These are the numbers everybody works with until his May Revision of the budget. A budget then is passed by June 15, as required by the California Constitution.

For decades, the budget rarely came in on time. But it has done so in recent years for three reasons.

First, the economic recovery has erased the deficits of the later years of Gov. Arnold Schwarzenegger’s tenure.

Second, Brown actually has been more frugal than the spendthrift Hollywood actor.

Third, in 2010 voters passed Proposition 25, which dropped to a majority vote the previous two-thirds requirement in the Legislature to pass a budget (except for tax increases). Before that, the GOP minority could hold up budget passage until it got  some of what it wanted, such as lower spending in general, or higher spending on favored local pork projects.

The things to look for in Brown’s new budget plan are how much he allocates to education reform, high-speed rail and especially pension reform. His Inaugural Address already said he’ll dedicate “saving $2.8 billion in the state’s new constitutionally protected Rainy Day Fund,” from Proposition 2, which voters passed last November.

At CalWatchDog.com, we’ll be hashing out the numbers for you starting on Friday. (And by “hash,” we don’t mean hashish, but corned beef hash.)

By John Seiler

Just a couple of months ago Assemblyman Nathan Fletcher was being hailed as a new kind of “postpartisan,” “non-ideological,” “bipartisan” politician we need more of in the state Capitol. He had quit the Republican Party after it dissed him during his failed attempt to become mayor of San Diego.

The inimitable tax-obsessive George Skelton wrote in a column, “A telling GOP defection”:

SACRAMENTO — Assemblyman Nathan Fletcher coulda been a contender, to borrow the classic Marlon Brando line from “On the Waterfront.”

He could’ve been somebody.

He still could, conceivably — somebody who wins the prize of high public office, a senator, a governor — but it apparently won’t be while wearing the Republican colors. He tossed them.

We’ll never know, but many believed the San Diego legislator — young, photogenic, articulate, an Iraq combat vet — had the potential to help lead the California GOP out of the darkness, out of its deep funk.

But last week he bolted and became a no-party independent, fed up, he said, with partisan pettiness in the state Capitol.

The analogy doesn’t hold up. In “On the Waterfront,” Brando faced down powerful unions. Fletcher sold out to them.

As my colleague Steven Greenhut reported right here on CalWatchDog.com:

“In reality, Fletcher is by no means independent. He was a life-long Republican hack who ditched the party when it rebuked him and endorsed Carl DeMaio [for mayor]….

“Consider that Fletcher had burnished his GOP credentials as he sought the party’s endorsement, but after the party endorsed someone else, he suddenly did some soul-searching and ditched the GOP. So he went from GOP loyalist to Independent in about 5 minutes, political time-wise.

“Fletcher would love to be attacked by conservatives and libertarians — more proof that his martyrdom was for the greater cause of standing up against right-wing extremists, except it’s not true. In reality, Fletcher is simply a self-serving political climber without serious ideas, someone who will seemingly say or do anything to advance his political interests. He touted his Republican credentials when it helped him and now he blames the GOP — which long tolerated his focus-group-tested voting record. He has long been an ally of public-sector unions.”

Voting for a tax increase

Yesterday, Fletcher voted for a tax increase on businesses. Reported the Bee,

“By a razor-thin margin, the California Assembly passed legislation today to raise a billion dollars annually for middle-class college scholarships by altering tax law for numerous out-of-state corporations.”

Of course, the tax increasers say it will “help” California businesses. But this is rank protectionism — attacking businesses in other states — that will suck money from the California economy because its gives businesses another reason to shun doing business here.

The other vote needed to pass the bill was Assemblyman Brian Nestande, R-Palm Desert. He has to know that this will not help him in Republican politics.

Supposedly, according to the all-knowing, all-powerful Skelton and others, only Republican “extremists” oppose massive tax increases. In fact, after Proposition 25 dropped to a majority from two-thirds the threshold for passing a budget, the only power Republicans have left in the Legislature is over tax increases. Opposing tax increases is their “brand.” Selling out on tax increases is like New Coke: it’s not going to sell.

