California
California’s Budget Deficit Is Not the Problem | Connecting California
California’s constitution is full of guarantees and formulas that ratchet up spending on favored programs, writes columnist Joe Mathews, even when revenues drop and the budget is out of balance. California Governor Gavin Newsom during a news conference on May 10, 2024. Courtesy of AP Photo/Rich Pedroncelli.
You can tune out Gov. Newsom when he talks about the state’s big budget deficit. Ignore the pleas of Democrats who control the legislature, too. And turn the volume down when Sacramento lobbies complain about the proposed cuts.
California’s ballooning budget deficits, and the cuts to services they cause, are not a crisis. They are not really news. They are, sadly, normal and predictable.
And they are grounded not in budgeting mistakes—lapses of discipline in collecting revenue or controlling spending—but in our state constitution and in a reality so paradoxical it would make Kafka blush:
Our constitution requires the state to balance its budget. But balancing the state budget requires violating the state constitution.
How’s that? Because on fiscal matters, our constitution is effectively a ratchet. The document is full of guarantees and formulas, approved by voters, that ratchet up spending on favored programs, even when revenues drop and the state budget is out of balance.
Meanwhile, the constitution also has plenty of voter-approved limits on taxes and fees. These limits ratchet down revenues in slower economic times and make it harder for the state and local governments to raise revenues to cover budget increases.
Californians may have forgotten about the ratchet. The past decade was an unusual one for the state budget, as stock market growth and federal pandemic relief sent government revenues soaring and created surpluses.
But with those revenue sources gone or declining, California’s Kafkaesque constitution is reasserting itself and producing deficits projected recently to range anywhere from $27 billion to $70 billion.
That leaves Gov. Newsom stuck and left to do with the budget what all California governors must:
Violate the constitution.
First, he’s not offering a balanced budget. The spending delays, draw-downs on reserves, and cuts he’s proposing to state operations eliminate only about half of the deficit.
Second, to close the gap, he’s violating the state’s education funding guarantee, a voter-approved formula called Prop 98.
Our constitution requires the state to balance its budget. But balancing the state budget requires violating the state constitution.
Prop 98 is, famously, so complicated that no one really understands it. (It involves three complex formulas to determine state funding, and it’s never clear really clear which formula will apply in which year.) The main effect of Prop 98 is to keep pushing education spending up; it’s one of the biggest spending ratchets in our constitutional budget ratchet.
Newsom’s maneuver is a sneaky ploy to reduce Prop 98’s ratchet effect by changing the inputs to the formula. Newsom’s budget proposes to travel back in time and reclassify certain moneys spent on education in previous years as non-education spending.
This maneuver is intended to lower the funding base underneath the formulas—helping him “balance the budget” while allowing the ratchet to do its work.
The problem (besides the inherent ridiculousness of having to bend the law in this manner) is that the lower funding base would mean tens of billions less in school funding in future years.
Yes, my fellow Californians, “screw the kids” remains the real, if unofficial, state motto.
The powerful education lobby is crying foul, as are some Democrats and local governments. Newsom defends himself by saying he’s required to balance the budget.
The problem with this blame game—and demands that Newsom reverse the cuts—is that it defines the discussion as being about the budget. The real problem is California’s broken constitution.
Finding tens of billions of dollars in cuts for anything is hard. Health programs have all kinds of court-ordered, statutory, and, in some cases, constitutional protections. Cuts to prisons and state agencies require concessions from politically powerful labor unions. Tax increases run up against Prop 13 and other state revenue limits.
That doesn’t mean I’m trying to let Newsom, the Democratic supermajority in the legislature, and other powerful Sacramento interests off the hook for the state’s budget problems. It’s the exact opposite. The governor, Democrats, and interest groups are responsible for the budget mess—because they’ve had plenty of time to fix the constitution, and haven’t even tried.
Gavin Newsom has been in statewide office since 2011. California Democrats have had full control of Sacramento since that same year. And powerful unions and other lobbies have held sway for far longer than that.
All of these politicians and lobbies know very well that the California constitution is broken. They have long had the power to come together and give the state the new constitution it needs—without all the fiscal ratchets that drive up spending and limit revenues.
But they haven’t been willing to lead and change the system. They have focused instead on building their own power within this broken system. Jerry Brown and other California leaders have spent the past decades dismissing calls for a constitutional rewrite (including my own, via the book California Crackup) as unrealistic.
But state leaders are the ones who have lost touch with reality. They claim they can fix the budget, but they can’t because the constitution won’t let them. And they won’t fix the constitution because they say it’s politically impossible. How long can they keep saying this—and keep pretending they are doing their jobs?
When the governor and legislators say they are trying to solve the problem, they aren’t telling the truth. This miserable budget, full of cuts to education, is a product of the budget system, and the constitution, that they themselves have chosen.
