My fellow Californians, the State of the State is .
. .
"Gov. Arnold Schwarzenegger is preparing to deliver the sixth -- and perhaps most difficult -- State of the State address of his tenure at 10 a.m. in the Capitol," reports Michael Rothfeld in the Times."
Well, the difficult part might explain the prime-time delivery.
"The speech, an annual rite presented to an audience
of lawmakers and guests in the Assembly chamber, is
where governors traditionally lay out an agenda and
set a tone for the coming year.
"This is the second straight address in which Schwarzenegger
is likely to have to scale back his ambitions because
of California's fiscal crisis. But the problem is more serious this
year than last."
Capitol Weekly takes the occassion to reflect on how we got into this mess in the first place.
"'It’s really a matter of what you want government to do,' says Diane
Cummins, who served in Gov. Pete Wilson’s Department of Finance and as
budget director to Sens.
John Burton, D-San Francisco, and Don Perata, D-Oakland."
That's easy. We don't want cuts and we only want tax increases on smokes,
drinks and rich people.
"Cummins says there has been some expansion of the social
safety net over the last two decades, with new programs
like the state’s Healthy Families program coming online in the mid-1990s.
"'I don’t think that Republicans are wrong to say that there
are some fast-growing programs,' she said. 'A big one is corrections. In-home social services has grown. Other areas have too,
like the services for developmentally disabled.'
"A major shift in the role and funding of state government
came with the passage of Proposition 13 in 1978. By locking in property tax rates, voters essentially
froze the major source of local government funding.
"As a result, services that had been provided by local
governments shifted to the state. As a result, state
spending on its citizens skyrocketed.
"According to records from the Department of Finance,
the state spent $626 for every Californian in the 1977-8 fiscal year. The next year, after the passage of Proposition
13, that jumped to $821 per capita."
Speaking of, have we mentioned that Jerry Brown may be returning?
John Howard looks at one of the likely pieces to the budget deal -- an oil severance tax."
"California is the only state in the nation without
an oil severance tax.In 2006, California rejected an oil severance tax ranging
from 1.5 percent to 6 percent per barrel which would have raised an
estimated
$4 billion over time. Supporters of the sliding-scale tax disputed the
industry’s research on the issue, and noted that the industry’s
multimillion-dollar ad campaign persuaded voters to oppose it.
Schwarzenegger,
aligned with business interests, anti-tax forces and the petroleum
industry, opposed that
tax."
That was then ...
"The governor, in a major break with business interests,
now favors an oil severance tax – although it is in a different form
than in 2006 -- and has proposed a 9.9 percent levy in his 2009-10
budget. By one estimate, it would raise $855 million annually, or more
than $8 billion over a decade."
"California's state cash-flow crisis will almost certainly delay tax refunds and other payments
as soon as next month, while the world's seventh-largest economy teeters on the edge a "cash abyss" by the summer, according to a report released Wednesday," writes Wyatt Buchanan in the Chron.
"The nonpartisan Legislative Analyst's Office reported that without action by lawmakers,
the state will be $500 million short of cash to pay bills by Feb. 1, which would grow to $4 billion by March. Even a solution today may not prevent
the state from delaying payments or issuing IOUs.
"'Staving off the cash crisis is going to be difficult,' said Jason Dickerson, principal fiscal and policy analyst for the office.
'It's pretty late in the process ... to completely eliminate
the prospect of some delayed payments.'
"The state can choose to hand out IOUs or simply not
pay some bills, although both are likely to cost the
state more. It is unclear exactly what would be delayed,
but the list could include things like individual and
corporate income tax refunds and paychecks for legislators.
"Still, Gov. Arnold Schwarzenegger and lawmakers could
'shorten the duration and severity of this crisis,' Dickerson said. Schwarzenegger is expected to discuss
the state's fiscal crisis at his annual State of the State address
today."
Capitol Weekly looks at who would get paid, and who would not.
"The question of who gets paid and who does not is,
to some degree, already determined by state law. “In the weeks before
the state’s cash on hand reaches zero, the State Controller … must
delay payments classified as lower–priority under the law,” the report
states.
