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CA Budget Deadlock Continues

Budget Deadlock Continues
Lawmakers in Sacramento are still in a deadlock over how to close the state's $26.3 billion budget deficit. What are the main areas of disagreement between the Republicans and Democrats? And, will lawmakers reach a budget agreement before their planned vacation begins this weekend?

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

California Budget Delays Continue

GLORIA PENNER: I'm Gloria Penner. I'm joined by the editors at the roundtable these days in San Diego. Today, we'll look at the latest developments in the state budget crisis. The editors with me today are John Warren, editor and publisher of San Diego Voice & Viewpoint. It is so good to see you, John.


JOHN WARREN (Editor/Publisher, San Diego Voice & Viewpoint): Thank you. Good morning, Gloria.

PENNER: Good morning. Michael Smolens, politics editors for the San Diego Union-Tribune. Welcome back, Michael.

MICHAEL SMOLENS (Political Editor, San Diego Union-Tribune): Good morning, Gloria.

PENNER: It's been a while. And JW August, managing editor for KGTV News 10. JW, it's always a pleasure to have you in our studio.

JW AUGUST (Managing Editor, KGTV-TV 10News): Top o' the morning to you, Gloria.


PENNER: Thank you. Our call-in phone number is 1-888-895-5727. We have a lot of hot stories this morning. You'll want to call us at 1-888-895-KPBS. Well, here's what we know about the state budget talks. After weeks of partisan sniping, with threats from the governor, the Assembly Speaker boycotting the meetings, hundreds of millions in state IOUs refused by banks, a major drop in California's credit rating, the state legislature seems paralyzed. And then the days until summer recess and family vacation time dwindle down to a precious few, and suddenly there was some activity in Sacramento but no agreement. So my – the Senate adjourned yesterday before noon with plans to return to Sacramento on Monday and summer recess has been postponed, naturally. Does that mean that the pressure is off our hardworking politicians to approve a budget?

SMOLENS: Gloria, the notion of hardworking politician, you mentioned, it was almost dripping in your voice in terms perhaps some cynicism. No, I don't think the pressure's off. Actually, as you had mentioned, that it was kind of interesting all week that they're, despite some of the walkouts and things like that in recent days, there was some happy talk that they were very close and, indeed, they are. It's interesting that they're apparently very close on an agreement on the cuts, which are going to be massive and painful. We thought something was going to happen like Thursday but what they're hung up on, as often is the case, is education funding. Interestingly, not so much the immediate numbers but future repayment. It gets very complicated and involves, of course, Proposition 98, which sets a, you know, base threshold for education funding. And the real dispute is sort of technical that they all agree education cuts should be restored when the economy improves but the Democrats think that the language in the initiative is a little vague and they want to lock that in for future years as well to make sure that those repayments happen in – when there's future downturns and cuts. The governor says Proposition 98 was approved by the voters, you have to go back to the voters to do that, we don't want to do that. He's agreeing that the cuts over the past year should be restored when the economy improves. So it's kind of interesting that after all the hue and cry about the amount of money being cut, that's not really the issue so much anymore. It's really sort of this, you know, kind of the sanctity of repaying the education cuts in the future so…

PENNER: Well, there's no…

SMOLENS: …it gets complicated.

PENNER: …there's no question that they're planning to repay the education cuts, it's just a matter as to whether they're going to memorialize that agreement in writing.

SMOLENS: Yes, but in the past there have been disputes and there have been some claims that – that promises have been broken, that repayment hasn't happened. They've gone to court to force repayments and so forth. So I think people want to avoid that but the – you know, the broader perspective is that, you know, there's a couple of things you can do in terms of the budget situation. You can, you know, increase revenue via taxes, which the Republicans and the governor are very solid and they can block, so it's a matter of cuts and it's going to be sweeping and devastating. What was interesting about the education cuts is that before the Proposition 98 issue surfaced, there wasn't that much criticism from the education community. Sure, they didn't want the cuts but one of the things not many people talk about is a lot of money is being backfilled from federal stimulus into education. We look at the transportation funds and things like that, what this really means is that even when they get a deal this year, next year is going to be a whole lot worse because they don’t have that fallback. That's not to say that the federal money is going to cover all the cuts, there's going to be a lot of pain.

PENNER: John Warren, let's bring your wisdom into this. I'm listening to what Michael Smolens says about the reason for the delay, which seems to be on kind of a technicality. Is this an excuse?

