U.S. Sen. Barbara Boxer, D-Calif., was crowing last week that the $26 billion aid package for cash-strapped states includes $1.2 billion for California that would “keep 16,500 teachers on the job.”

This morning, the campaign of Republican senatorial nominee Carly Fiorina sent out a news release saying California Democrats had other plans for the money: “Another day, another broken promise from Barbara Boxer.”

The Fiorina release pointed to a Sacramento Bee blog item in which state Senate President Pro Tem Darrell Steinberg, D-Sacramento, said this new federal money could help plug part of the state budget’s gaping deficit. It also says that the federal money won’t be available before districts must plan their budgets and school starts, and that the money won’t flow through to schools under the Legislature passes a budget, so jobs will be lost at least in the interim.

Both Steinberg’s and Boxer’s offices shot back later this morning.

“The education jobs law and the guidance from the Department of Education could not be more clear: This funding can only be used to save education jobs that serve our children in public schools – and nothing else,” Boxer said in her statement.

And Nathan Barankin, Steinberg’s communications director, said Fiorina “fails to grasp the basic fundamentals of budgeting.”

“News flash to Fiorina: keeping teachers on the job does help the state balance its budget,” he wrote. “Governor Schwarzenegger’s budget proposes to slash school funding by billions, which would result in thousands of teacher layoffs throughout the state. This is an outcome that Senator Boxer and Senator Steinberg want to avoid. The federal money will ensure our schools can afford to keep teachers on the job and our children receive a quality education.”

Then there’s the issue of timing: whether the federal money would arrive and the state budget would be enacted in time to save teachers’ jobs.

Districts already have budgeted for this coming school year; when there’s uncertainty about the budget, they peg their budgets to the Governor’s May budget revision. The state Education Code dictates timing of budget-related layoffs, with a June deadline, so districts already have issued their pink slips for this coming year.

California applied for the federal funding last Friday, Aug. 13, the first day it was possible to make the request, so the governor’s office clearly was wasting no time. Secretary Arne Duncan told governors that day that the U.S. Department of Education anticipates awarding the money within two weeks of receiving approvable applications – in our case, that would be by Aug. 27; he also urged states to give districts an estimate of how much they’ll receive as soon as possible so they can plan accordingly.

The state need not wait for a budget to be passed and signed into law before passing the federal dollars through to the districts; the state Department of Finance can send a letter to the Joint Legislative Budget Committee, the caucuses can sign off on it and the money can go out. The hope is that districts would get it in time to choose whether to bring pink-slipped teachers back right away and staff up for this school year, or to save the money as a bulwark against further layoffs next year.

As California Watch’s Louis Freedberg noted last week, that won’t be possible everywhere. Some districts have started school already, and most others will do so around the end of this month. And local school boards would have to ratify whatever decisions are made on how the funds will be spent.

As Freedberg concluded, all levels of government – federal, state and local – are going to have to work very quickly and efficiently with clear communications if teachers will be re-hired and paid in time to greet most students returning to school this year. That said, I’d bet there’s not a school district in the state that won’t gratefully accept the money, whenever it arrives.

So is it President Obama versus California Democrats, Schwarzenegger versus the truth, or both?

Gov. Arnold Schwarzenegger’s office this morning sent reporters a missive noting President Obama’s comment in an interview with ABC’s Diane Sawyer yesterday that “I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak.”

Although the President was talking about federal taxes, the governor’s office juxtaposed this with Legislative Democrats’ calls to help close the state’s chronic budget shortfalls and structural deficit with some revenue increases. Among those was this:

Senate President pro Tem Darrell Steinberg (D-Sacramento) Calls For Tax Increase On Independent Contractors.
“Senate President pro Tem Darrell Steinberg of Sacramento said the state could generate a one-time boost of $2 billion simply by requiring tax withholdings on payments to independent contractors.” (Judy Lin, “Schwarzenegger Doesn’t Blame Voters For Ill Will,” The Associated Press, 1/25/10)
Steinberg: “At every opportunity I decry the governor and minority party’s refusal to consider applying the same tax withholding rules to businesses that we apply to working people. The Franchise Tax Board tells us that applying a 3 percent withholding for independent contractors would raise $2 billion.” (Senator Darrell Steinberg, “Schwarzenegger’s Budget Doesn’t Reflect California’s Priorities,” San Jose Mercury News, 1/18/10)

Steinberg’s office shot back a short while ago, accusing the governor of perpetuating his pattern of not letting the facts get in the way of his rhetoric.

