Last year, hopes were raised after Dianne Feinstein, the Democrat who is California’s senior senator, and House Republicans reached agreement on a drought-amelioration package that included pushing for more water storage projects and increasing water exports south of the Sacramento-San Joaquin Delta. A bill introduced by freshman Rep. David Valadao, R-Hanford, passed the House in December, but some of its details relating to the relaxing of environmental regulations led Feinstein to oppose the measure, and it failed in the Senate.

Six months later, the California drought has gotten far more attention because of Gov. Jerry Brown’s April order of massive cutbacks in use by residents and most businesses. But as McClatchy is reporting, the House-Senate split over what to do remains intact:

WASHINGTON — Five months into a new Congress, and deep into a lasting drought, California water legislation still stymies and splits the state’s lawmakers.

 

Draft copies are tightly held, as if stamped Top Secret. Myriad details are in flux. The legislative timing, though a June 2 Senate hearing could yet happen, remains unsettled. Democrats are divided; some are distinctly unhappy.

 

It all sounds so familiar, and yet there’s still no telling how this movie ends.

 

“Right now, I don’t know,” a gloomy sounding California Democratic Sen. Dianne Feinstein said Thursday, when asked about the prospects for a bill. “It’s very difficult to put something together. Obviously change is controversial, so to propose something and then not to be able to do it makes no sense.”

Fellow Dems accuse Feinstein of ‘secret jam job’

A bloc of Northern California House Democrats, meanwhile, has pressured the senator to be given a role in negotiations over a compromise.

That led to unusual on-the-record criticism directly from Feinstein: “It doesn’t do any good to say, ‘Let us see your language so we can rip it apart.’”

On water, she appears to have more agreements with Republicans than Democrats on some key issues — and they’ve noticed, as McClatchy has reported:

“We certainly hear about it, involving a sub-group of stakeholders working on drafts that we haven’t been allowed to see,” Rep. Jared Huffman, D-San Rafael, said in an interview. “Far from a transparent regular order, it feels like we’re right back to secrecy and exclusion, and that’s very disappointing.”

 

Complaints about secrecy and exclusion helped undermine legislation last year. Huffman and six other Northern California Democrats subsequently met with Feinstein in January.

 

That was their high-water mark. Since then, the lawmakers who represent the Delta say they’ve effectively been shut out even though they’ve been asked what they want.

 

“It’s a terrible way to do a bill,” Huffman said. “Instead of trying to do this right, which is inclusive, deliberate and transparent, this is a secret jam job.”

Brown administration not in the mix

None of recent coverage of water legislation maneuvering indicates the administration of Gov. Jerry Brown is trying to shape the congressional legislation.

In December, however, one of his Cabinet members issued a statement objecting to House Republicans’ approach and its focus on changing federal environmental policies in the Delta. “Our collective energies should be devoted to a long-term solution for California’s water needs in a way that rewards working together, as opposed to dividing interests,” said John Laird, secretary of the California Department of Natural Resources.

By Wayne Lusvardi

The first wisdom of politics is that things often are not what they seem.  This appears to be the case with the much ballyhooed report that former California State Parks Director Ruth Coleman “hid” $54 million in the off-road vehicle recreation special fund.

A scandal broke out based on reports that the state was too broke to keep open 70 state parks while the Parks Department allegedly had $54 million or more in so-called “hidden” accounts.

In her resignation letter, Coleman said that she was “unaware of the excessive balance” of $133 million in the Off-Highway Vehicle Trust Fund (see Item Nos. 111, 112, 113 in Department of Finance report on special funds).  If Coleman was “hiding” funds. as charged John Laird, Secretary of the Natural Resources Agency:

* Why was the money hidden in plain sight in three accounts designated “Off-Highway Vehicle Trust Fund,” under Fund No. 0263. Which was authorized under the: (a) “Budget Act of 2008 as amended by Chapter 2, Statutes of 2009, Third Ext. Session,” (b) the “Budget Act of 2009,” and (c) the “Budget Act of 2010 as amended by Chapter 13?”

