Governor Schwarzenegger is casting his lot with the Republican minority in the legislature which is primarily responsible for the failure of the legislature to produce a viable budget. True, our staggering deficit does represent an accumulation of spending greater than revenue collection, and some of that spending, the burgeoning prison bill, for example, is certainly misdirected, but most of the deficit now undermining our credit and credibility comes from the success of the minority party repressing equitable revenue collection for several decades. The governor got his office by promising to hold the vehicle license fee at recession levels, thereby creating much of the current shortfall. The Republican minority in the legislature has wielded the veto given by the two thirds rule to keep taxes on the most lucrative sectors of the economy—real estate, financial services, and corporations, especially oil companies, low, shifting the burden onto individual personal income taxpayers and sales taxes. Their low taxes contributed to the housing bubble and subsidized an infrastructure increasingly dependent on shrinking supplies of oil and stubbornly resistant to adapting to menacing climate change. Extraction of rainy day funds from sunshine sectors was denied.
Both the governor and Republican legislators claim a mandate against any increase in taxes from the May 19 election, but neither election analysis nor public opinion assessments substantiates their claims. Long-term remedy lay not exclusively in spending cuts but in overcoming application of the two thirds rule. Continued tyranny by this highly disciplined minority will continue to consolidate economic and political power in the hands of winners taking all, depriving the rest of the broad incentives needed by the capitalist system it claims to represent. Instead, its “gusher up” policies disguised as “trickle down” have led to systemic breakdown, in which most who expect to win lose, and to destruction, not the “creative destruction” touted by its ideologists. Regenerative creativity has to come from policies based on experience, not ideological fantasy. Crisis may bring opportunity but institutionalized stalemate does not. Heaping blame on the boxed-in majority in the legislature produces more stalemate, not creative change. It merely serves to perpetuate the tyranny of the minority, results of whose ascendancy have now come home to roost.

By Allen Dirrim, GOOD Club President

Governor Schwarzenegger is casting his lot with the Republican minority in the legislature which is primarily responsible for the failure of the legislature to produce a viable budget. True, our staggering deficit does represent an accumulation of spending greater than revenue collection, and some of that spending, the burgeoning prison bill, for example, is certainly misdirected, but most of the deficit now undermining our credit and credibility comes from the success of the minority party repressing equitable revenue collection for several decades. The governor got his office by promising to hold the vehicle license fee at recession levels, thereby creating much of the current shortfall. The Republican minority in the legislature has wielded the veto given by the two thirds rule to keep taxes on the most lucrative sectors of the economy—real estate, financial services, and corporations, especially oil companies, low, shifting the burden onto individual personal income taxpayers and sales taxes. Their low taxes contributed to the housing bubble and subsidized an infrastructure increasingly dependent on shrinking supplies of oil and stubbornly resistant to adapting to menacing climate change. Extraction of rainy day funds from sunshine sectors was denied.
Both the governor and Republican legislators claim a mandate against any increase in taxes from the May 19 election, but neither election analysis nor public opinion assessments substantiates their claims. Long-term remedy lay not exclusively in spending cuts but in overcoming application of the two thirds rule. Continued tyranny by this highly disciplined minority will continue to consolidate economic and political power in the hands of winners taking all, depriving the rest of the broad incentives needed by the capitalist system it claims to represent. Instead, its “gusher up” policies disguised as “trickle down” have led to systemic breakdown, in which most who expect to win lose, and to destruction, not the “creative destruction” touted by its ideologists. Regenerative creativity has to come from policies based on experience, not ideological fantasy. Crisis may bring opportunity but institutionalized stalemate does not. Heaping blame on the boxed-in majority in the legislature produces more stalemate, not creative change. It merely serves to perpetuate the tyranny of the minority, results of whose ascendancy have now come home to roost.

By Allen Dirrim, GOOD Club President

     Controversy over what message California voters sent on May 19 heats up as the governor proceeds to
propose cuts that allocate most of the pain to the young, the old, the infirm, and the poor, treating these cuts as mandates of the electorate. The governor is correct in claiming that tax avoidance was a major factor in the
election, but there is no reason to treat its outcome as a mandate to apply the policies of the Republican minority in the legislature
    The narrow slice of eligible voters who actually voted on May 19 had differing reasons for rejecting the
financial propositions. Only Republicans who believe that turning California finances over to the tender mercies
of Wall Street will solve California’s problems can feel that their election goals are being fulfilled.

