California's budget crisis is worsening day by day—in both substance and style. Since the start of the fiscal year on July 1, the deficit has ballooned another $2 billion to a total of $26.3 billion, and the state is now issuing IOUs in lieu of payments. Meanwhile, Republican Gov. Arnold Schwarzenegger and Democratic Assembly Speaker Karen Bass are acting like stubborn, obstinate children.
Schwarzenegger won't budge from his insistence that the Legislature send to his desk only a complete budget-balancing solution—he'll veto any partial measures. That's an unreasonable stance, and it left him vulnerable to a charge from Senate President Pro-Tem Darrell Steinberg this week that Schwarzenegger's intransigence is to blame for the state being unable to cut $3 billion from education, thanks to the complicated manner in which public schools are funded in California. There's no reason the two sides shouldn't be able to chip away at the massive deficit little by little. It would show progress to both the public and the credit-rating agencies, but maybe the governor needs to be able to continue blaming the capital Democrats for as big a number as possible to divert scrutiny from his own damaged political legacy.
Bass' behavior this week was perhaps even worse. On Monday morning, she boycotted a Big-5 budget meeting (the governor and the top two Democrats and Republicans in the Legislature), arguing that Schwarzenegger is raising issues unrelated to the budget. Not only is her behavior childish and counterproductive, she's also wrong. Take, for instance, the governor's high-profile proposal to combat fraud and tighten eligibility in the In Home Supportive Services program. While CityBeat isn't necessarily on board with his ideas, there's no doubting their potential impact on state spending. If Bass hates his proposals, she should continue to argue her points in closed-door negotiations and in public. Boycotting meetings only fuels the fire for those who complain that Bass is too deep in the pocket of the Service Employees International Union, which represents many of the in-home-care providers and opposes the governor's proposals.We agree with Bass' assertion that the deficit is too big to be solved only through bureaucratic efficiencies and cuts to programs for the poor. Modest, targeted fee and/or tax increases should be part of the solution, but Bass can draw support for such a balanced attack only if she shows up and negotiates in good faith. (It's important to remind Republicans that while spending grew during the dot-com bubble, their tax cuts and fee decreases also contributed to the now-chronically imbalanced budget.)
As CityBeat argued recently, Congress and President Obama could make the problem much more manageable by loaning money to the states, at no interest, in amounts equal to what they've lost in tax revenue, through no fault of their own, due to the recession. According to the California Legislative Analyst's Office, that number here is about $15 billion, which would be the largest check the feds would have to cut. The total amount paid out to the states would pale in comparison with the combined bailouts of Wall Street and the auto industry. That would leave California with a deficit of roughly $11 billion, which could be remedied through spending cuts and bureaucracy tightening.
Alas, such help is highly unlikely, even though it's at least as justifiable as the private-sector bailouts, and we're stuck with a gargantuan deficit that will eventually be solved mostly on the backs of the state's most vulnerable citizensIf Schwarzenegger knows what's good for him, he'll stop telling magazine reporters that he goes home each day to a cigar and a hot tub—it just doesn't look good when he's proposing to eliminate welfare for needy mothers, healthcare for poor children and support for sick and disabled grandparents.
Efforts are underway to reform the state's kooky tax code and, possibly, get rid of the unreasonable requirement that two-thirds of the Legislature is needed for budget approval. However, as laudable and necessary as those reforms are, they won't impact the current crisis.
With no help on the way, Schwarzenegger and Bass need to start acting more like leaders.What do you think? Write to email@example.com.