Meh Culpa

Calfornia Proposition 1C snatches $5 billion from the mouths of babes and children

Here they go again.  Arnie and the Legislature are using 1C to borrow from our children and their children and their children’s children.  1C borrows $5 billion from future lottery profits,  while taking 20 to 30 years to pay off the debt,  yet the proposition is being sold as a way to balance the budget. Over the long term passing 1C means that it’s going to make future budget balancing acts even more difficult.

What gets me is that this measure isn’t just a one-time deal, though no one really mentions that point.  1C allows borrowing from the lottery at any time in the future, which means the “loans” to the General Fund may never end, and the children of California from 5 to 21  wouldn’t be getting the Lottery money due their educational institutions.  Oh yeah, as long as  the debt needs repaying, that’s what the Lottery will do instead of abiding by the will of the voters who passed the Lottery measure for K through JC Education back in the 1980’s.

The politicians in Sacramento, especially the *cough*Republican minority*cough,* are all about taking Educational funding away.  It’s always the first thing to go.  And now it’s going ‘way back in the future.

The legislative analyst takes pains in the subjunctive to say that the state might not borrow from the Lottery after all, in which case it might cover future payments the General Fund provides for Education.  Yeah, right.   (Sorry for being all cynical, but the subjunctive doesn’t cover the concrete, it is the stuff of daydreamy maybes.  Castles in the Air, so to speak.)

As if we need more, there’s another problem: The General Fund that’s borrowing from the Lottery to balance a massive deficit would have to make up for payments the Lottery would usually make.  Sound convoluted?  It is.

Plus, if the money isn’t there now,  I doubt the General Fund can make up the balance owed from 2009-10 next year.  Maybe there would be enough money in the General Fund for a payback in some decade or other, but probably not this one. Which means trying to find the money from another program certain politicians like to cut from the General Fund (See 1E and Inside Governor Hoover’s Budget Revise*).  Funny, you don’t see the Gov’nor taxing the people who can most afford it. A Randian** Republican to his core,  Ahhhnold insists on screwing over The Little Guy and The Little Kids and the Disadvantaged Through No Fault of Their Own.

How much sense does this measure make so far?

For creative accountants, it’s great because it  means balancing the budget on paper.  But  it may also make  us less competitive in the future by taking brain candy from the babies’ mouths.  Frankly speaking, the 8th largest economy*** in the world  needs its competitive features, but we’ve been slipping for over a decade.   Considered the high-tech state, California is about 46th in the country in terms of schools’ technology access and use and the state cannot afford to lose what little it has.    Personally, I think passing 1C will help guarantee more slippage.

I don’t think we  can we afford more of what 1A / 1B  promises our kids and possibly their kids and grandkids–less rather than more.

Can you tell I’m voting NO?

* Most spectacularly (for anyone who doesn’t want to read much more): “[I]nstead of temporarily cutting various services, the Governor’s revised budget would cut them permanently, particularly in programs like Medi-Cal, In-Home Supportive Services, SSI/SSP, regional centers, Cash Assistance Program for Immigrants. …The vast majority of those cuts would be implemented regardless of the outcome of the May 19 ballot measures.” He’s also raising fees for residents of veterans’ homes.  Despicable.

** See also “The Troubled Economics of Ayn Rand.”

*** In 2007.  Whaddaya wanna bet we’re about 10th or 11th this year?

May 16, 2009 Posted by | borrowing, California, conservative, Democrats, Depression, Economy, Education, far right, politics, poltical theories, Republicans, social theories | , , , , , , , , , , , | Leave a comment

California Propositions 1A and 1B: Why I’m voting NO

A few weeks ago I went through the California OFFICIAL VOTER INFORMATION GUIDE and decided how I was going to vote, but I’m doing it again before I mail off my ballot and thought I’d take y’all for a ride with me–pun definitely not intended, although I can’t say the same for the Governator.

1A and 1B are yoked together.  If either one should go down, the remaining measure fails even if it passes by a huge margin. Nifty, huh?

It gets better.  Just wait.

Proposition 1A is a Constitutional amendment that changes the way the budget process works, but the taxes will not take effect until 2012, leaving the next governor to deal with Arnie’s mess. 1A sets aside 12.5%,  of the General Fund for a “rainy day” fund (Budget Stabilization Fund) that already exists.  1A increases the amount set aside by 7.5%.

The hook:

If 1A and 1B pass, then schools (K- junior college) will receive $9.3 billion.  Nonetheless, Arnie has proposed cutting  $3.6 billion to $4 billion for Education next year, which I believe is in addition to what was cut this year,  that would leave schools with a best-case scenario  increase of  $5.3 billion.

What funds Arnie gives with one hand, he takes away with another.