Governor Schwarzenegger’s office today released a document stating that Senate President pro Tempore Darrell Steinberg’s endorsement of a tax withholding requirement on independent contractors is a tax increase.

That assertion is patently false, and is yet another example of how the Governor refuses to let the facts get in the way of his rhetoric.

Here are the facts. Under existing law, employers are required to deduct and withhold from wages an amount equivalent to an employee’s reasonable tax obligation. Each quarter, employers are then required to remit to the Employment Development Department the total amount of income taxes they withheld. These provisions do not currently apply to payments made for goods and services performed by independent contractors.

In other words, the proposal endorsed by Steinberg does not increase anybody’s taxes; it only proposes that independent contractors pay the taxes they currently owe. Indeed, according to the Franchise Tax Board, such a policy would result in more than $1 billion in revenue for fiscal year 10/11, with ongoing revenues in the hundreds of millions in the following years.

So here’s a question for the Governor: Why do you believe that the law-abiding taxpayers of California should be forced year after year to pick up the slack for tax-dodgers?

Senate President pro Tem Darrell Steinberg, D-Sacramento, has set a Rules Committee hearing to consider Gov. Arnold Schwarzenegger’s appointment of state Sen. Abel Maldonado, R-Santa Maria, as Lieutenant Governor for 1:30 p.m. next Wednesday, Feb. 3 in room 113 of the State Capitol.

State Senate President pro Tem Darrell Steinberg is trying to land a one-two punch on Gov. Arnold Schwarzenegger’s three-day-a-month furloughs of state employees.

Steinberg, D-Sacramento, and Ken Jacobs, chairman of the University of California Berkeley Center for Labor Research and Education, will hold a news conference tomorrow at the State Capitol to release a study on “The High Cost of Furloughs,” which shows the governor’s three-day-a-month furlough program saves less than anticipated, offset by less revenue and higher costs in future years, while dragging down the Sacramento region’s already struggling economy.

Earlier today, Steinberg rolled out a different study from the nonpartisan state Senate Office of Oversight and Outcomes which found furlough savings aren’t being realized for at least a third of the roughly 100,000 state employees paid from the general fund with round-the-clock jobs; the furlough policy is just pushing labor costs to future years while adding more costs.

“This report is further confirmation that the administration’s furlough program was poorly thought out and will not deliver long-term savings for the general fund,” Steinberg said of this study. “In round-the-clock operations like prisons and state developmental centers, the furlough program is not reducing hours over the long-term, it is simply deferring paychecks.”

“Furloughs in Round-the-Clock Operations: Savings are Illusory,” analyzed payroll data from the State Controller’s Office and interviews with top prison, developmental services and mental health officials. Among the findings Steinberg is touting:

In round-the-clock institutions, employees in positions that must be filled day and night generally aren’t taking off three days per month; while absorbing the 14 percent reduction in pay, they’re working the “furlough” days and banking time to be taken off later on. In the prisons, which employ 70 percent of all state workers paid by the general fund, officials say the long-term cost of furloughs is greater than the savings; corrections officials say they were told by the administration that short-term payroll savings are more important than future liabilities. Correctional workers banked 1.5 million furlough hours between February and August this year; most are correctional officers, and at $34.91 an hour, that’s a future liability of at least $52 million.

When correctional officers do take time off, they generally use furlough days instead of vacation days, so from February through August, the number of unused vacation days accrued by correctional officers jumped 500 percent – a potential boondoggle for future prison staffing, and costlier because many workers will be at a higher pay rate when they finally do use their vacation time.

Furloughs fail to save the $108 million projected by the administration in the prison healthcare system, according to the court-appointed receivership now that system; the costs of paying overtime and hiring private workers to fill in for furloughed workers will exceed any savings. In fact, the court-appointed receiver says furloughs are projected to increase costs within the prison health care system by $37 million to $47 million this year.

Similar bankings of furlough and vacation time are happening in California’s dozen mental hospitals and developmental centers, creating the same kinds of future liabilities.

Assembly Speaker Karen Bass, D-Los Angeles, this afternoon announced that Assemblywoman Mary Hayashi, D-Castro Valley, and Assemblyman Jerry Hill, D-San Mateo, will be among the 10 members of her chamber (eight Democrats and two Republicans) serving on the Joint Select Committee on Reform.

Bass and state Senate President Pro Tem Darrell Steinberg, D-Sacramento, are forming the panel with the goals of making the Legislature more transparent and effective and making state government more efficient and customer friendly. Steinberg announced his appointments last week, including state Sen. Mark DeSaulnier, D-Concord, as co-chairman and state Sen. Loni Hancock, D-Berkeley, as a member.

