California Budget Crisis Diaries: Pay the bills by screwing education

This story was reported for the San Diego News Network on June 3, 2010.

See original copy of story.

It’s that time again, California. It’s time for us to bake in the sun while those who we elected into office figure out how to close yet another budget deficit by fiscal year’s end. That’s right, lawmakers have 28 days to figure out how to close a $19 billion deficit.

Here’s the latest scoop on the budget streets.

Making the budget process easier: Legislators have passed two bills with the intention of making the budget approval process easier.

According to The Associated Press, the bills supported by Democrats and nonprofit California Forward, was approved Wednesday by the state Senate.

“One measure that passed, SB1426, would require the governor to submit a two-year spending plan and a five-year fiscal forecast to the Legislature in every odd-numbered year, starting in 2011.

The other, SB1020, would mandate performance-based reviews of every state program at least once every 10 years.

Supporters called the actions a good first step toward improving the state’s budget process.”

The bills may come in handy as the state approaches the end of fiscal year 2011 and with a history of passing budgets pretty late…this could help.

Sufficient cash with a catch: Offering some good news to Californians is State Controller John Chiang. Chiang released a letter to lawmakers Wednesday informing them that the Golden State will be in the black until the end of the month.

He wrote, “Based on the May Revision revenue and spending estimates provided by the Department of Finance, and including the actual cash receipts and expenditures my office tracks, California appears to have sufficient resources to meet all of its payment obligations and maintain a prudent cash cushion to address unanticipated developments through the month of August.”

However, Chiang noted, that two factors come into play when considering how the state will be able to pay its debters this summer: the deferral of $4.7 billion from K-12 education, higher education, and local governments” and “continued reliance on borrowing as much as $20 billion from special funds.”

LAO proposals: While lawmakers from both sides figure out how to close the budget deficit, one state employee has offered his own solutions.

According to The Clarion Online, the state’s legislative analyst would start with education.

“Mac Taylor, the state’s legislative analyst, has recommended raising community college per-unit fees to $40, reducing funds for physical education courses, and suspending the state’s education funding mandate.

The Legislative Analyst’s Office also proposed reducing funds for physical education courses in community colleges.”

Taylor also contested the Governor’s proposal, which would eliminate CalWORKs.

“The LAO also suggests that despite the governor’s assumption that the state would continue to receive all expected federal funding for child care, which could total about $660 million in 2010-11, it is still unclear whether California would in fact receive the same amount of federal funding, given the absence of state funding.”

So what will happen in the next 28 days? Who knows? Let’s plan to vote on June 8 and hope for a better budget outcome.

Hoa Quach is the political editor for the San Diego News Network.

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Mayor’s Office releases public records 8 months after requested

This story was reported for the San Diego News Network on June 3, 2010.

See original copy of story.

Good news — or, just one of those “gosh, finally” moments: After waiting for more than eight months, the office of San Diego Mayor Jerry Sanders finally released public records to San Diego News Network. To be exact, it has been eight months and 17 days.

The request, filed on Sept. 15, 2009, asked for correspondence between a former employee (Anna Daneggar) in the city of San Diego’s business office and employees of consulting company Grant Thornton.

After a series of e-mails, phone calls and one letter from legal counselor Terry Francke of Californians Aware — a nonprofit organization devoted to upholding the First Amendment — Sanders’ office released the records Wednesday.

According to the city’s Administrative Regulation of Public Records, San Diego seeks to comply with the California Public Records Act. The Act requires that requests must be replied to by government officials within 10 days. There is, however, no consequence for government officials should they not abide by the state law.

The city’s regulation also notes that “Department Heads are responsible for determining whether a City record should be released….” In this case, spokesperson Darren Pudgil said the mayor’s office took the lead role because “the city’s communications staff serves as the media’s one-stop shop for information about the city, facilitating requests for facts, interviews, statements or public records.”

This has been the case for years, he said.

