Republicans, not Democrats, ended budget negotiations

Senator Bob Huff (R – Diamond Bar) engaged in a cringe-inducing psychological projection when he accused Democrats of having signed a labor pledge to “spend ‘til it hurts.” The irony couldn’t be more astounding, as nearly every Republican California legislator has signed a written promise to Washington, DC lobbyist Grover Norquist to not support taxes regardless of how great the need.

To believe it was Democrats, not Republicans, who ended the budget negotiations yesterday, you would have to overlook quite a bit:

• You would have to ignore the anti-tax ad campaigns that began running in two Republican Senators’ districts who seemed they might support placing revenue extensions on the ballot for voters to decide.

• You would have to ignore the threat at the recent California Republican Party convention not to fund or support any Republican candidate who supported the people’s right to vote.

• You would have to ignore the Republican Party’s threat to label as “traitors” (yes, traitors!) any Republican who supported putting a tax extension on the ballot.

• You would have to ignore Grover Norquist’s assertion that supporting the people’s right to vote on a tax is the same as supporting the tax.

• You would have to ignore the 6-page, 53-item special interest wish list that the Republicans submitted as the price of 4 of their votes.

In other words, you'd have to deny quite a bit of reality.

Let's put this in the context of national events and what is happening here to the California Republican Party. The party is a mere shadow of its former self in a state that has historically elected Republicans. Its radical agenda simply does not have the support of Californians. Registration in the California Republican Party is at an historic low. Less than a third of registered California voters are Republicans. Both houses in the Legislature are only 2 seats short of a Democratic supermajority. No Republican holds statewide office. The voters recently and resoundingly rejected Republicans Meg Whitman for Governor and Carly Fiorina for US Senate, despite their record spending.

While California continues to reject Republican candidates, the party continues to push their candidates further to the right. With the influence of radical tea partiers on the rise and the upcoming “top two” primary system projected to increase party-loyalist dependence, it is becoming increasingly impossible for moderate Republicans to be elected.

The failure of Republicans to participate in the difficult decisions necessary to guide California through the greatest economic challenge since the Great Depression is quite simply a failure of leadership on their part. As a member of a staunchly Republican family, it pains me to see the demise of this once-great party. As a Democrat worried about the future of our great state, it pains me that my Republican colleagues refuse to be partners in solving our problems. As a legislator, I believe the choices we now face, as Democrats make these decisions on our own, are grim. The budget cuts we must make in order to close the remaining $15 billion budget gap will cause enormous suffering throughout the state. They will raise the unemployment rate and add to our economic pain. They will impair our ability to borrow, costing us all more in the long run. Schools will close, roads will deteriorate, and public safety will diminish as local communities lay off teachers, road crews, police officers, and firefighters.

In times of great societal peril, it is necessary for us to put partisanship aside and make difficult decisions for our greater good. Now is the time for us to behave as Californians, not as Democrats or Republicans. It is truly saddening to see my colleagues put their party ahead of our state.

Note: To see where tax revenues and expenditures are coming from and where they're being spent, see these maps below:

Unshared sacrifice

So far, I have supported Governor Brown's budget proposal. I believe he is indeed taking a mature and realistic approach in trying to balance our budget under these most difficult circumstances.

We like to talk about "shared sacrifice" in addressing this crisis, but let's not delude ourselves – the sacrifice is not actually being shared. In fact, the sacrifice is almost exclusively being asked of our children and grandchildren. Add in the elderly and the disabled for good measure and you've identified almost everyone who is sharing in the sacrifice. Now, retirees and public servants are about to be thrown onto the pile.