    Election campaigns did little to generate support for the financial propositions. A sharp decline in revenues made them obsolete before the polls opened, indicating that their authors had seriously misjudged the momentum and depth of the decelerating economy. Democratic officeholders were stuck with defending a compromise extorted from them by a disciplined minority having veto power thanks to the two thirds majority for budgets and taxes required by the constitution. Except for oil and gas producers, big business had little need to enter the fray because they had already obtained permanent tax reductions. Support for Prop IA came mainly from businesses subject to potential tax increases—gas and oil extractors, tobacco, entertainment, and for-profit sports—plus educators wooed by Prop IB. Given the choices offered, voting either Yea or Nay favored corporate and financial tax evaders who had long shifted the growing tax burden onto personal income tax payers, whose resentment of taxes could be counted on for further anti-tax campaigns. There was no place for voters seeking escape from the system whose symptoms of dysfunction long predated the collapse of the housing bubble. But thanks to the price extracted for his vote, one legislator provided them with a whipping boy for their frustrations, Prop IF. Voters were spared thereby from attributing much of their woe to previous propositions approved by previous voters .

    So we now have a situation described by Naomi Klein’s Crisis Capitalism. Big winners from unregulated
markets produce crises and then exploit the crises to abolish any social contract redressing dangerous
imbalances in the distribution of wealth and income. For tax-hating ideologues, this crisis provides cover for
repealing all welfare except corporate welfare. 

    Now is the time for Democratic leaders and activists to frame this reality for the public. Constitutional
reform – or at least breaking the veto power of the minority—is a prerequisite for recovery from the current
economic meltdown. Constitutional reform in itself will not restore the artificial debt-based “good times” of the
recent past, but allowing Reaganite conservatives to turn California into a failed state endangers not only
Californians at large but also those beyond our borders.

By Allen Dirrim

     Controversy over what message California voters sent on May 19 heats up as the governor proceeds to
propose cuts that allocate most of the pain to the young, the old, the infirm, and the poor, treating these cuts as mandates of the electorate. The governor is correct in claiming that tax avoidance was a major factor in the
election, but there is no reason to treat its outcome as a mandate to apply the policies of the Republican minority in the legislature
    The narrow slice of eligible voters who actually voted on May 19 had differing reasons for rejecting the
financial propositions. Only Republicans who believe that turning California finances over to the tender mercies
of Wall Street will solve California’s problems can feel that their election goals are being fulfilled.

    Election campaigns did little to generate support for the financial propositions. A sharp decline in revenues made them obsolete before the polls opened, indicating that their authors had seriously misjudged the momentum and depth of the decelerating economy. Democratic officeholders were stuck with defending a compromise extorted from them by a disciplined minority having veto power thanks to the two thirds majority for budgets and taxes required by the constitution. Except for oil and gas producers, big business had little need to enter the fray because they had already obtained permanent tax reductions. Support for Prop IA came mainly from businesses subject to potential tax increases—gas and oil extractors, tobacco, entertainment, and for-profit sports—plus educators wooed by Prop IB. Given the choices offered, voting either Yea or Nay favored corporate and financial tax evaders who had long shifted the growing tax burden onto personal income tax payers, whose resentment of taxes could be counted on for further anti-tax campaigns. There was no place for voters seeking escape from the system whose symptoms of dysfunction long predated the collapse of the housing bubble. But thanks to the price extracted for his vote, one legislator provided them with a whipping boy for their frustrations, Prop IF. Voters were spared thereby from attributing much of their woe to previous propositions approved by previous voters .

    So we now have a situation described by Naomi Klein’s Crisis Capitalism. Big winners from unregulated
markets produce crises and then exploit the crises to abolish any social contract redressing dangerous
imbalances in the distribution of wealth and income. For tax-hating ideologues, this crisis provides cover for
repealing all welfare except corporate welfare. 