So why did it take the mayor’s office eight months and 17 days to fulfill this request? Pudgil didn’t respond to my questions but to be fair, the documents came in a big box that weighed about 25 pounds.

In the past, SDNN also filed a request for or e-mails, memos, and other correspondence related to the preparation of the FY 2010-11 Five Year Forecast between the CFO, COO and Deputy Chief for Legislative and Community Affairs. The request was filed on Sept. 25, 2009 and was fulfilled on Nov. 2, 2009 by the Mayor’s Office. In total, 12 pages of correspondence was released with the city’s five year outlook released on Oct. 1, 2009.

The records — which we’ll review — were requested after we became interested in the relationship between the city, which hired a former Grant Thornton employee who then later resigned, and the company itself who was hired to assist San Diego implement its managed competition program, which has yet to take full-force.

Check out past stories on our inquiry and we’ll let you know in the coming days what the documents we’ve been waiting months for entail.

Hoa Quach is the political editor for the San Diego News Network.

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California Budget Crisis Diaries: Schwarzenegger the Destroyer

This story was reported for the San Diego News Network on May 20, 2010.

See original copy of story.

It’s been a week since Gov. Arnold Schwarzenegger introduced his May Revise and Californians have wasted no time in offering their opinions on his proposal to close the $19 billion deficit and the man himself.

In this edition of CBCD, I’ll focus on the swarm of opinions. And, if you haven’t already, you must read the main article surrounding the Governor’s plan.

(Brace yourself, Mister Governor, the last few months of your term in office will be crummy. But hey, at least you can say you’re the best looking Governor there is. And sometimes, well most of the time, looks are all that matter.)

Giving Schwarzenegger an F: Writing for BeyondChron.com, Lisa Schiff focuses on how the Governor has affected California’s public education system. She starts her commentary by noting that the “only good thing” about the May Revise is that it’s Schwarzenegger’s last one.

“The ‘Governator’ has made one final effort to destroy as many social programs as possible including public education where he is cutting the K-12 budget anywhere from just under $900 million to $1.5 billion, depending on who’s counting. And even with higher education, although he technically kept his bizarre pledge to increase funding for this sector, he did so at the cost of increased student fees, which can only reduce the overall effect.”

But, this isn’t the first time Schwarzenegger has made such cuts to education, Schiff writes.

“Throughout the entire span of his time in Sacramento, Schwarzenegger has seemed intent on both raiding public education funding and weakening the security of that funding. This revised budget continues in that same vein, even using some of the same trickery. For instance, the very first paragraph of the introduction to the budget summary claims that the Governor is ‘fully funding the Proposition 98 guarantee.'”

Schiff doesn’t just lash out at the Governor though (p.s. I refuse to use the pronoun “Governator;” that is so 2009), she says most budget problems can be fixed if the California Legislature amends the two-thirds majority vote needed to pass a fiscal-related bill.

The state is worse off: Jerry Roberts of The Santa Barbara Independent thinks Schwarzenegger is leaving California is a worst situation than when he stepped into the Capitol in 2003.

Roberts, pretty much, writes that Schwarzenegger failed at his attempt to lead the country’s most populated state.

“Seven years after he roared into Sacramento, having ousted and humiliated incumbent Governor Gray Davis in an unprecedented recall election, the action-hero politician is limping through the final months of a lame-duck term, surrounded by the wreckage of failed promises and squandered political opportunities to repair the Capitol’s dysfunction.

Handed a once-in-a-lifetime chance to lead California into an era of sweeping reform, the governor instead followed a path of policy blunders and misguided judgments, frittering away his political capital in favor of seeking to sustain his personal popularity. By choosing a seemingly easy way out of the budget tangle at the beginning of his term, he was left at its end with nothing but impossibly hard choices?—?and a popularity rating matching that of the disgraced governor he replaced.”

Roberts goes on to write that Schwarzenegger screwed up when he made three decisions relating to: vehicle license fees, short-term borrowing and “political overreaching.”