The Governor gets new powers. If 1A passes, the Gov could reduce up to 7% of spending and purchases of big ticket items.  Not only that, he could reduce cost-of-living increases in any program as well as some state workers’ paychecks.  It’s not clear to me whether the Gov can raid a program the voters already have left off-limits, but that’s a distinct possibility.  Think about this, too:  it could  be Education, or something else you cherish.  And the legislature couldn’t do a damned thing about it. That’s part of the package.

Hmmm, new powers…  Hey, didn’t the last president get those?

Tax Increases* keep on keeping on through 2012, except for the Vehicle License Fee–that Arnie promised to reduced to get into office–which continue through 2013.  If I’m not mistaken, Californians pay more in personal income taxes than any other state in the nation, while seven of our cities are listed in the top ten on the Cost of Living index for the first quarter of 2005.   Ranked sixth highest in the nation in 2008, we paid 10.3% in state income taxes while the rest of the country averaged 9.7%.

Nobody really knows how this measure will pan out. (Ahh, uncertainty.  As if we don’t have enough already.)  The Legislative Analyst makes a good faith effort to figure the whole thing out, but has admitted to not having a clue.

Future revenues predicted by revenues obtained by the state in the past decade (!!). This is priceless.  Right now, we have unemployment hitting the roof so no one can spend much money and revenues from property related taxes have dropped like rocks because of record mortgage defaults that are expected by leading economists to increase, yet they’re going to predict revenue based on what happened ten years ago?  In 2000-2001 the state had a surplus revenue of $4.2 billion. But this year’s revenues sucked big time.  How much sense does that make?

Check it out:
(From: Sacramento Real Estate Statistics)


OK, so.  As I mentioned before, voting against 1A invalidates 1B by default.  Which is as good a reason to vote against 1B as any.  But the reality is even more irksome than I remembered.  K-12 and junior college funding–you know, that net increase after the cuts–won’t happen until 2011, leaving schools with those $3.6 to $4 billion cuts for two years.


Have y’all seen the Pro 1A and 1B commercials? One of the actors, The Teacher of Some Year or Other, talks about the layoff of 50,000 teachers thus  far and then acts as if the passage of these measures will change everything. Maybe, just maybe, the poor sods will get their jobs back?  I’d like to know how that works, and whence the money will come, since we don’t know how the junior college money will (eventually) be allocated.  Proposition 1B just doesn’t say.   Moreover, the Governor and the Legislature get to decide how the money’s distributed between the two systems because Proposition 1B doesn’t talk about that either.

I’d like to know what about Proposition 98 minimum guarantees to Education funding the Governor and Legislature did not understand?  As a general rule, Education funding is the first thing to get screwed in our great state.  Nobody seems to know how all this will work out if 1A/1B passes.  It has been argued that the Siamese Twin Propositions put a cap on Education spending,  although Proposition 98 already does that in low revenue years.

“Voters need to know that we don’t have to lock flawed and dangerous formulas into the constitution in order to repay our schools. Proposition 1A will turn the Proposition 98 minimum funding guarantee for our schools into a cap instead of a floor, and Proposition 1B could mean that schools won’t even get all the money they are owed if more cuts happen in the coming year,” said Marty Hittelman, President of the California Federation of Teachers.

And what’s the business about schools being owed money? Oh, the legislature in its dubious wisdom “suspended” Proposition 98 starting in 2007.  Proposition 98 says that money taken away from Education must be repaid. The California Teachers’ Federation argues that if Arnie’s cuts go through and the Proposition 1A / 1B pass, the state will owe its Education fund $12 billion. Will the state repay the money?  I doubt it.  We have pretty bad credit right about now.  Lowest in the nation, and that’s a fact.

No one really knows how the Constitution will be interpreted in the face of 1B because no one is quite certain how Proposition 98 will effect maintenance payments, let alone which method to use.


I say that if no one knows, it’s probably a bad idea to vote for the darn thing.

My fave part of all time: The Governator’s having so much fun with his budget cuts that he may be jeopardizing the stimulus money California desperately needs.

Niiiiiiiice job, dude.**

* I am of the opinion that once tax rates go up, they don’t like to go back down.  I know that notion violates the 3rd principle of Newtonian physics, but that’s what I think.

** I am so being facetious.

For more info, also see Calitics  “The Deficit Is Too Large For A Cuts-Only Solution”

May 15, 2009 Posted by | bailout(s), borrowing, Bush administration, California, Depression, Economy, Education, layoffs, stimulus package, unemployment | , , , , , , | Leave a comment

Scariness: Projected California jobless rates through 2011


April 4, 2009 Posted by | Bush administration, politics | , , , , , , | Leave a comment


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