* Why, on May 31, 2011, did State Assembly Budget Committee No. 3 on Resources and Transportation vote to raid the Off-Highway Fund to transfer the funds to the General Fund, as reported by many off-road vehicle recreation organizations?

* Why, on June 6, 2011, did the Public Employees for Environmental Responsibility, stacked with envious state park employees, publicly protest that Off-Road Vehicle fund manager Daphne Greene was not sharing her program’s surplus with its “impoverished agency”?

* Why, on May 6, 2011, did the State Parks Department issue a solicitation for consulting real estate appraisal services through BidSync online bidding services for the acquisition of 415 acres of land to expand the Ocotillo Wells State Off Road Vehicle Park in Imperial County? The likely source of the funds for this land acquisition would have been the Off-Highway Vehicle Trust Fund.

* Why was the Off-Highway Vehicle Trust Fund reported to be a “Special Fund” instead of a “Trust Fund”?  According to off-road organization attorney Diana Tweedy, Trust Funds do not have the same legal status as a Special Fund and cannot be transferred to the General Fund without a state constitutional amendment.

* How could the Off-Highway Fund be “hidden,” when it was re-authorized and amended so many times by the Legislature since 2008?  How could it have been “hidden” if the state Assembly voted to raid the fund in 2011?  How could the fund have been “hidden” if “Public Employees for Environmental Responsibility” brought it to the public’s attention way back in mid-2011?  Why did State Parks initiate activities to expand existing state off-road vehicle parks in mid-2011 from the same fund, if the fund was “hidden?”

An Old Fashioned Grab of Highway Funds

Perhaps the answer to these questions lies with off-roader attorney Diana Tweed’s “Legal Memo” that the Off-Highway Vehicle Fund was a Trust Fund that was funded from a share of gasoline taxes and user fees from state off-road recreation parks.

Which brings us to the second wisdom of politics: “What is alleged to be ‘hidden’ may be a ‘red herring’ meant to divert attention from what is really going on.” Just as smelly fish were used to throw hound dogs off the scent of a fox, so it is with political diversions.

The recent state park special fund scandal apparently is an old-fashioned raid on highway funds.  Only in this case the highway funds are sitting in the accounts of the State Parks Department designated for land acquisition for off-road vehicle recreational parks.  Then why is there what appears to be a cover-up?

Why a Diversion?

While Coleman was allegedly hiding funds, cities and non-profit agencies were raising funds to keep state parks open in their regions so as not to deter tourist trade. How could politicians explain that they were exaggerating that the state was broke, and had no funds to keep all state parks open during an election year?   What Gov. Jerry Brown is doing is purging “Special Funds” — also known as “political earmarks” — and transferring those monies into the deficit-plagued “general gund.”

The Off-Highway Vehicle Recreation Division is a section of the State Parks Department that is not dependent on general funds.  It is self-sufficient and relies on a share of the gasoline taxes generated from the mileage of off-road vehicles and user fees from state off-road recreation parks.  Technically, the Off-Highway Vehicle Trust Fund is not a “special fund,” but a trust fund, just as there is a highway trust fund.

Another apparent reason for the political diversion about “hidden funds” is that there has been an ongoing political and bureaucratic tug-of-war between “preservationists” and “off-roaders” within the Parks Department and the state Legislature.  Off-roaders also tend to be inclined toward being Republican.  A question remains as to whether off-roaders will find a basis to sue the state over the transfer of these “hidden funds.”

Coleman is a registered Democrat with a long track record in state government.  She will likely end up serving elsewhere in government after serving as the “sacrificial lamb” in this political charade.

Fund Raid Takes from Double Tax — When Will It End?

Off-road attorney Diana Tweedy sumed it up best:

“With hundreds of millions of dollars in unpaid loans and the latest permanent and ongoing taking of OHV funds, off road enthusiasts are feeling the pinch. The general fund is supported with income and sales taxes paid by all the Californians. The diversion of OHV Trust Fund moneys to the General Fund is a second tax exclusively paid by off road enthusiasts on top of taxes they pay to the General Fund. These taxpayers are angry and will not put up with politics as usual unless something is done to address their grievances.” 