Reducing opportunities: Two Californians partner-up in this opinion piece featured in The San Francisco Chronicle.

Judy Patrick and Sandee Smith of the Women’s Foundation of California write that the budget cuts hurt women and families.

“The governor’s revision to the state budget is unconscionable. By completely eliminating CalWORKS, California’s welfare-to-work program, along with all child-care assistance, it unfairly saddles working mothers and families with balancing the budget and thwarts opportunities for low-income women to move themselves and their families out of poverty.

CalWORKS has had a life-changing effect for people like Deborha Valarde. A single mother of two, she is a full-time student at Chabot College, where she is working on her degree in human services. CalWORKS assistance has helped her to get her education, provided critical supports so that she can hold down a job, and put her on the path to self-sufficiency. ‘CalWORKS has enabled me to start to get back on my feet again. If the CalWORKS program ends, a lot of single parents, including myself, will be left with nothing and nowhere to turn.'”

Simply put, the ladies write, “The governor’s budget is unacceptable.”

Unfortunately, I couldn’t find a positive piece on Schwarzenegger. So, if you happen to stumble upon it…help me be fair and post a link to it on the comments section of this article. Until next week!

Associated Press writer Judy Lin contributed to this report. Hoa Quach is the political editor for the San Diego News Network.

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California Budget Crisis Diaries: Schwarzenegger graduated!

This story was reported for the San Diego News Network on May 13, 2010.

See original copy of story.

California is near the end of its fiscal year, and though budget cuts have already affected nearly everyone, the sun may not be coming out anytime soon. At least, that’s what some experts say but we’ll find out on Friday when Gov. Arnold Schwarzenegger releases his May Revise.

Schwarzenegger’s Revise: The gov will release his revised budget Friday to kick the weekend off right (just joking) and according to his press folks, there will be “terrible cuts.”

According to a Reuters report, the governor “has said he won’t seek tax increases to bolster California’s finances.”

“The Republican’s forecast for the budget gap may rise after revenue fell short of his targets last month.

‘We can’t get through this deficit without very terrible cuts,’ Schwarzenegger spokesman Aaron McLear told reporters in Sacramento. ‘We don’t believe that raising taxes right now is the right thing to do.’

California’s revenue in April, when income-tax payments are due, trailed the governor’s estimates by $3.6 billion, or 26 percent. The gap wiped out gains from the previous four months, leaving collections $1.3 billion behind projections for the budget year that ends in June.”

Also in the Reuters report, “Schwarzenegger’s newest plan will revise the proposals introduced in January to account for the tax-collection shortages.”

Poor wives: California’s wives are seeing hard hits from the recession and may possibly feel more pain with budget cuts.

According to CalCoastNews.com, a study by a nonpartisan organization shows a “dramatic increase” in the number of wives becoming the dominant bread winner.

“The analysis, released Tuesday by the California Budget Project, a nonpartisan budget study group, shows that the number of women taking over household financial responsibility rose a stunning 77 percent from 2008 to 2009.

The new study also warns that past and likely budget cuts in the state’s new safety programs and health insurance for the poor, including CalWorks and Medi-Cal, will disproportionately affect low-income women and their families — people who make up the bulk of the clients who rely on such services.

Also, the study found that women in California lost fewer jobs than men, but they still lost work. Unemployment among women doubled to ten percent from 2006 to 2009.”

Not only are husbands relying more on their significant others, the study points out that women still earn less than men. Lame.

Yup, another protest: Of course, this wouldn’t be a complete CBCD if it didn’t include news about a student protest.

Students at UC Irvine continue to protest cuts to higher education even after a massive March 4 rally that attracted more than 1,000 participants.

According to The Associated Press, the protests are attracting a major group of minority students. The report focuses on different minority students including Jesse Cheng.

“Cheng is a third-year Asian-American studies major at the University of California, Irvine, a campus less than five decades old in the middle of Orange County, a place of strip malls and subdivisions that gave birth to the ultraconservative John Birch Society.

