California Insider

Gov. Arnold Schwarzenegger and local government officials plan a full-court PR offensive Wednesday on behalf of their latest proposal for shifting local money to the state for two years and then blocking future such transfers.

Schwarzenegger today e-mailed hundreds of officials from around the state, calling on them to support the latest framework. And on Wednesday, officials in San Diego, Sacramento, Los Angeles and San Jose will hold press conferences to try to bring pressure on the Legislature to side with the governor.

The framework supported by Schwarzenegger would not only prevent the state from taking local government money in the future, it would also lock in the distribution of property tax and sales tax – and all future growth – for each city, county and special district in the state.

So the governor who promised to attack California’s long-term, structural problems has abandoned that goal in this case in exchange for a couple billion dollars of short-term help with his budget problems. California needs a major overhaul of its entire system for financing state and local government. As part of such a reform, it might make sense to give the locals protection from future, arbitrary changes in the distribution of tax revenue. But instead of leading that discussion and using his power and popularity to enact it, Schwarzenegger is grabbing his $1.3 billion for two years and then trying to lock a dysfunctional system into the constitution.

The negotiations over this deal have gotten downright wacky. The latest proposal includes a complicated, convoluted series of conditions for when the Legislature could shift local money to the state via loans. Twice in ten years. No more than $1 billion each time. Declaration of emergency. Each loan must be repaid before another is made. This is nutty. They are talking about $2 billion in a state budget picture that would total at least $800 billion over a 10 year period. Why bother?

It would be far better to give the locals the iron-clad protection they seek – in exchange for a complete, rational overhaul of the entire system that fixes disincentives, connects responsibility for revenues to the spending of those revenues, and gives local governments a greater ability to raise money for their own programs, with voter approval. All of these things Schwarzenegger supports in principle. But he is not willing to fight for them, at least not now.

He has lost the chance to do that this year. There isn't time with the budget hanging in the balance.

So maybe the governor should just take the $1.3 billion, as he proposed in January, and let the locals make the case for their own ballot initiative, Proposition 65, in November. If that’s what voters want to do, then we’re stuck with it. But if it fails, then he can bring everybody back to the table on Nov. 3 and work on a true reform worth putting his prestige behind, and one that creates a legacy on this issue of which he could be proud.

Here is a copy of the latest framework.

That's how the correctional officers union views its recent deal with Gov. Arnold Schwarzenegger, according to this piece in the LA Times. The article details the benefits that union members got in exchange for agreeing to defer part of their salary increase for a few months: more paid time off for union bosses, better health benefits, access to videotapes showing prison violence (to use for public relations purposes) and the big one: the right of middle management supervisors to dictate their own schedules to upper management, subject only to seniority, the way rank and file guards already do.