California
California Highway Patrol work to keep drivers safe during holiday weekend enforcement
BAKERSFIELD, Calif. (KBAK/KBFX) — The California Highway Patrol is urging drivers to stay focused on the road as they head out for Fourth of July celebrations.
The holiday weekend can be a dangerous time on our roads as millions of drivers are expected to travel.
CHP Officer Jorge Toro joined Eyewitness News Mornings to share how drivers can stay safe behind the wheel.
Officer Toro also highlighted the importance of sober driving over the holiday.
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He says anyone hosting a party should make sure all of their guests get home safely, ensuring anyone who may be impaired doesn’t drive.
California
California returns stretch of coast to Indigenous tribes. ‘This is beyond huge’
California is returning a stretch of rugged Mendocino County coast to the Indigenous nations whose ancestors once stewarded its shores.
State transportation officials recently approved the transfer of Blues Beach and the surrounding bluffs to Kai Poma, a nonprofit founded by representatives of the Sherwood Valley Band of Pomo Indians, Round Valley Indian Tribes and Coyote Valley Band of Pomo Indians.
The transfer of 136 acres just south of the community of Westport will mark the first time land managed by the California Department of Transportation has been returned to Indigenous tribes.
“This is beyond huge,” said J. Carlos Rivera, tribal chairman of the Sherwood Valley Band of Pomo Indians. “It’s enormous from our tribal perspective that we are basically obtaining the land that our people once lived on before colonization.”
California purchased the swath of rocky cliffs and windswept shoreline in the 1960s to expand the construction of Highway 1 and create a scenic viewpoint for highway travelers, according to a California Coastal Commission report.
More recently, public access has been largely unregulated, and summer weekends and holidays have drawn large groups who camp and party on the beach, at times driving through sensitive areas, damaging cultural sites and leaving behind trash, the report states.
Kai Poma plans to conduct cultural and archaeological resource studies and environmental surveys and then prepare a resource management plan for the property, according to planning documents. The nonprofit and the Coastal Commission have drafted a public access management plan that states the land will be open from sunrise to sunset.
Rivera described the entire property as a sacred site. The coastal waters are used by tribal people for seaweed and abalone gathering, and the shores host youth cultural camps, he said. “Protecting the land, it has a deeper meaning for us because we’re connected to the land,” he said.
The effort to acquire the land took years — and required a change in state law. Caltrans lacked the ability to transfer land to tribal governments until 2021, when Gov. Gavin Newsom signed a bill sponsored by state Sen. Mike McGuire (D-Healdsburg) that enabled the transfer, according to a news release issued at the time. The law also bars commercial activity on the property and requires public access be maintained.
“With 136 acres now officially transferred into tribal stewardship, one of the most spectacular stretches of the Mendocino Coast will be forever protected,” McGuire said in a statement.
“This agreement, the first of its kind in California, gives these three dynamic Native American tribes the rightful opportunity to reclaim sacred lands and cultural traditions on this special piece of earth. And it’s about damn time.”
The land transfer cleared its last regulatory hurdle June 26 with the approval by the California Transportation Commission, said Neil Thapar, an attorney who works as an advisor and legal consultant to Kai Poma. Caltrans staff will next record the deed transferring the title from the state of California to Kai Poma, which is expected to happen any day, he said.
California
What’s open, closed for Independence Day weekend in California?
Fireworks Safety Guide
Essential safety tips for buying, handling, and watching fireworks to ensure a safe celebration.
With July 4 falling on a Saturday this year, many businesses and organizations are taking the day off Friday, July 3, to mark America’s 250th birthday. From banking to mail service, here’s what’s open and closed for the holiday weekend.
Most federal offices closed, mail service to continue
Non-essential federal offices will be closed on July 3. However, mail service will continue as normal, and post offices are scheduled to remain open.
Most California government offices to remain open
Most California government offices will be open on July 3, with some exceptions.
DMV offices throughout the state will be open. However, the Employment Development Department will be closed.
DMV offices that offer Saturday hours will be closed on July 4.
Private parcel services to remain open
UPS and FedEx are both scheduled to operate normally on July 3, but will suspend service on July 4.
Stock markets closed
Both the New York Stock Exchange and Nasdaq will be closed on July 3.
Most banks to stay open
While most banks were expected to operate normally on July 3, some may operate under modified holiday hours. All banks will be closed on July 4.
Online banking services should remain operational.
Grocery stores
Most major grocery chains will be open on both July 3 and July 4. Trader Joe’s locations will be open for regular business on July 3 but will close early at 5 p.m. on the Fourth of July.
Retailers
Many major retail stores, such as Walmart and Target, plan to operate under normal business hours on both July 3 and 4. All Costco warehouse stores operate under normal business hours on July 3, but will close on July 4.
Restaurants
Most major restaurant chains remain open on July 4, but some will have limited hours. All Raising Cane’s locations will close on July 4.
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