The tax increase now goes to the state Senate. Let’s see if any Republicans sell out there.

By John Seiler

George Skelton is Shocked! Shocked! that his beloved liberal, high-tax, big-waste Democrats are manipulating the initiative system. Did he expect they were going to run California like Switzerland?

He writes writes about Proposition 25, which allowed a budget to be passed with a majority in each house of the Legislature, instead of two-thirds of members:

“SACRAMENTO — This wasn’t the deal. Californians thought they were only allowing the Legislature to pass a budget on a majority vote. They wanted to unclog the capitol.

“They didn’t intend it as a license for Gov. Jerry Brown to rig the election ballot to benefit his tax-increase proposal.”

Skelton recently was feted for writing about state politics for 50 years, and is friends with Gov. Jerry, and he’s still surprised at this?

Skelton:

“You may remember how Prop. 25 was sold: California was suffering from budget gridlock. State vendors, healthcare providers and schools were being stiffed because of late budgets. State credit ratings were falling. Only two other states required a two-thirds vote for budget passage. It was a seller’s market for votes in the Capitol. Special interests were the brokers.

“All true.

“Prop. 25 has been a good thing. We’ve had two consecutive on-time budgets. No more summer-long Capitol squabbling, no more state-issued IOUs.”

No, we haven’t. Last year’s budget, for fiscal 2011-12, was so unbalanced that Controller John Chiang suspended the spendthrift legislators’ pay, as is required by Prop. 25. After that, a phony “balanced” budget was passed, and met Chiang’s approval, even thought it assumed $4 billion in increased revenues that never materialized because of the state’s tax and regulatory assault on the private sector depressed production, and hence tax revenues. The revenue shortfall triggered cuts.

This year, the budget for fiscal 2012-13, which began July 1, assumes Brown and Skelton successfully hoodwink voters into passing an $8.5 billion tax increase. It’s like basing your family budget on winning next Saturday’s lottery. Voters are in a foul mood at how badly this state is run. The tax increase won’t pass.

Skelton:

“But recently Prop. 25 was shamefully abused by Democrats at the behest of Brown, who paradoxically rode to power four decades ago on a platform of political reform.”

And last year, Brown rode into office promising, in his inaugural address:

“In seeking the Office of Governor, I said I would be guided by three principles. 

“First, speak the truth. No more smoke and mirrors on the budget. No empty promises.”

But his whole career, beginning four decades ago, has been nothing but smoke and mirrors and empty promises.

Skelton:

“Bear with me, because this makes almost no sense.”

Well, Brown, the state government, Prop. 25 and Skelton make as much sense as anything else in this state of insanity.

By Katy Grimes

Reports of California’s debt usually just include the $17 billion budget deficit. But California also owes the federal government $14 billion, and public schools $10 billion.

While California sputters under  the massive debt, legislators continue to take up ridiculous bills and resolutions, and ignore bills which would begin necessary reforms.

Last week the Assembly voted to adopt Assembly Resolution 99 recognizing September 2012 as National Coupon Month. ACR 99 by Assemblyman Felipe Fuentes, D-Sylmar, “would acknowledge the value of coupons in achieving significant savings for California consumers.”

Legislative time has actually been spent on this baffling resolution. The Assembly Rules Committee, notorious for killing Republican bills by refusing to act on them, had a committee staff member prepare an analysis of ACR 99, and committee members voted 6-4 to pass the Resolution.

It is now in the hands of the Senate Rules Committee where it will undoubtedly go through a similar process.

While this trivial resolution sailed through the Assembly, many good-government Republican bills sit stuck in the Rules Committee, or are unceremoniously killed once they make it to the Assembly Appropriations Committee, led by Fuentes.

Good bill

Assemblyman Brian Nestande, R-Palm Desert, has re-introduced ACA 13, a constitutional amendment to give the State Controller the authority to approve the budget. “California has a natural collusion between the Governor and the Legislature,” said Nestande. “This would be like having an independent third party approve the budget, but it’s the State Controller.”