WARREN: I think it certainly is. I think the people of California are missing a bigger point here, that there is a philosophical battle that has come down to life and death for many people in this state based around the budget. And the education is just a subterfuge. We have a lame duck governor who has nothing to lose politically. I'm very concerned when I hear that we have reached agreement. I don't understand how, for instance, good and evil can reach an agreement and good still benefit. And we have members of the Senate and the Assembly who have not done their best in terms of serving the people of California. So I don't think anyone should be looking at this as a happy time. We should be concerned still about the people there. I did an editorial this week which really suggested that we should recall both the Assembly and the Senate and send a message to people that this kind of nongovernance is criminal and nonacceptable.

PENNER: Well, those are strong words from John Warren. I'd like to turn to our listeners before we go to JW August and see if you agree. Do you think that it is really time for the people of California to do something fierce and ferocious like recalling your legislators in Sacramento. Or you going to – Are you willing to give them a little more time? Or a lot more time? Our number is 1-888-895-5727, 895-KPBS. JW, in your estimation, is California in worse shape than most other states? You know, because it rose so high for so many decades. We were the leaders in education. We were the Golden State. We were the place where people wanted to…

AUGUST: Right. Where the streets were paved in gold and there was opportunities galore.


AUGUST: Well, yes, our image certainly has shrunk a little bit. It's – And we're having problems. I think there's three other states that have the same sort of issues going on that they have difficulties with their budget. And as to what John said, I would love to throw the bums out but you recall when we threw Davis out of office, it's ironic, they've lowered our rating, the state's rating, and it's at the level it was when Davis was tossed. So I don't know if when you throw one bum out, there's another bum there to take his place. I – There's something fundamentally wrong with the system that we need to deal with. But I also agree there's this huge political struggle where Schwarzenegger is worried about his l-e-g-a-c-y.

PENNER: Oh, I can spell. I can spell that, yeah.

AUGUST: Yeah, that's what he's – that's what he's about.

PENNER: All right, let's hear from Reggie in Chula Vista who wants to become part of this scintillating conversation about our legisla – our lawmakers, that's what they're called, lawmakers in Sacramento, the budget and what's holding it up. Reggie, you're on with the editors.

REGGIE (Caller, Chula Vista): Hello?

PENNER: Hi, Reggie, you're on with the editors.

REGGIE: Yeah, well, how you doing? Well, you know, I – I was listening to your editors and they're very nice. They're very, very nice to these people. These people have been elected to do a job. We've given them plenty of time, again and again and again. It's costing the state more money as they delay. I'm not saying they're stupid, I'm just saying they are being stupid.

PENNER: I see.

REGGIE: Because the thing that they're doing, they're absolutely stupid. It's time – I know you say you don't want to throw somebody out. It's time for them to go.

PENNER: Okay, well , that's certainly a point of view that's being reflected here this morning. Thank you very much, Reggie. And let's hear now from Diana in Encinitas. Diana, you're on with the editors.

DIANA (Caller, Encinitas): Good morning.

PENNER: Good morning. Go…

DIANA: Well, it's been my feeling for sometime that although these are elected representatives, that first all, they spend too much time of their – of the time they're supposed to be working for the people in trying to get elected. But that's a minor point. The other thing is that because many people have had their salaries reduced or jobs lost because of their inability to do their work and reach a budget, that in the event that they cannot do it, their salaries should be reduced five or ten percent.

PENNER: You know, it's interesting, I was just reading – When I have nothing else to do, I read the Secretary of State's website to see what's going on up there. And there are actually some initiatives being prepared for the ballot. This one is in the Attorney General's office and it would do exactly what you said, that if there is no budget, they would take a big hit in their salaries. In fact, maybe not even get their salaries. It'll be interesting to see if that goes in 2010.

John Warren?

WARREN: I'm concerned, as we talk about the budget, that we are – we're dealing with this whole issue and we're looking – we're missing some things. For instance, how do we continue to cut healthcare, home care for people, the elderly, care for children and yet we don't want to touch tobacco or alcohol. We don't want to tax anything. We want everything to stay the way it is. We have 4600 people that have been laid off, another 2,000 coming. Our bond rating reduced down to junk bond status almost, so we won't even be able to borrow money in the near future at the rate that we're going. And this whole thing is collapsing because those who 'have' have taken a very adamant position that they're not going to give up anything to change, and those who say that they're concerned with the safety net do not want to sit down and go back to a concept called zero budgeting, base budgeting, where you start from scratch and structure a budget that would work. And I think that these things have to be addressed along with the financial interests that are controlling the election of people, the law enforcement entities. Those unions determine, the sheriff's associations and all, they determine who gets elected. No one in my time in California has ever gotten elected that did not have the money and support of those unions. So they, in effect, control the state, and not the people.

PENNER: And Michael Smolens?