The Conference Committee has adopted most of the Governor’s budget proposals. Here are some of the $12.5 billion in cuts adopted thus far; you’ll notice many directly or indirectly affect children:

• Childcare: $716 million reduction - Includes reducing the number of preschool slots by 15%
• Higher Education: $500 million cut from California State University, $500 million cut from University of California, and $400 million cut from Community Colleges
• Health and Human Services: $6 billion cut, including:
  - Department of Developmental Services: $500 million cut from services to developmentally-disabled children and adults
  - CalWORKS: $1.1 billion from this program providing aid to poor, single parents
  - Medi-Cal: $1.6 billion cut in healthcare services for extremely poor families
• State Civil Servants: $700 million cut

Additionally, our state parks have historically been underfunded and under-maintained for years and this year will be the worst to come. These parks preserve California’s rich history and natural resources. They also used to serve as a remote classroom for our state’s children – an important function often overlooked. Now, however, many are closed part time, and many will completely shut down due to budget cuts.

Even the most promising option for our children to make a better life for themselves – obtaining a college education – has become more and more difficult. Fees and tuition at all three of California’s higher education systems (California State University, University of California, and Community Colleges) have risen dramatically in recent years.

One-fifth of California’s children are living in poverty. Across the nation, income inequality is at record levels – wealth has become concentrated so that 1% of our population owns more than 20% of the total wealth. Yet, we have reduced corporate taxes repeatedly over the past two decades. We cannot even summon the political will to tax the extraction of a state resource – oil – even though the oil companies continue to earn record profits routinely.

So, let's proceed to do what we have to do under the circumstances. But let’s not pretend that we are all sharing the pain. Our budget cutting has consistently and disproportionately hurt our youth.

Preservation or degradation of state services? Let the people speak.

This is an Op-Ed I wrote that appeared in the Santa Rosa Press Democrat.

Preservation or degradation of state services? Let the people speak.
California State Senator Noreen Evans
Second Senatorial District

The design of California’s commemorative state quarter and the ongoing budget debate in Sacramento might seem unrelated. However, when twenty Californians sat down to deliberate upon what image would best depict the spirit of the Golden State, they settled upon the now-familiar relief of California’s founding naturalist John Muir gazing towards Yosemite’s Half Dome with a soaring condor overhead.

Our state parks protect our natural splendors and allow not only Californians, but countless individuals from around the world to marvel at their magnificence. Parks also preserve our state’s history in a way no textbook can and serve as an invaluable teaching tool for our youth. With years of deferred maintenance, reduced days of operation, increased usage fees, and staff reductions -- make no mistake about it -- we have already surpassed “belt-tightening” within the parks. The reality is, this year’s budget goes beyond mere belt-tightening and will result in park closures for the first time ever in our state’s history.

As painful as this is to our legacy of preservation, it is an example of the level of sacrifice necessary to deliver a serious budget that is on-time, balanced, and takes real steps toward putting California’s fiscal house in order. This cut will be particularly painful to the people of our Second Senatorial District, as it contains approximately one-fifth of all our state parks.

The budget being crafted by Governor Brown and Legislative Democrats contains a mix of expenditure reductions and the continuation of current tax rates set to expire this year. As promised by Brown throughout his gubernatorial campaign, these tax mechanisms will not be enacted without voter approval. Governor Brown wants the voters to decide – do we cut our state services to the bone (and then some) and continue our current tax rates, or do we revert to lower tax rates that will require cutting state services at a truly unprecedented and unpredictable level?

Other Democratic legislators and I agree with Governor Brown - let the people vote. However, before the people can vote, the provisions must be placed on the ballot, which requires a two-thirds vote of the Legislature. Since a majority of Republican legislators have pledged to not allow the voters to be heard on these provisions, it is unclear if voters will have the chance to decide their budgeting future. To my Republican colleagues I say – let the people vote!

For much of our modern history, California’s quality of life has been the envy of the world. Perhaps it’s the weather, our unmatched public university systems, the robust and creative industries of Hollywood and Silicon Valley, or maybe even the preservation and accessibility of our state’s natural beauty. Whatever “it” is, Californians call a very special place “home” and deserve to vote on the future of our home before the only image our children can enjoy of their state’s proud tradition is on the back of a quarter.