ACA 13 would prohibit the Legislature from sending to the Governor a Budget Bill in which General Fund appropriations exceeded General Fund revenues as determined by the Controller.

Nestande said he originally introduced ACA 13 in 2009, to prevent legislators from passing an unbalanced budget each year just so they can collect their full paychecks. “This measure would require the controller to review estimated revenues and expenditures, and certify that a budget passed by the Legislature is balanced before it can be signed by the governor,” Nestande said.

Nestande said that having the controller certify that the budget is balanced would force the Legislature to produce a legitimate budget, and not just call it balanced.

Interestingly, Texas has done this successfully since 1942.

Nestande said brought this system up again during session last year, but Controller John Chiang shot the idea down saying it would require more staff.

Ironically, last year the Legislature sent the governor its budget $1.85 billion out of balance. It was Chiang who pointed this out and the governor vetoed it.

Good bill stuck in committee

Nestande’s bill would also prohibit either house of the Legislature from adjourning for a recess after sending a budget to the Governor, until the Controller has provided the certification.

But ACA 13 sits in the Assembly Budget Committee with no hearing scheduled. It is highly unlikely that ACA 13 will ever see the light of day.

Nestande said that when voters passed Proposition 25 only two years ago, they thought they were voting on a measure which would require lawmakers to pass an on-time, honest budget by June 15 every year, as a condition of receiving their salaries.

But a recent Superior Court decision stated that Prop 25 actually only said that a majority of legislators could decide whether the budget they passed was balanced, in order to continue to receive their paychecks, even if that budget was bogus.

Included in Prop 25 was the “no budget, no pay” provision, added in by Democrats to convince voters to approve giving the majority party complete control over the budget process. But this sneaky provision had no teeth. There was no enforcement mechanism in Prop 25 to hold legislators accountable if they passed a phony budget, and is why the Superior Court ruled the way it did.

Nestande said that ACA 13 would provide the budget process voters thought they were approving.

California has a $17 billion deficit, owes the federal government $14 billion, and owes the California public school system $10 billion.

ACA 13 would also stop the Legislature from deferring education funding to California’s schools.

Proposition 98 was passed in 1988 requiring a minimum of 40 percent of California’s general fund spending to be spent on education. In 2001, California lawmakers started shorting education funding in order to “balance” the state budget. But the money has to be paid back, and has quickly added up to $10 billion.

ACA 13 will force the Legislature and Governor to account for state funding shortfalls honestly, so that school officials will have a better picture of the actual level of funding their schools will be receiving. Nestande said that if cuts are made to education, it should be done openly and not masked by accounting mechanisms.

By Joseph Perkins

For years, Sacramento’s tax-and-spend Democrats tried to figure out a way to persuade California voters to amend the state Constitution to require a simple — rather than two-thirds — majority of the Legislature to pass the state budget.

In 2010, they finally hit pay dirt with Proposition 25, the so-called “On-Time Budget Act.”

The Democrat-backed measure allowed a simple majority to pass the budget. In exchange, it also included a provision calling for lawmakers to be docked their pay every day they failed to pass the state budget beyond the Constitution’s June 15 deadline.

Without that provision, it is highly unlikely Prop. 25 would have won voter approval.

But that mattered not to Sacramento Superior Court Judge David Brown. On Wednesday, he ruled that state Controller John Chiang overstepped his constitutional authority last summer when he garnished lawmakers’ paychecks after they delivered a balanced budget 12 days late.

Judge Brown’s ruling came in a lawsuit filed against Chiang in January by state Senate President Pro Tempore Darrell Steinberg, D-Sacramento, and Assembly Speaker John Perez, D-Los Angeles, which argued that the Legislature complied with Prop. 25 last year by sending a state budget to Gov. Jerry Brown by June 15.

Of course, the governor vetoed the bill June 16, admonishing his fellow Democrats in the Legislature for sending him a supposed “balanced” budget that “contains legally questionable maneuvers, costly borrowing and unrealistic savings.”

Chiang reached the same conclusion as Gov. Brown after conducting his own analysis of the Legislature’s budget. And, per the directive of the “On-Time Budget Act,” the controller docked lawmakers’ paychecks until they sent the governor a revised budget that was not so obviously imbalanced.

