Gov. Arnold Schwarzenegger is holding a news conference in Fresno right now “to highlight the economic ramifications of the legislature’s failure to pass a real budget solution that would create jobs and provide mortgage relief.” Yesterday, he vowed to veto bills sent to him by the Legislature which would’ve narrowed the state’s staggering budget gap by about 18 billion.
“By exploiting a legal loophole over the definition of taxes vs. fees, Democrats had hoped to sidestep the state’s two-thirds majority hurdle for raising taxes,” my colleague Mike Zapler put it in his article today. “But the part of the package that offended the governor most did not involve the end-run on taxes; instead, Schwarzenegger said the proposal did not go far enough to trim spending and stimulate the economy.”
The governor yesterday accused the Legislature of “playing games.” Hmmm.
“I think the governor is sort of disrespecting the difficulty that both the Senate Pro Tem and the Speaker have had within their caucuses holding together a coalition of agreement over some very difficult choices,” Assemblyman Sandre Swanson, D-Alameda, told me this morning.
Like many Democrats, he said, he wasn’t entirely comfortable with provisions to expedite California Environmental Quality Act (CEQA) reviews to speed up infrastructure construction projects, or with the $2.5 billion in education cuts (though it’s better than the Republicans “draconian $10 billion cut,” he noted).
So this plan “was extremely difficult to put together,” Swanson said, and the governor has some nerve trying to “push this package further to his liking and still have confidence that leadership can still hold its caucuses together without the governor bringing any votes to the table.”
And this wasn’t meant to be a complete fix, Swanson noted – only a stop-gap measure to keep the state’s cash flow moving, with negotiations to continue over the remaining $28 billion gap. If Schwarzenegger vetoes this, he said, the governor will just have to come back not only with a timely counterproposal, but also with a larger package that addresses the whole problem plus three Republican Assembly votes and two Republican state Senate votes.
“He’s playing Russian roulette with the lives of so many working people in the state of California and California’s economy itself,” Swanson warned. “I really think this is a legacy moment from the governor.”
Assembly Speaker Karen Bass, D-Los Angeles, noted in a statement the bills sent to the governor “did $3 billion worth of bond acceleration to get job-creating infrastructure projects moving for transportation, drought relief, park restoration and green technologies;” Swanson had noted to me that every billion in infrastructure spending creates an estimated 18,000 jobs.
But California’s Pooled Money Investment Board has just pulled the plug on 2,000 transportation projects in the state because of the state’s cash crisis, which can’t be solved without a balanced budget in place.
“California’s Treasurer warned today that there would be further dire consequences from Wall Street if Governor Schwarzenegger threw away the solutions passed by the legislature. I am surprised that warning alone didn’t give the governor pause enough to thoughtfully consider bills that haven’t even reached his desk yet,” Bass said. “The governor’s haste is a waste of $18 billion in solutions that could have helped with our cash crisis and our budget deficit. The governor claims he wants to negotiate but then says things must be exactly as he wants. That is astonishing given the crisis we face. We are now waiting anxiously to see what the next step will be from a governor who has consistently been unable to produce even a single vote for a single budget solution.”
And state Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Democrats acted responsibly when nobody else has been willing to do so, and while “it would be easy to fire back at the Governor for his insults,” he remains “damn proud of what the Legislature did today.”
The California Employment Development Department this morning announced that the state’s unemployment rate rose to 8.4 percent in November, up from 8.2 percent in October and well above November’s national rate of 6.7 percent. Schwarzenegger quickly issued a statement saying this “reinforces the need for the state legislature to pass a real budget solution that includes aggressive economic stimulus — because we must do everything in our power to help Californians affected by the economic downturn get back to work. I’ve said countless times that any budget plan sent to my desk must include real stimulus that creates jobs, keeps Californians in their homes and provides strong, long-term recovery solutions for our state’s diverse economy.”
Yet it seems part of a solution was sent to him yesterday, and he turned his back on it. So who’s playing games?
UPDATE @ 12:02 P.M. FRIDAY: “It would be absolutely impossible to create jobs in 2009 from infrastructure projects with what they sent us,” Schwarzenegger spokesman Matt David insisted to me just now. “What they replaced CEQA with was more stringent and more burdensome than CEQA.”
“On public-private partnerships, the same thing – they added a line that would’ve led to countless, endless lawsuits over public-private partnerships and made it impossible to expedite any of these state projects,” he added. “They absolutely refused to eliminate any state holidays, even though state workers have 14 holidays – which is, I would guess, more than any private citizen in California gets. They left $300 million in CalWORKs cuts that the governor asked for on the table. They left about $800 million in cuts on the table when it comes to dealing with state workforce, and over $100 million in IHSS (In-Home Supportive Services) cuts.”
I asked him about the fact that Legislative Democrats already agreed to deep cuts to break this summer’s budget deadlock in September, and have agreed to more since, without any meaningful movement from Republicans. He maintained that “a fair package from the Democrats can’t be to increase the amount of revenues in taxes and fees, reduce the amount of cuts and water down the economic stimulus the governor is asking for and do nothing for mortgage relief. That’s unacceptable to the governor.”