    Now is the time for Democratic leaders and activists to frame this reality for the public. Constitutional
reform – or at least breaking the veto power of the minority—is a prerequisite for recovery from the current
economic meltdown. Constitutional reform in itself will not restore the artificial debt-based “good times” of the
recent past, but allowing Reaganite conservatives to turn California into a failed state endangers not only
Californians at large but also those beyond our borders.

By Allen Dirrim

On April 8th the club took up the issue of Proposition 1A on the May 19th ballot, which is, in fact, a constitutional amendment. Our speaker was Paul Chatman, President of the Ocean View School Board.

According to Paul, the language in the proposition is unclear, making an already complicated proposition more confusing. In essence, Proposition 1A does three things:

1- It requires that a percentage of state revenues be set aside each fiscal year in a “budget stabilization fund” (Rainy Day Fund) until the fund reaches 12.5% of the state general fund. (Note: Whether this would be done in a deficit year is unclear.) California already has a Reserve fund but 1A changes how large the fund must be and how, when and for what it can be used.

2- Prop 1A is presented as a spending cap because until the target amount in the Rainy Day fund is reached, the amount spent cannot exceed the budget from the previous year plus factors for inflation and population increase. Pending that outcome, the fund could only be used for emergencies (fire, earthquake, etc.) or bond repayments and repayments of funds to Education, which latter caveat ties it to Proposition 1B, a repayment formula to begin in 2011. Even if 1B passes, it cannot be implemented if 1A fails. In addition, 1A does not actually limit state expenditures from other pots of money or other tax or fee increases.

3- Prop 1A extends for 1-2 years the recently passed two-year-only tax increases: the state income tax increase of .25% is extended thru the 2012 tax year; the vehicle license fee increase which went to 1.15% of vehicle value through 2013; the 1% sales tax increase through 2012.

Chatman made other important points. He says that 1A extends the piecemeal budgeting for which California is infamous, that it is really a short term fix, which is again typical of California’s budget process, and that it ties the hands of subsequent governors and legislatures. He indicated that the reasons for this are first, that term limits mean present members of the legislature have no reason to care how these “fixes” affect the maneuverability of their successors. Second, the prevalence of safe districts leads to fewer moderates on either side and third, the need for a 2/3 majority to pass a budget means a minority of legislators can hold the budget hostage. This, in turn, leads to the kind of ballot box budgeting represented by the May 19th propositions.

At the same time, we know that California is in dire straights. The Rainy Day fund established by Proposition 1A, and 1B would, beginning in 2011, restore most of the educational funding by directing that 1.5% of the fund go to education. The proponents claim it would stabilize the budget process and ensure the state puts aside money for “a rainy day” and does not spend wildly in good revenue years.

Because of its complications, the fact that it locks in formulas in a constitutional amendment that is difficult for the electorate alone to change, because it does nothing to address problems like the need for infrastructure spending and because it does nothing to address the dysfunctional budget process itself, many of the usual political allies are split on whether to support it or not. The California Teachers’ Association supports it. School administrators also support it. But the California Federation of Teachers opposes it as does a large faction of SEIU and the League of Women Voters.

A lively discussion following Paul’s presentation made it clear that the GOOD Club is, so far, also of two minds on Propositions 1A (and the other ballot measures). At the May 13th meeting we will hear more about it from Scott Frisch who will also address the other propositions.

by Ruth Capelle and Lauraine Effress

On April 8th the club took up the issue of Proposition 1A on the May 19th ballot, which is, in fact, a constitutional amendment. Our speaker was Paul Chatman, President of the Ocean View School Board.

According to Paul, the language in the proposition is unclear, making an already complicated proposition more confusing. In essence, Proposition 1A does three things:

1- It requires that a percentage of state revenues be set aside each fiscal year in a “budget stabilization fund” (Rainy Day Fund) until the fund reaches 12.5% of the state general fund. (Note: Whether this would be done in a deficit year is unclear.) California already has a Reserve fund but 1A changes how large the fund must be and how, when and for what it can be used.