Court explanation

Brown acknowledged Chiang’s authority to “audit all claims against the state and all claims for the disbursement of any state money for correctness and determine whether the law supports payment.”

Yet, the judge held that Chiang violated the Constitution’s “separation of powers” clause by refusing to pay lawmakers for their June 15 budget that, according to the judge, was balanced “on its face.”

He left it up to the Legislature alone — not Chiang, not even the governor — to determine whether lawmakers’ truly have passed a balanced budget.

Well, if Brown’s ruling stands, it will be business as usual in Sacramento. Steinberg, Perez and their spendthrift colleagues “will be able to keep their salaries flowing,” said Chiang, “by simply slapping the title ‘budget act’ on a sheet of paper by June 15.”

What particularly troubles about Brown’s ruling is that, while he is deferential to the Legislature (to a fault), he clearly couldn’t care less about the will of California voters.

Indeed, he blithely accepted the contention of Steinberg and Perez that the Legislature’s June 15 budget last year complied with Prop. 25. But the smoke and mirrors lawmakers employed to produce their dubious first budget was absolutely not what the state electorate had in mind when it approved the ballot measure two years ago this November.

Prop. 25 has proven a bait and switch. The voters did away with the constitutionally required supermajority to pass a state budget in favor of a simple majority. But Judge Brown has taken away the threat lawmakers faced of reduced paychecks when they fail to deliver a genuine balanced budget by the constitutional deadline.

In an unprecedented move, Controller John Chiang just suspended Legislators’ pay for not passing a budget by June 15, as is required by Proposition 25. In a press release, his office explained his action:

His analysis sought to determine whether the budget met the requirements of Proposition 25 and Proposition 58, which forfeit Legislative pay if a balanced budget is not passed by June 15.

“My office’s careful review of the recently-passed budget found components that were miscalculated, miscounted or unfinished,” said Chiang. “The numbers simply did not add up, and the Legislature will forfeit their pay until a balanced budget is sent to the Governor.”

According to the Budget Analysis on the Controller’s Web site, the budget is $1.9 billion in the red — unbalanced.

Major shortfalls include $1.3 billion in additional spending needed to meet the Prop. 98 spending requirements. And the following fees were overestimated: $320 million hospital fee from SB 335; $103 million from SB1X 9 Managed Care Plan Taxes; $300 million AB1X 22 Motor Vehicle Fees; $22 million for increased premiums for Healthy Families; and $209 million for realignment.

On the positive side of the ledger, the SB 156 Jobs Credit was not enacted, reducing spending by $94 million.

Chiang’s action throws the Legislature in turmoil, forcing them to go back and do their jobs right.

He also vindicates Gov. Jerry Brown’s veto of the budget  because it wasn’t balanced.

June 21, 2011

The California Legislature just passed a budget. Less than 24 hours later, the governor vetoed it, leaving many political wonks scratching their heads in wonderment at why Gov. Jerry Brown vetoed a budget from his own party.

Could this have been the plan all along, so that legislators wouldn’t miss a paycheck?

It could be that it’s just another one of Brown’s seemingly random and unpredictable decisions.

Or, as some are speculating, Brown could be trying to take back control of the political direction in the state after failing to gain the votes necessary to pass his budget proposal.

Or more likely, this was the diabolical plan all along.

At a news conference Thursday after his budget veto, Brown said, “For the first time in history, the state budget has been vetoed. That’s big, and it sends a powerful message that all of us have to do more, we have to rise to a difficult but higher level.”

He added, “And I am confident we’re going to get a better budget. Whether I can get the Republicans to vote, that remains to be seen. But I’m certainly going to give them a chance.”

Democrats

With passage of the budget on June 15, legislators did not get their salaries or expenses docked. Even though the budget was full of accounting games, smarmy tricks, column shifts and lies, the sham budget was passed by Democrats with a majority vote.