Hill issued a statement saying he’s “eager to answer the call of our constituents for a more efficient and transparent government. I’m confident this group will lead the way to a more productive government with thorough analysis of potential reforms.”

Bass said her appointees “are ready to hit the ground running on reforms. I look forward to the Committee’s recommendations as they work throughout the coming weeks to produce a roadmap to help California work better.”

According to last week’s news release announcing the committee’s formation, the panel will be tasked with:

- Giving Californians more value for their tax dollars by making government more efficient and accountable.

- Prioritizing key issues, so government makes the tough decisions and only turns to the voters when absolutely necessary.

- Cutting through the gridlock caused by outmoded rules and undue partisanship.

- Making government more transparent and accessible from around the state.

- Diminishing the influence of special interests.

- Making government more customer-friendly.

- Creating a process that encourages decisions that reflect long-term thinking, not short-term band-aids.

The Public Policy Institute of California found in July that only 17 percent of California adults, 14 percent of registered voters and 10 percent of likely voters it had surveyed approved of the way the state Legislature is handling it’s job, and I’m willing to bet the last two months haven’t brought any significant improvement. Re-instilling faith in our state lawmakers won’t be easy or quick; here’s hoping these and other appointees are up to the task, and that the task itself isn’t inherently impossible.

It looks as if no matter how the battle over children’s health insurance goes in the next few weeks in the Legislature, state Senate President Pro Tem Darrell Steinberg, D-Sacramento, is preparing for a whole different scenario next year at the ballot box.

Days after Gov. Arnold Schwarzenegger proposed to abolish the Healthy Families Program (which would entail booting more than 900,000 California kids out of health insurance), Steinberg’s Committee for a New Economy on Monday made a $75,000 contribution to Californians for Children’s Health — a sizable cash infusion for a committee that previously had only about $20,000 in its coffers.

The statement of organization for Californians for Children’s Health says the group – for which a Web site is under construction – exists to support “expansion of children’s health coverage,” and its sponsoring organizations include the Children’s Defense Fund Action Council; the Children’s Partnership, a project of the Tides Center; Children Now; and PICO California. Its CFO is PICO California director Jim Keddy; its secretary is Kelly Hardy, Children Now’s associate director for health.

Hardy earlier today told me Californians for Children’s Health aims to develop a ballot measure for November 2010, and although today’s rapidly changing budget environment makes it hard to say exactly what that measure’s specifics will be, “we’re contemplating new revenue sources that would come in, not General Fund sources, that would support children’s coverage programs.”

She wouldn’t speculate on any further details, but we all know carving out new, specific revenue streams for services Californians deem crucial is a regular practice — think of Steinberg’s own Proposition 63 of 2004, which added a percentage point to the income taxe rate for Californians earning more than $1 million a year in order to bankroll California’s long underfunded mental health system. And of course, we all also know these revenue streams don’t necessarily always remain dedicated; Steinberg himself advocated last month’s Proposition 1E, which would’ve raided the Prop. 63 mental-health funds to augment the state’s bedraggled General Fund.

At any rate, as Children Now and its partners gear up for events this Thursday in San Francisco, Sacramento, Fresno and San Diego to protest the governor’s proposed cuts in children’s health, Hardy said they appreciate Steinberg’s foresight in contributing to their committee: “We’re really glad for his support, of course, and for his prioritizing of children’s coverage programs.”

What they’re saying about Gov. Arnold Schwarzenegger’s bad-and-worse May budget revision proposals…

State Senate President Pro Tem Darrell Steinberg, D-Sacramento:

“The message from the Governor’s May Revise is clear. California’s budget deficit continues to grow because of a National and International economic crisis that can be felt in every classroom, boardroom and unemployment office in the state. While Californians will have a chance to affect our budget deficit in next week’s election, it doesn’t change the fact that there are difficult choices ahead for this Legislature and the Governor. Regardless of what happens on May 19, on May 20 we will begin to respond to this fiscal challenge swiftly and responsibly, doing the best we can with the money we have.”

From Assembly Speaker Karen Bass, D-Los Angeles:

“The deep cuts included in both of Governor Schwarzenegger’s budget proposals reflect the impact the extended national recession continues to have on California. We have consistently said that all issues must be on the table, so we will closely examine each and every one of the Governor’s proposals announced today. We understand the people of California don’t care about politics-as-usual when it comes to solving the budget, and we will reject any stunts or gimmicks that get in the way of serious solutions. Californians are frustrated and families who depend on services from the state –whether schools or firefighting or health care for children – are worried. We will work to solve the budget deficit in a way that protects a safety net for the most vulnerable among us, acknowledges the fact we need an educated workforce to keep our economy going, and respects the strains all Californians are facing in this economy.”