Comfortable talking with both administrators and anarchists, Cheng is a presence at protests but avoids getting arrested. He doesn’t want to put his graduation at risk or upset his mother, who worked hard to get him here and worries for his safety because she witnessed what happened to dissidents in her native China.

Cheng is part of a growing movement of minority students rallying around a new cause — fighting a budget crisis that’s undermining access to higher education at a time when students of color have become a stronger demographic force.

‘For a lot of students of color, this is our dream and our hope — to get to college,’ said Cheng, who is about to start a one-year term representing students from all 10 University of California campuses on the system’s Board of Regents. ‘We never thought we’d make it and we’re here. And we’re not going to give it up so easily.'”

On a final and ironic note, Schwarznegger received a “doctor of laws honorary degree” from Emory University in Georgia this week. SDNN’s Steven Bartholow will offer his thoughts on Schwarzenegger’s new degree in this Friday’s Political Sense.

Associated Press writer Judy Lin contributed to this report. Hoa Quach is the political editor for the San Diego News Network.

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California Budget Crisis Diaries: Is Lockyer BS-ing to save the state?

This story was reported for the San Diego News Network on May 6, 2010.

See original copy of story.

As education activists plan another protest, California treasurer Bill Lockyer is rallying for the state’s faltering credit rating.

Lockyer’s inquiry: California treasurer Bill Lockyer is wondering if a few banks are teaming up against the state.

According to Reuters, a letter by Lockyer was sent to several banks including JP Morgan and Bank of America asking if the banks were using credit default swaps to lower the state’s rating.

“California’s treasurer wrote to six of the state’s top underwriters on Wednesday requesting information on whether they or their clients are using credit default swaps to ‘bet against the state’s credit.’

The letters from State Treasurer Bill Lockyer to Bank of America Merrill Lynch, Barclays, Citigroup, Goldman Sachs, JP Morgan and Morgan Stanley follow letters he sent them in March expressing concern that spreads on California CDS are mispricing the state’s credit risk and inflating interest costs.

CDS are used to hedge against default risk or to speculate on credit quality.

In his latest letter, Lockyer requested information on the extent to which the underwriters ‘are using CDS to bet against the state’s credit’ and the extent to which they ‘are helping their clients use CDS to bet against the state’s credit,’ a statement from his office said.”

The Reuters report goes on to state that Lockyer has long rallied for California in his attempts.

“Lockyer has long maintained that California debt is a safe investment despite the low credit rating on its general obligation bonds.

California’s general obligation bond rating hovers just a few notches above ‘junk’ status, which Lockyer says unfairly adds to the state’s borrowing costs because the state has never missed debt service payments.”

Good job, Lockyer. Work for California’s credit rating!

Yup, another protest: Students and education activists are not giving up. Though, Gov. Arnold Schwarzenegger has promised not to cut any more funding from the state’s education system, the protests continue.

Locally, a grassroots group called Rally for Schools will host a protest at Balboa Park Saturday. The group is asking for protesters to join them so that they can “send the strongest message to Sacramento…we will not accept the abandonment of our public schools.”

The protest will take place 10 a.m.

Buh-bye, redevelopment funds: Schwarzenegger on Tuesday won the right to raid local redevelopment funds to help close California’s budget deficit, but the court ruling provides only a ray of good news in an otherwise bleak fiscal outlook.

Sacramento County Superior Court Judge Lloyd Connelly ruled that the state can take more than $2 billion from local redevelopment funds and transfer the money to school operations. Local governments objected to diverting the money, which generally is used to promote public works projects and rehabilitate downtown areas.

“We dodged a bullet,” said Schwarzenegger’s spokesman, Aaron McLear. “This would have added $2 billion to our deficit.”

During budget negotiations last year, Schwarzenegger and lawmakers agreed to use the money from redevelopment funds for schools in those districts as a way to make up for declining general fund revenue.

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