State Senator Noreen Evans represents the Second Senatorial District, including all or portions of the Counties of Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma. She is Chair of the Senate Committee on Judiciary and the Legislative Women’s Caucus.

Budget Committee Update -- February 18, 2011

Please find an update at the link below to the actions adopted by the Senate Budget and Fiscal Review Committee during February.

http://sinet2.sen.ca.gov/ftp/SEN/COMMITTEE/STANDING/BFR/_home/2182011QuickSummary.pdf

Privatization of In Home Supportive Services: Not a realistic way to save state resources or care for the needy

Privatization of In Home Supportive Services: Not a realistic way to save state resources or care for the needy

Surprisingly, some Republicans in the Legislature have come out against cutting In Home Supportive Services (IHSS) as Governor Brown has proposed. The surprise was short-lived when we learned they wished to privatize the program’s administration. The theory goes that private agencies assigning IHSS contract workers will find opportunities to consolidate services and discover new efficiencies. While there is no reason why such consolidation and efficiencies couldn’t be found with the existing public administration, still I commend my colleagues for their desire to protect these most vulnerable individuals. But, as a test case in Tulare County demonstrated, privatizing these services is not the best way forward.

Our current system of IHSS administration is known as “individual provider mode.” Under this system, an individual who qualifies for IHSS assistance is assessed by a social worker, assigned a certain number of hours of assistance per week, and then hires a provider. The recipient sets the work schedule and supervises the provider; the provider is paid by the state. Given the intimate nature of many of these services provided to these vulnerable recipients, the provider is often a family member who foregoes most other paid employment to help the recipient.

A privately-administered system of IHSS is known as “contract mode”. Under this system, an individual who qualifies for IHSS is assessed by a social worker, assigned a certain number of hours of assistance per week, and then the case is referred to a private contractor that coordinates the administration of the recipient’s care needs.

Using “contract mode” to administer these services has been shown to be ineffective. Not only does it present a number of problems for the care recipients, but under the findings of a large study performed in California, this mode of administration is less efficient and less effective than individual provider mode.

First, usually under “contract mode”, the private administrator chooses who tends to the recipient’s most intimate and personal care needs. Theoretically, that power to choose gives the administrator the supposed ability to consolidate and find efficiencies. But given the intimate nature of the services provided, the recipient’s choice of caregiver should be respected.

Further, “contract mode” has already been tested and shown to be ineffective and inefficient. In 1992, the California Department of Social Services began a test project to see if IHSS could be effectively delivered via contract mode and potentially save the state resources. The results of the project found that the private contractor cut hours of service for recipients and pushed family and relatives to administer care the contractor refused to provide, in some cases leaving the needy individual to just go without. Additionally, administrative costs increased dramatically in Tulare County under the private contract system. The report concludes: “With hourly program costs 60% higher than the statewide average, managed care in Tulare was less efficient, less effective in serving the neediest population, and far more expensive than the state and its comparison counties.” The project ultimately showed contract mode to be more costly to the state and less effective at delivering better quality of care. Factor in the profit expected by the private administrator and it is difficult to see how IHSS could possibly be administered for less cost and in a more humane manner.

I am grateful my Republican colleagues are presenting proposals as to how we can save resources and preserve services. Privatizing IHSS administration, unfortunately, will do neither.

Public employee pension “reform” or dismantlement?

Public employee pension “reform” or dismantlement?

While the Governor and Legislative Democrats grapple with the state’s fiscal crisis by proposing severe budget cuts matched with tax extensions, our Republican colleagues remain on the sidelines. Recently, however, they made their first demand – destruction of pension plans of public employees.

You remember retirement plans? Just about everyone working for a large company used to have one. Then some smart MBAs figured that corporations could save a bundle of money by dropping pension plans and substituting 401(k) – style benefit plans. The corporation would pay out less, retirees would reap “benefits” from a perpetually growing stock market, and investing firms would earn lavish fees. Of course, the market goes up and it goes down, and if an employee about to retire is caught on the wrong end of the graph, well life is tough.