“Democrats did not act in bad faith. They had little choice but to approve the budget, given that voters passed Proposition 25 in November allowing the Legislature to approve budgets by a simple majority, rather than the old two-thirds vote,” said the Sacramento Bee editorial board.

But this budget had no reforms, no spending cap, was loaded up with illegal tax increases and was not balanced. And taxpayer advocates say that much of it was unconstitutional, including the tax hikes called “fees.”

But the Bee said, “Democrats were left with no good choices.”

Boo hoo. Democrats are hardly victims in this state. Democrats wanted Prop 25. They wrote it, funded it, and pushed it hard. And it passed by a vote of the people. Now they have to live with it.

Only their budget was an end-run around Prop 25. It wasn’t even that clever. It may cost Democrats in the near future.

Republicans

Republicans can no longer be called “the party of ‘No’.” Last March, five Republican Senators demonstrated that they were willing to play ball, met with Brown and tried to come to a bipartisan agreement on the budget. The GOP Five, as they were dubbed, were Tom Berryhill, Bill Emmerson, Anthony Cannella, Tom Harman and Sam Blakeslee. They even were willing to vote to put Brown’s tax extensions on the ballot for a vote of the people, as long as several reform measures were on the same ballot.

But Brown cut off the talks abruptly with the GOP Five in March.

This week, the Legislature passed the budget and spending trailer bills, with Brown immediately vetoing the budget the next day.

Critics are saying that Democrats knowingly passed an unconstitutional budget for self enrichment — to keep their paychecks. One Bee reader asked why this is not considered fraud?

Clueless on Business

Former Republican Sen. George Runner, now a Board of Equalization member, said that the arguments between Democrats and Republicans will continue because Democrats and liberals are unfamiliar with how businesses operate, how jobs are created and how an economy is stimulated through private sector job creation.

“The role of government is not to create jobs — the government is supposed to get out of the way and let business create jobs,” said Runner.

Runner said that this latest budget scam is meaningless and thoughtless, and an indicator of a paycheck motive instead of what’s good for the people of the state.

It is apparent that the message among Democrats was, “Go ahead and sign this budget. The governor won’t sign it, so it doesn’t matter.”

Runner said that he met with eBay and Amazon this week and both companies told him that the online sales tax will cost them jobs — or they can pull out of California.

Runner said that Microsoft wants to expand on the West Coast, but California is too risky because legislators continue to push anti-business and tax proposals. Higher taxes cost employers jobs because taxes come right out of the employer’s pocket. Just because a new tax is imposed doesn’t mean that the business owner can pass the cost along to the customer. That’s what Democrats do not understand. Businesses eat higher costs, and end up doing it by cutting jobs, pay and benefits just to keep a business open.

“It’s going to get ugly,” said Republican Assemblyman Tim Donnelly. “Democrats will end up blowing a big hole in the California economy if they continue on this road.”

Donnelly said that he recently told his Assembly colleagues, “Your policies wiped out 650,000 jobs in the manufacturing sector.”  Despite that, he added, “They continue to push bills requiring fitted or folded sheets. It’s a disaster.”

But not all is lost. Donnelly said, “If Democrats and Republicans come together” — and he thinks there are enough reasonable legislators to do this — “and agree on no taxes anywhere in the budget, we can get people back to work, which needs to be the core focus and centerpiece of the budget.”

Subsidized Green Jobs

Donnelly said that it costs $800,000 to create one green job in California because politicians have decided to prop up green jobs artificially. “It’s costing the state huge amounts of money that we don’t have,” he said.

The only Democrat to vote “no” on the budget was Sen. Leland Yee of San Francisco. And he abstained from voting on most of the budget trailer bills last week because of the cuts made to schools and critical social services, his office reported.

“I voted against the main budget bill because my constituents didn’t send me to Sacramento to increase class sizes, layoff teachers, and hurt public education,” Yee said in a statement.

His vote against the elimination of redevelopment agencies was solely about cuts to schools, his office said. In San Francisco, schools receive $35 million a year from fees on redevelopment projects, which would be lost if redevelopment is eliminated.