SMOLENS: Well, reflecting on what the listener had said, you know, limiting, you know, limiting or cutting their salary out when there's no budget has, you know, that's come up and there's a number of different sides as to whether that would apply pressure or force a bad deal. It's hard to imagine anything could force a deal would be worse than what we have now but it would – I think John is getting at is also just the – and – and JW had mentioned, the overall system is broken in a very bad way. There's always going to be special interests that have influence but they're just unable to unfreeze the mindset that's been there for so long and the biggest problem is that while those forces have always been into play, the ballot initiatives have restricted the revenue side and have guaranteed certain spending aspects so they're really in a world of hurt in that regard. And until there's some sort of broad, you know, reform—and I know a lot of different groups are looking at it and it'll be very difficult to do—we're going to have the same problem that will just be, you know, bouncing back and forth depending on how the economy goes.

PENNER: Okay. Let's hear from Lenora in Paradise Hills now, and hear what she wants to say about this. Lenora, you're on with the editors.

LENORA (Caller, Paradise Hills): Ah, good morning.

PENNER: Good morning.

LENORA: I just hope that, you know, that now that we've had sort of a national transition from the right to the left, I'm hoping that the right sided ideologues will realize that, you know, that the people outnumber the special interests. You know, in a Democratic society, that should be realized and that, you know, it's time to take to the streets just like the sixties, you know? And protest until – until they see that in-home supports services, education, healthcare, all of these, these should be basic rights.

PENNER: JW, ready to take to the streets?


PENNER: You think the people of California are – maybe they're losing their mellowness?

AUGUST: It would be nice if they got motivated about this thing. And she's right, these cuts are going to – is particularly going to affect low-income Californians, people that least afford it. And that's not right. It isn't right. They – we pay enough in taxes. We generate enough income that this sort of thing shouldn't be happening. And I – it's the system and the management of the system that's the problem. It's time for a change.

PENNER: Okay, so when we come back right after the break, I really want to talk about that, those sticky issues like cutting more social services and/or raising taxes. I mean, where are we on that? We know education is a stuck point right now but we have those other issues that are being raised this morning, and what has the legislature decided to do about those, if anything. Our number is 1-888-895-5727. This is the Editors Roundtable. Be back in a moment. I'm Gloria Penner.

# # #

PENNER: I'm Gloria Penner. This is the Editors Roundtable. I'm here today with JW August from 10News, and John Warren from San Diego Voice & Viewpoint, and from the San Diego Union-Tribune, Michael Smolens. And we're talking about, you know, the situation in Sacramento, not a happy one. Michael, you raised the issue earlier that it seemed to be moving along this week and then they got stuck on paying back $11 billion to the education system and how they were going to do it. But we have some really massive differences here. One is cutting social services, vis-a-vis raising taxes, and I don't know where we are on that.

SMOLENS: Well, as we were talking during the break, you know, it's been an ongoing struggle. There's – the dynamic is always Republican and Democrat and liberal conservative. But there's even concern and disputes within Democrats – among Democrats about, you know, education is always first at the table in California and a lot of people believe rightly so. But what happens when, you know, the pot of money is limited by, you know, voter initiatives that it's the social services for the poor and indigent and disabled that tend to be the ones that get cut. The governor is looking at he wants to get rid of the CalWORKs Welfare to Work program entirely. In-home support services takes a big hit. And the folks that are helped by this just don't have the advocacy, they're – As we know, the education community, the CTA are very powerful. And so, you know, you sort of get into that struggle as well. And while all the focus seems to be on education because that is what's hanging up the budget, those services and programs are going to take a huge hit. Are they going to entirely get rid of the welfare program? Probably not but it just is going to be a lot of pressure and, you know, these are the poorest of the poor and people that don't have much and whatever little they're getting from the state is going to get even less.

PENNER: So where are the advocates for these people, JW?

AUGUST: Well, I think there are advocates for all the people but they're fragmented. They don't have the ability to raise enough money to get the voice heard. The mass media, if they pay attention to them, just pay attention to them briefly. There's – Because it's not a cohesive effort because everybody has their own different interests, it's very fragmented and it has no effect on the process.

PENNER: John Warren.

WARREN: There have been cohesive efforts launched by entities such as the United Domestic Workers. Those people are directly involved in terms of in-home care and support. And they have been victimized by the County. They are also fighting. And, you know, the problem here is that the people who are in the greatest need are removed so far from those in power that the ones in power don't see the suffering and the hardships. And when you're talking about taking away services to the elderly, you're talking about eliminating in-home support services for people who are ill, if you've been there and you've seen that, then you know that that's a life and death issue. It's also a constitutional guarantee under the 10th Amendment that those responsibilities are delegated to the state and this state has a obligation to take care of its people. And we don't hear that kind of discussion anymore.