“The Controller has broad discretion to determine which
payments are “priority payments.”
Those priority payments “appear to include many related to schools, debt service,
state employee payroll and benefits, and Medi–Cal.” Other payments, including tax refunds, student aid
checks, and payments to local governments and vendors,
may be delayed in the coming weeks."
The Bee's Steve Wiegand looks back at the governor's five past annual speeches.
The AP's Samantha Young writes that environmental groups are souring on the governor.
"'The demand by the governor to do an end-run in environmental laws just flies in the face of
his environmental agenda,' said Ann Notthoff, California advocacy director at
the Natural Resources Defense Council.
"The governor's spokesman, Aaron McLear, said Schwarzenegger has earned his reputation as
a defender of the environment.
"'To suggest he is anything less than one of the most
passionate protectors of the environment is laughable,' McLear said.
"Two of the freeway projects Schwarzenegger wants to
fast-track through environmental exemptions have been the
subject of legal battles over air pollution concerns.
"One is a freeway expansion in the Sacramento area that
was blocked last year by a judge because the state
failed to analyze the potential effects of the added
lanes on greenhouse gas emissions. Schwarzenegger's budget proposal would override the judge's ruling."
George Skelton writes that the state employee furlough
plan should be scrapped, in favor of more state employee holidays being eliminated.
"What
the governor really should do is double up on the holiday
cuts and chop
four. Get down to 10 -- the six majors, plus four floating. Then he'd
need to pay a premium only for the six holidays. Save
around $400
million. Keep government offices open more.
"Make it all temporary -- like the tax increases."
"Plans to hire a contractor to start digging the long-awaited fourth bore for the Caldecott Tunnel later
this year were halted Wednesday when the California
Transportation Commission froze funding for the fourth bore and 26 other projects that had been scheduled to receive $293.5 million in state funding," reports Michael Cabanatuan in the Chron.
"Because of the state budget crisis and the world credit
crunch, the state lacks the money to release for even
those projects funded by bond measures.
"The $420 million Caldecott Tunnel project, which would add
a fourth bore to the busy tunnel complex on Highway
24, depends on $194.5 million in funds from the transportation infrastructure
bonds voters approved in 2006.
"With that funding frozen, the project can't move ahead with plans to solicit bids for the tunnel
construction next month and for two related projects
to reconfigure an Oakland street and a highway interchange
later this month."
Meanwhile, the University of California is also stopping
projects this week. Closer to home, UC announced that
all
work to renovate the UC Davis School of Law, currently
torn in half, would be halted for 90 days.
"University of California regents voted overwhelmingly yesterday to roll back freshman
enrollment in a move that may have been more important for the
message it sends than the money it saves," writes James Sweeney in the U-T.
"Blaming years of declining state support, regents voted
to cut 2,300 freshman admissions in the coming year and warned
that more may be lost later if the bleak financial
situation does not improve.
"The enrollment cut represents more than 6 percent of the 37,600 freshmen admitted this school year. But it's much less than the nearly 8,000 eligible freshmen initially turned away in a similar
situation four years ago.
"To partially offset the fewer freshman slots, the plan
developed by UC President Mark Yudof authorizes 500 more community college transfers in the fall, with
an additional 250 a year after that.
"For high school seniors anxiously awaiting responses
to their applications, UC still will make room for
at least 35,300 freshmen. The regents' vote means more will not get into the campus of their
choice."
And finally, from our Sexual Healing files, "Administrators at an Indiana
hospital said one of the three numbers listed for the hospital in
the
latest AT&T phone book connects callers to a phone sex line.
"Matt French, vice president of business development
and marketing
at Monroe Hospital in Bloomington, said the 32-bed hospital has
received about a dozen calls since the phone book was
released last
week from residents concerned about the misprinted
number, the
Bloomington Herald-Times reported Wednesday.
"'Some say they are surprised,' he said. 'Others say they want to know how in the world it happened.
We'd like to know as well.'"
And still others, well, never mind...