Senators Berryhill, Cannella, Emmerson and Harman’s statement in response to the budget vote was interesting: “Today’s actions prove that the bridge tax isn’t a stumbling block — it’s political theater.  The real stumbling block for the Majority Party are the unions and trial lawyers demanding they block the reform proposals we have been pushing for months.”

Democratic Budget Demands

Where this budget goes is anyone’s best guess at this point. Brown has much to prove to California voters, but at least has started by getting out his blue veto pen.

Democratic legislators, however, have demonstrated that they do not have the foresight, maturity or vision to do the job, or even the selfless ability to represent the constituents in their districts.

Democrats have become the tools of the public employee unions and trial lawyers, and California voters witnessed it this week with the passage of the sham budget — even if some of our newspapers didn’t see it.

All of us don’t “have to do more.” Taxpayers and the private sector are already bearing the brunt of California’s recession with job and benefit losses, high unemployment, home foreclosures, higher taxes, inflation and the loss of government services.

This Legislature and governor need to take a quick lesson in economics and get out the red pens. If they can’t or won’t cut wasteful spending where it needs to be cut, they need to step aside and let adults do the job.

— Katy Grimes

By KATY GRIMES

The Legislature Thursday passed the main budget bill, with nearly $14 billion in spending reductions. Budgets would be slashed for libraries, higher education, parks, programs for the poor, universities and colleges, state parks and child care programs.

The budget passed even though Republicans threatened party “turncoats” who might compromise with Democrats on the budget, particularly by supporting higher taxes.

Even the proposal to shift tens of thousands of inmates from state prisons to local jails was approved.

However, the attempt to eliminate the more than 400 redevelopment agencies in the state was not revisited, despite needing only one more vote to pass.

In order to pass Gov. Jerry Brown’s budget and place the income, sales, and vehicle taxes extensions on the June ballot before the taxes expire, Brown needs four Republicans to go along. But he doesn’t have the votes yet.

With the California Republican Party convention taking place this weekend in Sacramento, Republicans appear to have held off Brown’s budget and ballot initiative this week. Many expect that arm-twisting for party unity will be the focus this weekend. But legislators could meet today and try to push through the redevelopment cuts, which Republicans are barely holding at bay.

The questions remain: Will this end up being an all-cuts budget? Or will Republicans succeed in getting reform measures on the June ballot together with Brown’s tax extensions?

Senate Republican Leader Bob Dutton (Rancho Cucamonga) said In a statement last evening:

Unfortunately, Senate Democrats have passed a budget without Republican support. This budget grows government by 30 percent over the next three years and relies on the hope that Californians will increase their own taxes by $50 billion during the next five years. Senate Republicans will continue to fight for a state budget that puts people back to work, includes long-term solutions, and puts an end to government as usual.

The cuts to health and social services are being criticized by Republicans because service recipients are targeted. The GOP instead wants the focus put on heavy administrative costs, the excessive number of employees within state agencies and bloated overhead.

“We want to make clear that the cuts were difficult to make, but we need to do our jobs,” Senate President Pro Tem Darrell Steinberg responded.

This was the first budget vote where legislators implemented Proposition 25, which allowed a state budget to pass with a majority vote instead of the two-thirds margin previously needed. In the Senate, the vote was 25-15. In the Assembly, it was 52-26.

The vote to eliminate redevelopment agencies, however, still requires a two-thirds vote.

Giving some insight to the Republican strategy, San Luis Obispo Republican Sen. Sam Blakeslee said yesterday that if Democrats will not accept a spending cap, pension reform or regulatory reform, they should use a “one-party solution” and approve Brown’s tax extensions on a party-line majority vote.

In a legal opinion after the last election, the state’s Legislative Counsel lawyers told Republicans that Democrats could put taxes on the ballot with a majority vote — but only under certain circumstances. Any change would have to be consistent with the “scope or effect” of the initiative.

A majority vote to place a tax-increase on the ballot would have to be tied to a pre-existing initiative. Otherwise, it would risk being charged with “an unconstitutional delegation of legislative power.”

Even with no apparent Republican support, Brown insisted Friday that he is not even considering a majority-vote tax strategy.