From you:

“…”
“…”
“…”
“…”
“…”
“…”
“…”
“…”
“…”

What’s that? You have nothing to say about it? But the governor himself today challenged every Californian, “If you don’t like the cuts, sit down with a pen and pencil and figure out where the money is going to come from.”

Hey, it’s even easier than that: Go use Next 10’s nonpartisan “California Budget Challenge,” a free online educational tool that lets users try to balance California’s budget and see how their choices will affect the state five years into the future. Everyone should take a stab at it, in order to understand what’s really at stake here.

More feedback on the governor’s proposals, after the jump…
Read the rest of this entry »

Just yesterday, I saw San Francisco State University Assistant Professor Ramon Castellblanch angrily denouncing Proposition 1A, the spending-cap/rainy-day-fund measure on the May 19 special-election ballot, claiming it would be “devastating” to the future of public higher education in California.

Apparently state Senate President Pro Tem Darrell Steinberg, D-Sacramento, who helped broker the budget deal that put Proposition 1A before voters, doesn’t hold a grudge. Steinberg’s office today announced Castellblanch, a Democrat from Benicia, has been appointed to the California Board of Pharmacy.

The board adopts rules and regulation for the proper and effective enforcement and administration of the pharmacy profession including licensing and enforcement of state and federal laws. Castellblanch’s term will expire June 1, 2012.

Assembly Speaker Karen Bass, D-Los Angeles

Assembly Speaker Karen Bass, D-Los Angeles, invited me to sit down with her for about a half-hour this afternoon between her Bay Area events.

After Bass accepted an award from Girls Inc. for her work with youth, we met in the oddly named “Bridal Room” at the new downtown Oakland Catholic cathedral. (We’re pretty sure it’s a room intended for brides and their bridesmaids to prepare for a wedding.)

As expected, Bass focused heavily on her campaign to persuade Californians to pass the six ballot measures on the May 19 special election she helped negotiate. The measures were part of the Legislature’s protracted and difficult budget settlement early this year. (Click here to link to the independent Legislative Analysts Office’ conclusions about the measures.)

“If we don’t pass these measures, when we begin to negotiate next year’s budget, we will have a $14 billion hole instead of an $8 billion hole,” Bass said.

People have become confused, she said, over critics’ statements that measures 1D and 1E will take money from children and mental health programs funded through Props. 10 and 63. Bass said the new measures will tap into the prior propositions’ reserve funds and divert the money into very same programs that the propositions were intended to serve: core children and mental health programs.

“If these measure fail, we will have to cut children and mental health programs,” Bass said. “We are not using all the reserves but some of that money, which will otherwise just sit in the reserves.”

She also defended some of the proposed corporate tax credits that critics have said will cost the state tens of millions of dollars such as the Hollywood movie tax credit.

“I can’t defend all the tax credits we negotiated,” Bass said.

But the movie industry has been slowing moving out of California, she said, and the state needs to take action or lose it in the same way it lost the the aerospace industry.

While the measures contain plenty for everyone to criticize, she compared the state’s fiscal morass to a house on fire.

“When the house is on fire, the first thing you do is put out the flames before you start trying to rebuild the house,” she said.

Bass also emphasized a need for the Legislature to tackle some of the state’s other big problems such as water, healthcare, the tax code, energy and the prison system.

She and Senate President Pro Tem Darrell Steinberg issued a joint statement earlier today and vowed to work on comprehensive plan to solve the state’s water crisis, particularly the problems of the California Delta.

And Bass says she will pursue the creation of independent commissions to study and recommend reforms of the state’s parole system and its criminal laws. As an example, she wants to see reforms of laws that criminalize and label as sex offenders teen-agers who engage in so-called “sexting.”

On her personal legislative agenda, Bass has introduced a bill that would extend publicly funded services to foster youth through age 21. The current law cuts foster children off at age 18, a time when very few young people are ready support themselves.

She also plans to work on a ballot measure in 2010 that would create a special fund to fully pay for foster care services. The money would come from new taxes on candy and snack foods, which would generate an estimated $500 million a year.

Bass is running out time to finish her agenda. She terms out in 2010 and has no other publicly elected position on her radar.

“But I will be involved in public policy somehow,” she said. “I have been involved in public policy all of my life.”

Assembly Speaker Karen Bass, D-Los Angeles:

State Senate President Pro Tem Darrell Steinberg, D-Sacramento: