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WatchSonoma Watch

GUEST OPINION: A newcomer’s view of budget logjam

Michael Allen

By MICHAEL ALLEN
Michael Allen represents the state’s 7th Assembly District, which includes Napa County and part of Sonoma County.

As a freshman legislator, this is my first direct experience at grappling with a budget crisis of extraordinary magnitude, and it comes at a time when California also continues to struggle toward recovering from the nation’s worst economic downturn in decades.

That said, I think it’s important for us to take stock in where we are at the moment, and to try to separate fact from opinion as we continue to work toward resolving California’s budget dilemma — a dilemma which must be resolved before our state can truly move forward again.

In January, Gov. Jerry Brown laid out a responsible, balanced proposal for solving our budget deficit and putting our fiscal house in order. Major civic and business organizations and associations across the state decided to support the governor’s plan, which featured a mixture of painful reductions in spending along with extensions of some tax increases which either expired last December or will expire in June 2011. Those organizations agreed that the governor’s plan made sense in terms of stabilizing government finances, which would in turn help strengthen the state and local economies.

As a member of the Assembly budget committee, I’ve had the opportunity to review the governor’s budget proposals first-hand. And while we considered many of those proposals difficult to accept, Assembly Democrats have chosen to make the tough decisions to cut spending for a wide range of programs and services affecting perhaps the majority of Californians.

I’ve spent most of my adult life advocating on behalf of working men and women and their families, but I recently found myself agreeing to reduce funding for things on which they depend. Those were not easy votes for me to cast, but the stark reality is that we have less money available to pay for the kinds of things that government offers at all levels — even though the economic downturn has meant that demand for some programs and services is greater than ever.

Democrats in both the Senate and Assembly have voted to approve more than $14 billion in deficit-cutting solutions; Republicans in both houses criticized the cuts for not going far enough, and then failed to approve the cuts that the governor had proposed.

To date, my Republican colleagues have thus far refused to support letting voters decide whether we should extend the tax increases. Despite their shrinking numbers in the Capitol, the governor was willing to try to negotiate with Republicans in order to secure their votes to put the tax extension proposals on the ballot. This was done partly because he said he would put such questions before the voters when he was campaigning for office last year, but partly because his goal (and ours) has been to approve the budget solutions in their entirety with solid bipartisan support.

We began this process with a $26.6 billion budget shortfall, and in 66 days we approved $14 billion in solutions, including $10.7 billion in spending cuts. We have roughly $13 billion left to address with about two-and-a-half months left to do it in.

The governor and Democrats in the Legislature, remain committed to adopting a responsible state budget and to doing the job that voters expect us to do. At this point, we are considering all available options for accomplishing the task, but our over-arching goal continues to be including our Republican colleagues as partners in this extremely important process that affects every Californian.

The question is, are they willing to be responsible partners in California’s future?





31 Responses to “GUEST OPINION: A newcomer’s view of budget logjam”

  1. John says:

    Still no list of propositions? How about a list of those contributing to this push against the working people? Especially those contributions from out of state. What? They don’t have to disclose that? But unions do…why is that?

    http://californiawatch.org/dailyreport/secret-out-state-donor-powering-pension-reform-group-9534

    Go ahead and keep responding to the question that was NOT asked.

  2. Not A Chance says:

    @GAJ

    did you ever consider Calpers may be the largest pension contribute because it serves the most populated state (8th largest economy on the planet)?

    there I go with that logic, again!

  3. Beef King says:

    Mr. Allen has contempt for the voters who pay his salary.
    How do we keep getting people in office who shouldn’t be there?
    No amount of snake oil can make him look better than he is.
    Maybe he will demonstrate that his concern is for all residents of his district.
    Maybe not.
    Mr. Allen, we’re watching your actions more than listening to your words. I hope you do well.

  4. Reality Check says:

    //Your “Evidence” was a slanted article which I responded to prevent the unbalanced information flow . . . //

    From the Institute of Government Studies at UC Berkeley? Oh my. What facts did you differ with? That union dues were used for political purposes? No, you didn’t.

    Not much else to say here.

  5. John says:

    Which propositions? Not supported but actually written.

    Your “Evidence” was a slanted article which I responded to prevent the unbalanced information flow you promote.

    My point (which you purposely missed) was simple: Republicans oppose financial support of Democrats. Democrats oppose financial support of Republicans. One is typically by unions while the other is typically by corporate lobbyists at the capital. Both sides accept moneies. One is not worse that the other. You can NOT have rules governing ONLY one side.

  6. Reality Check says:

    @John, you couldn’t possibly mix things up more if you tried. The “real issue” was noting more than:

    GAJ asserted unions use dues money for political purposes. Mockingbird said, no, no, there was a law against it. I asked, what law?

    When no answer came, I answered the question by citing evidence that, yes, unions use dues money for political purposes.

    Your point: “This shows the clear alliance with business and the Republican party” is no more true than “the clear alliance with unions and the Democratic Party.”

    “Have unions put forth propositions to Silence Business interests in politics?”

    Goodness gracious, yes. Beside, you’re missing the fundamental difference. California law allows for union membership to be a requirement of employment. No such compulsory relationship exists for business to extract money from its employees for political purposes.

  7. GAJ says:

    Alex, don’t you get it?

    The owners of corporations are called shareholders.

    Among the biggest “owners” of these corporations?

    Union Pension Funds!!

    Smite thyself!!

    “The largest 300 pension funds collectively hold about $6 trillion in assets. In January 2008, The Economist reported that Morgan Stanley estimates that pension funds worldwide hold over US$20 trillion in assets, the largest for any category of investor ahead of mutual funds, insurance companies, currency reserves, sovereign wealth funds, hedge funds, or private equity.”

    The largest Pension Fund in the US?

    Calpers!

    http://en.wikipedia.org/wiki/Pension_fund

  8. John says:

    @ reality check – “There is strong opposition to the practice in the business community and the Republican Party, but so far attempts to restrict the practice have not succeeded.”

    This shows the clear alliance with business and the Republican party. The real question is this:

    Is there strong opposition, from the Republicans, towards the practice of the Businesses giving the Republicans money? I didn’t think so! They only want to limit their opposition. That’s politics, try to weaken your opponent. (I’m not saying democrats are any better)

    Now the crux – Have unions put forth propositions to Silence Business interests in politics? Sure we support candidates who will be more likely to listen to our concerns but the fight has always been to balance corporate greed at the expense of the employee. And we do understand the need for business to be successful as shown in the local support for pro-business candidates.

  9. Alex says:

    Unions represent the working people. Corportations represent their shareholders. So you want to put restrictions on union donations to politicians but not corporations? Yeah, let me know how that will work out for you in a few years…how is it working out for those south of the border where corporations dictate?…how is their environment? their water? their medical care? their infrastructure? their living standards? These corporations pay near nothing for taxes and enviromental rules..do you see them saying, “oh let me be responsible with the rain forest…let me care about my workers?” Don’t be an idiot..we were there before and that is why there was bloodshed for the working class to be in unions…stop listening to your Faux News and get the facts. A corporation could give a damn less if you or your family were taking care of…ask those who worked in the factories in the30s, 40s and 50s…you were a dime a dozen. If you were sick or your family had any illness, you were fired…if you didn’t do their special favors, you were fired. You asked for a raise, you were fired. Got the picture?

  10. Grey Whitmore says:

    What a bunch of regurgitated baloney. Oh, wait … that has already been regurgitated …

  11. TheObserver says:

    @GAJ

    You bring up a good point about unions’ investments in corporations. The definitely should lead shareholder revolts.

    Until the 1980s, investing in the stock market was only for the wealthy. But when 401(k)s and other benefit plans with attractive tax benefits were introduced, the entire nation began to participate, making Wall Street richer and even more powerful than it already was.

    Before the 402(k) there were only defined benefit (pension) plans, in which employer corporations invested on behalf of the employee (and received tax benefits). These were great for the employee who did not have to contribute to them from their own earnings. But they were also good for the companies because of the tax benefits. Defined benefit plans have disappeared because, well, the bills came due when boomers started retiring and employers either mismanaged the money or the liabilities outstripped the tax benefits.

    It used to be that stock was a long term investment and executives of corporations believed in honing operations and creating jobs as the best way to serve the interests of shareholders. Further, corporate leaders believed that private companies existed with permission from the people…just like, for example, schools.

    Nowadays, people exist with permission from corporations.

  12. Reality Check says:

    Yes, Mockingbird, I read your message. Did you read mine? What law? to repeat myself.

    You may voluntarily contribute to your union’s political fund. What has that to do with whether public employee unions also spend dues money for political purposes?

    The fact is, they can and do.

    “Trade unions are a major presence in California politics. Unions spend income from membership dues to support political candidates and ballot measures. There is strong opposition to the practice in the business community and the Republican Party, but so far attempts to restrict the practice have not succeeded.”

    http://igs.berkeley.edu/library/research/quickhelp/elections/2005special/htUnionDues.html

    “The legal presumption in California is that the political spending of union dues is permitted unless union members explicitly opt out.” Same source.

    Prop 75 attempted to limit political spending of dues money to cases in which members have specifically approved, but it was defeated.

  13. GAJ says:

    So those Radio and TV ads against Arnold’s proposals paid for by the Unions were my imagination?

    As to those lambasting corporations for all of our problems, you do know where almost all Unions invest their Pension money, don’t you?

    Yup, those same evil corporations they denigrate for maximizing profits and returns to shareholders are generating solid returns to the massive Union Pension holdings.

    The Unions could be a powerful force for change within corporations like GE as they are major shareholders.

    Wonder why they didn’t pressure GE, for example, to pay more taxes than they needed to under the law?

    If Unions hate corporations they shouldn’t invest in them.

  14. MOCKINGBIRD says:

    Reality Check, did you not read my post? We do contribute, but it’s voluntary. They are not dues. Two separate funds.

    And for Steve, because of the 2/3 vote on the budget the minority HAS been in control of California. Further, the Republicans are not willing to compromise, they want it all and it’s to the loss of the middleclass and to the benefit of the rich. The Democrats did their job and compromised and the Republicans didn’t even have the guts to vote for the cuts they were asking for. They are the party of no. Then they didn’t even allow the people of CA to vote. I don’t know about you, but if I were a Republican I’d be very upset that my representative took away my right to vote, whether yay or nay.

  15. Reality Check says:

    //For GAJ who is wrong again. By law union dues cannot be used for political purposes.//

    What law? Prop 75 in 2005 attempted to curtail the use of public employee union dues for political purposes, but it was defeated. And even it would permitted using dues for political purposes if the member approved.

  16. MOCKINGBIRD says:

    For GAJ who is wrong again. By law union dues cannot be used for political purposes. Those of us Union members who care to can donate to a political fund. I contribute to SEIU’s COPE fund and participate in the endorsing of candidates process. I get a say where my donation goes. Anyone who is Union can VOLUNTARILY DONATE to your union’s political fund and work within to make change in our legislatures. Michael Allen was a recipient of our endorsement, our money and our personal work for his campaign because we know him well and we know he will represent all the WORKING FAMILIES, whether union or not, of California.

  17. Steve Humphrey says:

    @ Eric Newman

    Uh, not sure how old you are or how long you have been in the State of California, but the Republican party has not been in control of this state for decades. If your assertion is that those that have been in charge and created this unsustainable path should be removed I couldn’t agree more.

  18. Not A Chance says:

    Kay–do actually think you should be listened to when it comes to Michael Allen? You hate the man, you tried to destroy his career and failed. So anything you say on the matter is “Baloney” and truly biased. My only hope is that you leave the city of Santa Rosa so it can truly prosper and PROGRESS the way it rightfully should.

    Your “pro small business” people on the council are facing FPPC monetary violations and you are notably silent on the issue…

    Congratulations, Kay, you destroyed your credibility for a $3,000 dollar fine from the FPPC. Come out against Herb Williams actions too and maybe you can have some of it back.

  19. Phil Maher says:

    @Eric-

    If you put the squeeze on the investor class and business in what’s already the most business unfriendly state in the Union, why would we stay, and who would then bear the burden of the the working class…except the working class themselves. And then let’s not forget what the working class needs to work…the businesses you just drove out.

    All things being equal, and neither party being on my personal favorites list- at least the Ca Republicans didn’t run off to Illinois.

    Here’s a quote from an IBD article highlighting the comments of Cypress- Semi CEO T.J. Rogers:

    “The killer factor in California for a manufacturer to create, say, 1,000 blue-collar jobs is a hostile government that doesn’t want you there and demonstrates it in thousands of ways.”

    So far this year, thanks to California’s unfriendly political environment, strict regulations and high taxes, 32 companies have announced they’ll either expand elsewhere, move or shut down operations, according to the California Manufacturers & Technology Association.

    Full text: http://www.realclearmarkets.com/articles/2010/11/05/the_golden_state_still_doesnt_get_it_98744.html

    Now tell us again about how to save the State.

  20. Eric Newman says:

    “End Unfair 2/3rds minority Rule”

    The budget problems of the state of California could easily be solved if the undemocratic 2/3rds budget requirement did not permit a small handful of socio-pathic Republican legislators to put a piano wire around the neck of the state and squeeze until the blood runs out of our eyes. They have forfeited the right to govern.

    This is the critical turning point. The Democrats need to get out of their defensive crouch, stop attempting to appease the unappeasable, and do a wall-to-wall public campaign to make the case for ending the stranglehold of the corporate special interests and the investor class, and create a fair tax system that doesn not put the burden of the tax base on the working class and middle class. Then we can have a decent state, with shared prosperity and strategic public investments that benefit the whole of California.

  21. Common Sense says:

    Either Mr. Allen is as bad at math as I am, or this opinion piece could really use some additional detail to be clearly understood. Mr. Allen indicates a $26.6 billion dollar state budget shortfall, which I’ll call a deficit. He then indicated $14 billion dollars in solutions. I’m unfamiliar with that term as applied to budgets/money, what were the solutions, Mr. Allen? How did they reduce the deficit by $14 billion dollars? He then indictes $10.7 billion dollars in spending cuts. So, assuming that the $14 billion and $10.7 billion are all deficit reduction numbers, when added together they total $24.7 billion dollars. If you subtract that from the total “shortfall” (deficit) of $26.6 billion, that leaves $1.9 billion, so why is there still a remaining $13 billion to deal with? I couldn’t help notice that the $13 billion number is very close to the $14 billion solution number. If this is the kind of math/accounting that our government has been using, no wonder no one can figure out how to balance our budget.
    I say we start over at the basics, state government is for a very specific set of functions, not left to the federal government, i.e. infrastructure, schools, law and order. The rest is for the local communities and government to handle, as they are obviously the closest and best equiped to handle issues within their community. And we stop looking for state and federal government to fix everything and do everything. We’ve become like the 35 year old that won’t leave home because he/she has it too good. Well mom and dad are broke now and the gravy train is done, move out and learn to make it on your own.

  22. Kay Tokerud says:

    What a bunch of regurgitated baloney. The spendthrifts of the far left progressives want to blame everyone else for our problems. The biggest problem is bloated government that keeps hiring more people to create programs to TRANSFORM the way we live. No thanks, I can figure that out on my own.

    Government workers don’t produce anything that can be sold to raise revenues. They can only tax us. Small businesses can make things of value and bring in fresh cash and produce jobs. We need to replace government jobs with private sector jobs that are actually doing something to improve our economic health.

    To raise money for even larger government, they think a tax on carbon will pay for all the social engineering programs they are working on. Too bad, having that tax would put a damper on all economic development because it takes energy, which means carbon, to do anything. Taken to its logical conclusion, just living produces carbon, so a carbon tax is a tax on living too. The amount of green projects will not be large enough to offset the negative effects of having a tax on carbon. But the unions don’t care because they think this will mean high paid work for them. The electrical unions all over California funded Michael Allen’s campaign and he is clearly beholden to them.

    Look up TRANSFORM, and transition towns, and you will see what our money will be siphoned off to. It takes a zillion consultants and facillitators to pull the wool over the taxpayers’ eyes. If the current batch of elected politicians have their way, our current form of government and way of life will be changed forever. We need new leadership.

  23. John says:

    @ Mike – I feel your pain brother but I have to ask:

    Have the public unions raised the price of gas, Have they increased your interest rate or devalued your home and sent you a forclosure notice, have they changed the cost of transporting your food thus raising the cost of it? No to all of those.

    Actually all of those hardships you are facing is because of wall street, financial institutions, and Big corporations making huge profits at our expense. Those same people contribute to the Republican party to have their taxes lowered, change the laws so they don’t have to report contributions, leveraged tax code so they don’t even have to pay taxes and in some cases recieve a tax refund because they can claim their losses in the U.S. but claim their profits internationally. So who makes up for it? YOU do, I do, & all who don’t make enough to have massive write-off’s!

    Now they want to control the Billions of dollars in the Pension funds so they’ll sing songs of “Unbelievable benefits” and “Unfunded Liabilities”. Then they throw you a few numbers of the few like the Chief of New York (who is basically the CEO of a several thousand employee company) and say “THEY shouldn’t be able to make that much money” and you all bite like hungry fish. All the while sipping their cognac, high fiving each other and praising the success of their deception.

    Earnings season is coming. Watch to see who is posting profits. It’s not the public employees. We’ll be negotiating losses. Even though we allegedly OWN the Democratic party.

    Take note of GE who paid -60% Federal tax.(we pay them) Then go and ask me to potentially risk my life or debilitating injury longer to Earn less and try to figure out why I don’t jump for joy.

    I do feel your pain! It’s not us who is causing it.

  24. rmbadger says:

    a total socialist

  25. rmbadger says:

    the man is a marxist plain and simple

  26. Phil Maher says:

    Ho-hum…send in the next scapegoat. I don’t think we even know what’s really wrong anymore, just who we’re supposed to blame for whatever it is. Maybe the real solution is to stop putting different lipstick on the same pigs, and to let them know that they’re no longer welcome at our dances.

  27. Mike says:

    The real question is are the democrats willing to cut the spending, cut public pensions and cut the employees to a sustainable level in California?

    The democrats don’t need partners to do this they need new leadership and a willingness to be responsible. Will they do anything? No, not while they are owned and operated by SEIU, the teachers union and the other public unions that put them in office.

    I for one am sick and tired of politicans like our friend Michael Allen who comes accross as stale beer telling us what the Republicans are not doing. The democrats have controlled the state legislature for decades and they have done nothing but spend, spend and spend some more. They have given their consitutents, the public unions, unbelievable benefits and now the bill has been presented and their credit card is limited out.

    I am having trouble paying the gas bill I pay to commute to work, my house payment and the household food bill.

    New taxes, NO WAY!!! Get a life Mr. Assemblyman. Cut the budget and learn to live with it. We have to do it and you and your fellow politicans should try it. You might learn something.

  28. MOCKINGBIRD says:

    Thanks Michael for representing the workers of Sonoma, Napa, and Solano Counties and their families.

    Now, if only we could have a few more like you in the California legislature, maybe something could be done that isn’t done on the backs of the indigent, disabled, elderly, working class families, children, and small middleclass businesses.

    I want to see a tax on oil extraction like other states charge the oil companies. And a raise of 1% or 2% on the rich. Afterall, they need and use CA infrastructure and they should pay their fair share. Businesses also need educated and skilled workers, so they should pay their fair share of the cost of education.

  29. bear says:

    Why is it that republicans in both the State legislature and Congree seem to be mean-spirited and driven only by far right ideology?

    Simpler to take the revenue deficits YOU manufactured and drive the economy deeper into recession? Every employed person spends money, but the unemployed -whether or not they are public employees – DON’T spend money.

    How hard is it to figure out that money not spent is not helping economic recovery?

    This includes the trillions held by the ultra-rich. They don’t pay taxes equal to the benefits they receive. They take the tax breaks, and offshore jobs and take the tax and financial benefits. They say “thank you very much” and put the money in their pockets.

    So we have manufactured deficits thanks to bad economic policy and tax cuts and military spending. Who does it profit? Follow the money!

    And God help us if we ever touched defense spending or reconsidered our endless wars!

    Trillions for “defense” but let the schools go broke?

    Let’s spend ourselves into republican debt, shortchange the kids – then profit at the polls because we’re now a country of dimwits?

    Check the polls on American intelligence. I really enjoyed the TV coverage of how much people thought went to socialit programs such as foreign aid and public broadcasting. PBS is 10% of the federal budget? Try 0,1%

    Our dumb kids (by any test you care to apply) will certainly save us and curse us?

  30. Steve Humphrey says:

    You mean to say the Republicans are holding you up because they want to talk about pension reform, and the Democratic party members don’t? We can understand that these necessary reforms are in conflict with the agenda of the Democratic parties largest contributors, but do you really think it is in California’s best interest to saddle our next generation with a budget deficit closer to a half trillion?

  31. GAJ says:

    Had your party not fought tooth and nail to fight the reforms proposed by Arnold, then we perhaps we would not be in this mess…but of course your Party has been pushing us toward a fiscal cliff for decades.

    Here is how just one paper in 2005 crowed about the “victory” over Arnold’s relatively innocuous reform measures:

    “The unions spent millions of dollars to beat Schwarzenegger’s propositions to limit the use of their member dues for political purposes, cap state spending, redraw legislative districts and restrict public-school teacher tenure.”

    http://www.foxnews.com/story/0,2933,175009,00.html

    Fortunately, even the brain dead voters of California have woken up.

    Personally I’d like to see the measure on the ballot, so it could be soundly defeated, but I can’t blame the Republicans for playing hard ball after the way they have been treated in Sacramento for decades.

    I predicted, also that your party would fight Jerry Brown tooth and nail if he tried to do the right thing with Pension Reform and bloated government.

    I look forward to you and your colleagues proving me wrong.