“Due to hundreds of millions of dollars in unpaid loans and the latest transfer of almost ten million dollars a year from the OHV Trust Fund, the mission of the OHV Program is in jeopardy. The transfers are interfering with Core Program objectives preventing the OHV Program from achieving its purpose. The loans must be paid back and the latest transfer must be revoked before the OHV Program can meet its objectives. 

“Epilogue — In May 2012, the Assembly Budget Committee voted to take more money from the OHV trust fund. When will this ever stop?”

Californians just want to have fun. But the politicians just want more money to waste and are grabbing it wherever they can.

Republican Sam Blakeslee Tuesday beat Democrat John Laird for the open state Senate seat. I hope Blakeslee is more faithful to taxpayers that was the man who previously held the seat until he left it in May to become Lt. Gov., Abel Maldonado.

Back in 2006, four long years ago, I was on a panel discussion with Laird. The guy was obsessed with increasing taxes — even during those boom times. It was that tax-and-waste mentality that dumped the state into the budget and economic mess it’s now suffering.

Here’s the unsigned editorial I wrote in The Orange County Register:

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Scapegoating Prop. 13 / Officials lament limits on taxing power

Published: 6/28/2006
And speaking of how state budgets just keep getting bigger ….

A few days ago we joined other editorial writers in questioning three government officials and an association president about state and local government finances at a forum presented by the Commonwealth Club in San Francisco. Our conclusion: Government officials – at least those on this panel – want even more of your money than they’re taking now and are not all that concerned with economies in government.

Henry Gardner, executive director of the Association of Bay Area Governments, criticized “a lack of political will at the state level … a lack of political courage” to raise taxes.

Assemblyman John Laird, D-Santa Cruz, chairman of the Assembly Budget Committee, brought up that he joined 46 other Assembly members in putting “up a vote on the Assembly floor to raise the upper income bracket of income tax to fund the schools,” which was “a deal that the governor walked away from.”

He also lamented that it takes a two-thirds vote to pass a budget in California, meaning restructuring the tax system – including tax increases – requires the cooperation of the usually anti-tax Republican minority. If that cooperation were not mandatory, of course, Democrats could raise taxes at will – and crash the state economy.

(Oddly, Mr. Laird almost seemed to understand that point, remembering that when he was mayor of Santa Cruz, he went “through a groveling exercise because the Mercedes dealership was going to leave town, and the sales tax from that one car dealership in a town of 50,000 provided 5 percent of the general fund budget.” Put another way, if businesses aren’t treated right, they leave a city – even beautiful Santa Cruz – county, state or even a country.)

Betty Yee, an acting member of the Board of Equalization, said she was still optimistic “that we could revisit Proposition 13 if there were some comprehensive system of review of our revenue system.” Thus far, fortunately, Prop. 13 has been the “third rail” in California politics – touch it, and your political career is electrocuted. It will be interesting to see if Ms. Yee’s Republican opponent campaigns on this issue against her this November.

We pointed out that the state is raking in record revenue, with $5 billion in unexpected income this year, and that local governments have seen revenue from property taxes – despite Prop. 13 – go up as much as 90 percent in just the past five years. So budget problems hardly stem from a lack of revenue.

Mr. Gardner replied that, “ The short answer is the taxes don’t keep flowing in” when property values stagnate or decline, as now seems to be happening. Yes, but a 90 percent boost in five years should last a long time.

In the end, it was disheartening to us that these officials were too quick to blame Prop. 13 for the state’s lingering financial straits and to look to higher taxes for relief. But it should be clear that the real solution is not higher taxes, but lower taxes accompanied by the privatization of services and cuts in wasteful or unneeded programs. A growing, competitive and constantly innovating private sector, unburdened by high taxes and regulations, is the best guarantee that the state will have the money for the limited essential services it ought to provide.