2- Prop 1A is presented as a spending cap because until the target amount in the Rainy Day fund is reached, the amount spent cannot exceed the budget from the previous year plus factors for inflation and population increase. Pending that outcome, the fund could only be used for emergencies (fire, earthquake, etc.) or bond repayments and repayments of funds to Education, which latter caveat ties it to Proposition 1B, a repayment formula to begin in 2011. Even if 1B passes, it cannot be implemented if 1A fails. In addition, 1A does not actually limit state expenditures from other pots of money or other tax or fee increases.

3- Prop 1A extends for 1-2 years the recently passed two-year-only tax increases: the state income tax increase of .25% is extended thru the 2012 tax year; the vehicle license fee increase which went to 1.15% of vehicle value through 2013; the 1% sales tax increase through 2012.

Chatman made other important points. He says that 1A extends the piecemeal budgeting for which California is infamous, that it is really a short term fix, which is again typical of California’s budget process, and that it ties the hands of subsequent governors and legislatures. He indicated that the reasons for this are first, that term limits mean present members of the legislature have no reason to care how these “fixes” affect the maneuverability of their successors. Second, the prevalence of safe districts leads to fewer moderates on either side and third, the need for a 2/3 majority to pass a budget means a minority of legislators can hold the budget hostage. This, in turn, leads to the kind of ballot box budgeting represented by the May 19th propositions.

At the same time, we know that California is in dire straights. The Rainy Day fund established by Proposition 1A, and 1B would, beginning in 2011, restore most of the educational funding by directing that 1.5% of the fund go to education. The proponents claim it would stabilize the budget process and ensure the state puts aside money for “a rainy day” and does not spend wildly in good revenue years.

Because of its complications, the fact that it locks in formulas in a constitutional amendment that is difficult for the electorate alone to change, because it does nothing to address problems like the need for infrastructure spending and because it does nothing to address the dysfunctional budget process itself, many of the usual political allies are split on whether to support it or not. The California Teachers’ Association supports it. School administrators also support it. But the California Federation of Teachers opposes it as does a large faction of SEIU and the League of Women Voters.

A lively discussion following Paul’s presentation made it clear that the GOOD Club is, so far, also of two minds on Propositions 1A (and the other ballot measures). At the May 13th meeting we will hear more about it from Scott Frisch who will also address the other propositions.

by Ruth Capelle and Lauraine Effress

by Carmen Ramirez

On March 11, we will hear about the consequences for education in the current California budget.

Glenston Thompson, the Chief Business Official for the Oxnard School District will discuss the impact that the budget will have on 15,400 students, their families and the teachers and staff of the district. Dr. Renny Christopher, Associate Vice President for Faculty Affairs, at Cal State University Channel Islands will discuss the challenges to higher education in California and specifically to our local university.

“Our public schools play a fundamental role in the community. The responsibility to properly educate our children and prepare them for the future has never been more daunting. …The fact that California spends $1,900 less per pupil than the national average is shameful. When comparing California to the other 49 states in our great nation, California ranks 47th out of 50 based on per pupil spending. That’s a ranking where being number 50 is the worst. Could it be that we will rank 50th out of 50 in 2009-2010 school year? Hard to believe when our state is in and of itself the 8th largest economy in the world. With the release of Governor Schwarzenegger’s proposed budget for 2009-2010, we could end up spending our already limited and strained resources begging for funds for our 15,400 students. Why? “We have 15,400 reasons to demand their rightful priority in the infrastructure of our state” from Oxnard Interim Superintendent, Janis Duran.

From California State University Chancellor Charles B. Reed: “ [T]he California State University will face an increasingly challenging fiscal situation over the next 17 months and beyond as a result of the budget package passed by the Legislature and signed by Gov. Arnold Schwarzenegger… The budget reduces state general fund support to the CSU for the current fiscal year, 2008-09, by $97.6 million, and calls for an additional $66.3 million cut for 2009-10. Overall, the reduction places CSU $283 million below its operational needs, or approximately 10 percent. Also, the 2009-10 budget includes an additional $50 million cut to the CSU, depending on the size and scope of the federal stimulus package. This will impact our ability to maintain quality and services for our 450,000 current students, and we have already been forced to reduce incoming student enrollment levels for this fall.”

Come and learn about our situation and what we can do about it.