So now our colleagues say that in order to consider letting voters decide whether to extend taxes to help fill the budget gap, Democrats must first agree to mandate that all new state employees forgo state pensions and instead contribute to 401(k) –style benefit plans.

Requiring state employees to enter into 401(k)-style benefit plans is not “pension reform”; It is the complete dismantlement of our state’s public employee retirement system and presents a host of potential dilemmas.

Retirement plans can be broken into two basic categories – defined benefits (DB) plans and defined contribution (DC) plans. Defined benefit plans pay out specific benefits to retirees that cannot be changed or limited during that individual’s lifetime. Defined contribution plans define the specific contributions the employers and/or employees make to an individual’s retirement account, but do not specify the amount of the benefit paid out upon retirement. Then there are 401(k) plans which depend entirely upon the market and an individual’s skill or luck.

Historically, public sector employees are paid lower wages than comparable private sector employees. Secure long-term retirement benefits are often the hook that keeps valuable employees in public sector employment rather than leaving to find higher wages in the private sector. Substituting a DB system with a DC system or 401(k) plan would discourage civil service employment and increase turnover rates, resulting in an inconsistent workforce and loss of institutional memory.

Studies have shown that DBs are less expensive to administer and do much better than DC systems. Average administrative costs for a DC system are 2% of assets, while a DB system costs only .18% of assets. And DB systems employ top quality investment managers, consistently outperforming DC systems in down market times.

Today many state employees contribute to both systems, often to defer taxes, and that’s well and good. And there are ways to reform pension plans that are common sense and fair. The Governor, for one, is talking about such reforms. But requiring state employees to enter into a 401(k)-style defined contribution retirement plan would put public employees at the mercy of Wall Street, and would represent a major step back to retirement insecurity, not “reform.”

Failure is not an option.

Failure is not an option.

This year’s budget process is on hyper-drive, the spirit of reform is in the air, and lots of options are on the table, many of which could be up to the voters. Will my Republican colleagues’ staunch “no new taxes” pledge deny the voters a chance to vote on a compromise budget package? If so, then my friends on the other side of the aisle face a challenge.

The Senate Committee on Budget and Fiscal Review held its first hearing on Governor Brown’s proposed budget on Thursday, January 13. In view of Brown’s desire to have the Legislature adopt the budget by March 1, we have a very ambitious schedule before us to examine the proposal and to hear the public’s concerns about it.

Consistently, polls show that the public favors a balance of cuts and new revenues to balance budget deficits. Brown’s proposal, congruent with the electorate’s thoughts on the matter, will ask voters to approve extending existing taxes that are set to expire this year. In order to do that, Brown will need a 2/3 vote of the Legislature to place the proposals on a June special election ballot.

Many of our Republican colleagues, most of whom have signed the Grover Norquist pledge against any and all tax increases ever, have come out opposed to Brown’s initiative. So a legitimate question arises, what if our Republican friends have their way and the Legislature is unable to place the question before the voters? What is their Plan B?

We could close every state park and shut down the entire CSU and UC systems and still not solve this problem. A Plan B would necessarily include closing down schools, universities, prisons, parks, highways, firefighting, public safety, and other state services. It seems only reasonable that those who oppose Brown’s initiative should let the rest of us know what path they would prefer instead. Brown’s plan raises an additional $12B in revenues; what would they cut to replace $12B in additional revenues?

Those who oppose Brown’s proposal should tell us what they would cut to replace those revenues. And if they fervently believe their constituents would want this, their proposed cuts should start at home. My colleagues opposing these revenue options should make a list of state services in their district that they are willing to shut down to help close this deficit. This would, of course, have to be on top of the tens of billions of cuts that Brown has already proposed.

A $12 billion hole divided by 40 Senate districts equals a $400 million dollar hole for each Senator. So for those Senators that oppose putting these revenue options to the voters, the challenge is to remove $400 million worth of state services from their districts. Failure is not an option.