out a way to pass a balanced budget.

The state already has a budget in place for the 2009-10 fiscal year, thanks to a two-year budget package approved in February, but the spending plan is badly out-of-balance. The main culprit is the recession, which caused a 34 percent plunge in personal income tax revenue during the first five months of the year.

By JUDY LIN Associated Press Writer

Posted: 06/30/2009 11:50:13 PM PDT

Updated: 07/01/2009 12:46:12 AM PDT

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Associated Press Writers Steve Lawrence and Don Thompson contributed to this report.

Source: Mercury News Silicon Valley

Posted: Daily Thought Pad

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California Mess is a Microcosm of What's in Store for the Rest of Us

RUSH (LIMBAUGH): In California today, voters are going to go to the polls to decide the fate of six ballot initiatives.  Four of them would, if they pass, raise taxes on Californians.  The Governator is not there.  The Governator is in Washington along with Jennifer Granholm to celebrate the announcement by Obama today of these new auto emissions rules.  They're going to add about -- well, if they're going to say $1,600 to the cost of the American family, double it at least by the time we get to 2016. 

Schwarzenegger has pushed heavily for all six ballot measures.  They are designed to close California's $15 billion budget shortfall.  But as the Heritage Foundation points out in a great story called Californication: "Even though Schwarzenegger's legacy depends on the passage of these initiatives, he will not be in California tonight to see the results. The Los Angeles Times reports: 'His absence in the face of widely forecast defeat drew mockery from his foes.' Instead Schwarzenegger will be in Washington, DC, where he is scheduled to join President Barack Obama at the White House to celebrate the federal adoption of auto emissions standards that mirror standards previously adopted by California."

Now, this is being called a win for California.  The LA Times here is saying that the Governator succeeding in getting California emissions adopted for the nation is a big win for California.  Well, that may be, folks, but it is a huge loss for the rest of the nation, and it may just be the first of many losses for the rest of the nation.  Heritage Foundation points out today that for decades, California's been a leader in public policy innovation.  Stick with me on this 'cause this is where the rubber meets the road here.  A generation ago, 25, 30 years ago, California was at the forefront of a taxpayer revolt that eventually helped elect President Reagan and usher in three decades of prosperity.  California is still exporting its public policy ideas.  So how is California's experiment with the green economy going?  Do you know what Channel 4 in LA has discovered?  LA is called the greenest city in the country (laughing)  and they have discovered that the street lights are on 24/7.  The street lights are on in the daytime, and customers and citizens have been complaining about this waste, and the city hasn't been doing anything about it, they've been looking to blame the contractor or blame the department of public works or some such thing. 

But it's even better than that.  LA, the greenest city in the country, California with all of these great auto emissions standards, California imports more energy than any state in the country.  When you drive through that state you're going to see solar panels everywhere, and you will see windmills everywhere.  You are going to see cars on the highways everywhere.  You're going to see traffic everywhere as you know it, and yet California imports more energy than any state in the country.  As a result of that, it has some of the highest energy costs in the country, including the second highest commercial sector energy prices.  Only Hawaii, which is ocean bound, has higher rates.  Now, in addition to all the greening that's gone on in California resulting in the largest amount of energy imports in the country, California's unemployment rate hit 9.3% last December.  That was up from 4.9% in December 2006.  There are now one-and-a-half million Californians out of work.  The state has the fourth highest housing foreclosure rate in the nation.  California has lost more businesses than any state in recent years.  California is facing a $40 billion budget deficit.  In some small towns, unemployment is now running close to 35%, rivaling unemployment rates during the Great Depression.  And what is the benefit to the environment of all of this?  Absolutely zilch, zero, nada. 

All of this economic pain supposedly for environmental gain has resulted in zero environmental gain.  This is the exact same formula that the Waxman-Markey energy tax legislation offers the United States, cap and trade.  It is the exact same thing this nation is headed for.  It has been a disaster for California; it will be a disaster for the nation at large and as a whole.  But you know how insistent Californians have been.  They've got their own fuel emissions standards; they have their own fuel mixtures and blends.  California imports more energy than any state in the country. 

Now, you might say, "Well, yeah, but, Rush, they got more population."  Well, they're also the greenest.  They have embarked on policies to reduce the need to import.  What is the whole impetus behind Obama's cap-and-trade program?  To reduce our dependence on foreign oil, to make us less susceptible to people who hate us and what's California showing us?  It's a microcosm of what is ahead for the United States of America.  They import more energy than any state in the country.  Unemployment through the roof; budget deficits through the roof; six ballot initiatives today, four of which would raise taxes.  The governor out of town; doesn't want to be anywhere near there when the results come in tonight. 

The polls indicate that these things are going to go down in flames, that despite all, Californians don't want to pay higher taxes, even the majority lib population out there because they're starting to say, "It's not our fault, it's not our fault.  The fact that we're not paying enough taxes is not the reason why you people in Sacramento can't control your spending."  So all of these liberal do-good ideas, all of these feel-good things, all of these proposals and ideas that are going to make California the beacon of the country and show us the way on energy independence, have all failed miserably.  Schwarzenegger is in Washington today to join Obama in spreading the same kind of energy policy nationwide that California has adopted for years, and this is being called in the LA Times a big win for California.  Nothing could be further from the truth. 

BREAK TRANSCRIPT

RUSH:  Liberty Township, Ohio, this is Adelee, nice to have you on the program.  Hi.
CALLER:  Hello, Rush.  I was just calling you to say that Europe uses nuclear power so if we were actually trying for energy independence we wouldn't be going for the wind or the solar.  If we are trying to follow what Europe does, we'd be using nuclear power.

RUSH:  Well, especially it's a good point about France.  France is big into nuclear power, but you raise a good point here, Adelee.  There's a way to reduce our dependence on foreign oil tremendously and there's a way to reduce the use of coal and that's nuclear.  Oh, no, we can't have nuclear.  Why?  Because nuclear, well nuclear, we'll all melt, radiation, we'll die of radiation poisoning.  We know that because of a movie called The China Syndrome in which Jane Fonda starred.  That movie killed the nuclear industry and it was done on purpose.  But there is an added reason why we don't go nuclear, and I want to take you back to my example.  Obama is going to have us all driving putt-putts -- they get 35 1/2 to 39 miles a gallon -- by 2016.  The purpose: use less oil, use less gasoline.  This is to reduce our dependence on foreign oil.  We don't like those sheiks in the oil-producing states in the Middle East and we don't like being vulnerable so we're going to go driving little putt-putts.  At the same time we do this, guess what we're going to do?  We are going to save the planet from whatever this hoax climate change is.  But then, understand something. When we're all driving these putt-putts and using less gasoline, that is going to equal less sales tax revenue, gas tax revenue, both to the feds and to the states.  Any time you use less of a product, the tax take from it is less, so one of two things is going to happen.  They're either going to have to raise taxes, which is the next step to come, raise taxes on gasoline.

Folks, this is the point.  It is not that anybody at this press conference today, from Obama to Carol Browner or anybody else, they don't care about being dependent on foreign oil.  There are ways that are much more efficient and make much more sense than 35 or 39 miles to the gallon in a putt-putt to reduce our use of foreign oil.  They want the use of oil to continue.  They just want the money for it.  They don't want the sheiks getting the money, and they don't want foreign oil companies getting the money; Obama wants it.  Washington wants the money.  This is the first step, the universal or a national fuel efficiency standard is the first step toward them shifting the expenditure of dollars for oil overseas to Washington, one way or the other.  Another thing that's going to happen here is that we're not going to use less oil.  If we do, then you're going to see an appropriate contraction and decline in your standard of living and in the overall national economy. 

You do not grow an economy by making things more expensive for average people to utilize.  You do not grow an economy by raising the cost of living and with tamping down the standard of living.  You don't do that.  What you do is you encourage and facilitate the growth of government which is going to be collecting all of the revenue that would normally be used as disposable income in your own family.  They're going to get it.  The states are going to get it, the federal government is going to get it, and you're going to have less of what you earn because you're going to be spending more of it, even though you're told today that you're going to have to drive a car that gets 35 to 39 miles a gallon and, voila, you're going to be using less gasoline.  If you think that's going to add up to a lot of savings, you wait.  We've already seen the evidence.  In North Carolina they had a drought, so they reduced water usage.  They did the same thing here.  Had a drought, you can only use water once a week.  Then they found out wait, wait a minute, our taxes from the water utility are going way down, so they raised the rates, water prices, if you will, utility prices in North Carolina and Florida, after they enforced less usage.  Same thing is going to happen here. 

In fact, it's already happened in California.  When people already started buying putt-putts on their own and started using less gasoline, didn't take long for Sacramento to realize that their gas tax revenue was down.  So they started talking about how to raise taxes, and in California today, after all of these brilliant, massive economic improvements, after all of this cutting-edge environmental improvements, all of these green adds, windmills and solar panels and new formulations of gasoline, California today, which imports more energy than any state in the country, and today there are six ballot initiatives, people going to the polls in California and four of them are to raise taxes after all of these steps were taken to save the state, to save the planet, to save the country, to save on our environmental expenditures.  And it just hasn't worked, has it?  So what you're seeing in California today is a little microcosm of what's headed our way, now specifically since Obama and Carol Browner have announced this silly nationwide CAFE standard tailpipe emissions limit and mileage of 35.9 miles per gallon. 

Now, I know some of you saying, "Rush, what is wrong with cars that pollute less?" Nothing.  There's not a thing in the world wrong with that.  But that's not what this is about, folks.  None of what Obama says is his motive is his motive.  His motive is designed to get you on board and in love with the idea of how much he cares about saving the planet, the country and you.  This is all about increasing revenue to the states and the federal government while at the same time taking money away from you and having a little bit more control over what you do.  If you want to drive a putt-putt you ought to be able to drive a putt-putt, but if you don't want to drive a putt-putt you shouldn't have to drive a putt-putt.  Once they make us all start driving putt-putts then they're going to say you can't get the big TV you want or whatever it is.  There are going to be limits on it because it's destroying the country or the planet or somehow it's unfair to those who can't have it, you name it. There will be limits.

END TRANSCRIPT

Source:  Fox Nation

California Voters Say 'No' to Tax Hikes

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Read the Background Material...

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All Common Sense Must Go! - California

By Glenn Beck

 FNC

Here's the one thing: California is having a going-out-of-business sale and all common sense must go! Am I the only one who is surprised it lasted this long?

The situation is so bad that California's rosy scenario puts their budget just $15 billion in the red. When you trade "rosy" for "realistic," you're looking at as much as $21 billion in the hole.

• Is Beck right? Click here to join the debate

Look, I probably don't have to tell you that a lot of things in California don't make sense:

This is a state where one estimate counts 7,000 overlapping jurisdictions.

This is a state where key lawmakers go on overseas junkets instead of meeting their constitution's budget deadline but who, can still manage to pass bills banning wild burros from private property and exempting golf carts from traffic laws in some upscale communities.

This is a state where a public pension system pays $5,000 state and municipal retirees more than $100,000 a year (double the average household income in the U.S.).

And — most troublingly for all my economic geeks out there — this is a state with the lowest bond rating in the nation, likely because they sell bonds to themselves. What does that mean? When the state needed to run up more debt, who stepped in to help out? The Bay Area Toll Authority. That's sort of like listing an item on eBay from your home computer and then buying it yourself from your laptop.

Of course, California knows how shady this is, so their treasurer wants the U.S. to back these bonds. Remember, if California were its own country it would have the 8th biggest economy in the world. Considering our government is micromanaging car companies ad budgets, don't you think someone will soon decide California is too big to fail?

Other than you paying for California's long-standing stupidity, what's their plan to turn the state around? Governor Schwarzenegger proposed $15 billion in cuts and warned that if his propositions fail, California would need to release 40,000 prisoners, lay off more than 50,000 teachers and close down dozens of fire stations.

Polls suggest the governor's propositions will all fail Tuesday, (besides the one that'll keep lawmakers from giving themselves raises, which they did twice in the past six months.)

How many times do we have to hear this fraudulent argument? When you have literally no government structure whatsoever, then I'll believe you have nothing less important to cut than fire fighters and prisons. You can't make that argument when you're still spending: $1.5 million for nontoxic dry cleaning; or $40.5 million for migrant day care; or the estimated $13 billion for education, health care and other services for the state's 3.2 million illegal immigrants.

And yes, I understand they cut the budget for their sea otter program by close to half. But before you let murderers out on the streets, I suggest you make the otter budget look like the first letter of "otter."

While they float radical plans — like selling San Quentin Prison (an idea that's been voted down for four years) — I have an even more radical plan: use common sense.

Spend less and balance your budget; open up your oil leases for additional funds and lower your income tax rates from the highest in the country, instead of driving out business. Then hope the otters will forgive you.

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California is Liberalism's "Canary in the Coal Mine"

Once, California was known as the “Golden State.” No more. It’s struggling with a fiscal crisis of epic proportions. And voters are so disgusted with the ineptitude and waste of a state legislature dominated by liberal Democrats that they are poised to vote down a $16 billion tax increase and a slew of propositions allegedly intended to beat back fiscal Armageddon.

If residents of the other 49 states haven’t focused on California’s plight yet, they should. In a real sense, California has become liberalism’s “canary in the coal mine.” It is an instructive – and frightening – warning of the toll exacted by the kind of leftism now in vogue in Washington, D.C..

Put simply, California is in desperate fiscal straits because it has become a place where government works for only two constituencies: Those who need public assistance, and unions. Sacramento is so busy responding to the needs of the one and the demands of the other that the legitimate expectations of regular, taxpaying citizens have been completely ignored.

For union members, life is good. California teachers earn 25% more than the national average, yet California’s students test out near the bottom of the national average… partly because California has not been able to get their illegal alien problems under control, even though some of the most incompetent, indifferent or downright dangerous of them cannot be fired because of concessions won by the teachers’ unions. The SEIU is so powerful that some of its members were able to listen in on a phone call between the Obama administration and the state – which resulted in the President’s threat to withhold stimulus money if the cash-strapped state made even modest cuts in the salaries of unionized home health care employees. In fact, state government is routinely held hostage by public employee unions; not surprising when one considers that California is home to 356,000 state workers – 9.3 of them for every 1,000 residents.

Similarly, if one is an illegal alien or in need of public aid, California works well, offering a panoply of health and other welfare services with few questions asked. Just last week, in fact, Democrats in the state legislature opposed requiring welfare recipients who failed to complete a drug treatment program to take random drug tests in order to continue receiving benefits. And California spends in excess of $5 billion per year on illegal immigrants and their families, offering a menu of health care services that includes non-emergency care, long-term nursing home care, and abortions.

To pay for all of this, California has the highest top personal income tax rate and the highest sales tax rate in the country. Corporate taxes are high, too. And yet regular taxpayers have little to show for the exorbitant sums extracted from them by state government.

How times change. Forty years ago, California’s roads and schools were the envy of the country. Now, of course, highways are jammed, and schools languish near the bottom of nationwide rankings. Hospitals are overcrowded, as are prisons. And contrary to the claims of those on the left, the problem isn’t inadequate “investment,” i.e., spending. Forty years ago, the state spent $1240 for every man, woman and child in the state, in today’s inflation-adjusted dollars. Now, it spends more than double that amount – $3200 per person – even as ordinary citizens’ quality of life has plummeted. No wonder voters are poised to reject the politicians’ propositions, which would require another $16 billion in tax increases!

What’s become apparent from the California debacle is that government is perhaps capable of doing a little bit for everyone, or everything for a few. But liberalism’s golden promise of an efficient government that does everything for everyone is nothing but a pipe dream – and an expensive, destructive one at that.

If Americans are smart, they’ll learn from California’s example. There’s something eerily familiar about President Obama’s close embrace of government employees and unions – along with his historically budget-busting “investments” in all manner of services – coupled with his call for higher taxes.

In California, we’ve seen it all before. And believe me, it isn’t pretty.

 

by Carol Platt Liebau - an attorney, political commentator and guest radio talk show host based near Los Angeles.

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The Sun Sets in California

CA is the canary! It will go into bankruptcy before the rest of the U.S. - but not long before, if Obama and the DNC-controlled Congress is not stopped. Forget the GOP - it lied, and then died. When do We the People decide to believe liars again? NEVER! And the Democrats are worse! Enough of the choice between worthless and useless!
We need a Conservative Party! Period. Go to the Constitution Party - it has an existing political party infrastructure - so We do not have to start from scratch! Take back Our Constitutional government! Better than open rebellion - although all options are on the table!

And warning to D.C. - don't mess with the First Amendment if you don't want to find out what the Second Amendment is for! We the People have not yet conducted military tribunals to accomplish justice, but We do not consider this a significant limitation on doing so, if necessary!

Hendry in Texas~

 

And then,  let us not forget California’s greatest contribution to America’s nightmare… Nancy Pelosi…

 

Photos (Below) From the John and Ken Tax Revolt over the weekend

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Glenn Beck: California - let them fail

May 18, 2009 - 12:26 ET

Glenn Beck is seen here on the Insider Webcam, an exclusive feature available only to Glenn Beck Insiders. Learn more...

GLENN: I would just like to say California is the neighbor that we just want to move away. You know what I mean? We just want California and not all of you honestly. I mean, don't get me wrong. I love California. It's just that the majority of the people that are running California have wrecked it. But the good news is Californians themselves, I think it's just maybe and I'd like to hear from Californians. Maybe it's just that you get so worn down, you're like, "I can't take it, whatever." And you just let it go because you're just not going to fight it because you know you're not going to win... until moments like this when the tax is out of control, your state is going bankrupt and they come to you and they give you a bunch of proposals that they ask you to vote on and you're going to say no! 

Full Transcript:  Transcript

Posted:  Daily Thought Pad