PENNER: Michael.

SMOLENS: Well, and also, you know, one thing about those services is, let's not forget, particularly in-home support services, the idea of that is to save money. It prevents a lot of people from being institutionalized whether nursing home or some other institutional care. It's, you know, it's undisputed that it's a cheaper way to go, a more cost effective way to go, and, socially, probably a better way to go for these people. So, you know, there's the, you know, penny wise, pound foolish aspect. You know, if you cut that out, are a lot of these people, are they going to have no place to go but, you know, again become not necessarily wards of the state but be a lot more – cost a lot more money for the state.

PENNER: Okay. So let's hear now from Marilyn in downtown. I think she wants to talk a little bit about what's wrong with the system. Go ahead, Marilyn, we'd like to hear what you have to say.

MARILYN (Caller, San Diego): Thank you. First I want to say that I know there was a golden age in California. I'm 63 and I was born in San Diego and at least for white, middle class people it was a good life and people didn't seem so greedy. And the Republican form of government we have, I think it has to be the citizens' fault, it's the people who vote and the people who don't vote. That's how we got Prop 13, term limits, the locked-in funding for schools, the two-thirds tax and budget requirements, and we can take away all sorts of personal liberties, amend the penal code, make changes that affect people in their everyday lives with a majority vote. But if elected representatives want to raise taxes, it requires a two-third majority and that just elevates money to the most important thing in our lives, and it isn't.

PENNER: Okay. You know, one thing that you left out, Marilyn, and that is the initiative process. There's almost no way of overturning an initiative that gets in that may not be beneficial to the residents of California unless it goes to court, which is very expensive and time consuming. You want to respond to Marilyn.

SMOLENS: Well, just, you know, Marilyn brought up an issue that I know editorial boards around the state get chastised for but the public does take a certain responsibility. Certainly, the system's broken, the politicians are the ones that really need to move, but, you know, we've been passing these initiative that guarantee spending and limit taxes, and, you know, they've been patching through budgets for years, if not decades, and it's sort of culminated in where we are at that. People don't like to hear it. The, you know, editorialists I know get in a lot of trouble and a lot of heat for that but, you know, there is sort of the, you know, having their cake and eating it, too, mentality among a lot of voters and I think they need a dose of reality as well.

PENNER: I think we have time for one more call on this. We'll take it from Rick in Mission Valley. Welcome to the Editors Roundtable, Rick.

RICK (Caller, Mission Valley): Morning.

PENNER: Good morning.

RICK: I'm just going to kind of reiterate one of my complaints which is a lot of this is just due to a lot of safe districts. You know, and this is sort of a pox on both their houses because both the parties have went along with this whole thing. I mean, there's – because of the way the districts are drawn, you can have a recall now of everybody in California and my bet is that most of them would probably be reelected within their districts just because of the way that they've been drawn up.

PENNER: Rick, are you taking any heart from the fact that there's going to be a change, that instead of legislators drawing up districts that there's going to be some panel, supposedly independent panel not touched by politics, to draw up the districts?

RICK: Yes, I like that a lot. It's – And it should've happened a lot earlier than it has.

PENNER: Okay. Final comment from all of our panelists here, and thank you, Rick. I want to start with John Warren.

WARREN: The change in drawing up the boundaries will make no difference whatsoever as long as the monied interests are in position to go in and still purchase the people who come out of that change.

PENNER: Wow, John. People are bought?


PENNER: Okay, Michael.

SMOLENS: I – I sort of agree with John, not entirely. You know, the redistricting aspect isn't a panacea because, you know, people have looked at it and there's only so many – you know, there's so many Democrats and so many Republicans in certain areas that it will increase, you know, by a small amount, the number of swing districts that can really be contested. That will be good. That may change the dynamic but it's not going to be a wholesale change, and, you know, some people think that every district's going to be heavily contested. There's still going to be some very Democratic and very Republican districts but, you know, hopefully that there would be enough to perhaps, you know, allow that dynamic to change a little bit in Sacramento and put some people that, you know, really have contested elections—and most don't—to be subject to the pressures of the public.

PENNER: And your final thoughts, JW August.

AUGUST: I will believe it when I see it.

PENNER: You're talking about the budget.

AUGUST: No, I'm talking about the change, how…


AUGUST: …they gerrymander the districts and everything.


AUGUST: I gave up on the budget. Those yo-yos are going to be up there forever.

PENNER: Oh, sad thought. But here we are.