Charitas Dictator: My Solutions to CA Financial Crisis

Even San Francisco rejected them. By a landslide the voters of California told its government, "We do not want more taxes. We do not want you raiding one account to pay others. We do not want to extend your ability to spend our money with impunity." So now what? What will our dysfunctional state government do to change its culture of spending on salaries and expanding government?

Were I placed in the role of Charitas Dictator of California I would enact the following decrees as solutions to California's budget difficulties today and fix them for future years. Someone has to stick their neck out, goodness knows our Legislature will not as evidence by their continuous use of Propositions to do their jobs.

Make it harder to get Propositions on the ballot. Too often our state Legislature shirks their responsibility in making difficult decisions by putting propositions on the ballot and letting the voters decide. The Propositions that were on the ballot on Tuesday never should have been sent to the voters. Not only did voters say "No" to tax increases and more spending, they also said "No" to the Legislature when asked to do their job. Restrict the Legislature from placing any propositions on the ballot, increase the number of signatures required for the people to place an initiative on the ballot from 5% of the turnout from previous gubernatorial election to 10%.

Eliminate term limits. Combined with the changes in the redistricting process that become effective in 2012, we should eliminate term limits for members of the Assembly and Senate. The revolving doors in Sacramento create revolving doors in elected offices throughout the state creating instability and politicians spending more time collecting donations and working for election to the next level than paying attention to their current jobs and constituents. Elections are term limits, do not limit how many an individual may win.

Spending cap mandates on the State budget. Regardless of revenue the growth of the state budget should be capped at a formula of population growth and inflation. If revenues exceed spending funds should be divided between paying down debt, funding reserve accounts, returning funds to counties and cities and returning taxes to tax payers in the form of rebates. Increased revenues over a prolonged period should not enrich those who work for the state, but rather should be returned to those who provided the excess revenue.

Budgets are made on revenues received not forecast. In conjunction with the previous item, lawmakers will not longer use budget projections to create budgets. Too often the projections are wrong, or are misleading, to allow higher spending and balancing the budget for signature only to see revisions later in the fiscal year. All budgets going forward would be based upon prior fiscal year revenues--you can't spend what you did not collect. The current budget crisis is worsening because of the spending built into the budget and a complete failure to accurately predict revenues for the current fiscal year. I realize this proposal has a one year lag time; we are already spending fiscal year 2008-09 revenue leaving none for FY 2009-10. Therefore a special bond would be floated to provide revenue for the first fiscal year of the new budgeting process. Every budget for the next fifteen years would first carve out funds to pay down the bond from revenue collect the prior year before any other spending items are placed in the budget.

Negotiate with public employees: a lot of job losses or fewer job losses. California has 235,000 employees, does anyone really feel everyone of those jobs is necessary? As charitas dictator I approach each of the public employee unions and offer them option A or option B, their choice: Option A is the elimination of 15% of the jobs represented by that collective bargaining unit. Option B is the elimination of 10% of the jobs and those who remain will have new contracts reducing benefits and limiting salary increases to be the same formula used to allow for increases in the budget. Benefits would change such that all employees would contribute on par with those contributions in the private sector to retirement accounts: the state will match 50% of your personal contributions up to a maximum amount that equals the limits imposed on private sector employees. Medical benefits would be paid based on the MediCal rates of coverage; our state is already insuring and paying for the medical benefits of millions of Californians, if this insurance is good enough for them it should be good enough for the 200,000 plus public employees. If an employee wants private insurance they will be credited the amount of the insurance premium payments equivalent to the MediCal premiums. These reforms are enacted for all state employees, not just those who are union members, but anyone who receives a check from the State of California.

No more state resources used to collect political donations. The state will not longer allow payroll deductions to collect donations made to the political units of the employee unions. The state will not pay for the accounting, collection and distribution of funds used to elect individuals to public office. Public employee unions must collect their political donations directly from the individual union members not from the state through their paychecks.

Reform MediCal so it is equal through the state. There is so much institutional dysfunction in the MediCal system that wastes so many millions of dollars that it is hard to know where to begin; so let's over simplify the program. First, all hospitals will receive the same reimbursement for the same treatments, no more tiered payouts depending on where the hospital is located or whether the hospital is contracted with MediCal--the same for payments to doctors and other health care providers. If it is mandatory that anyone walking into any hospital be treated then it should be required for the state to reimburse all health providers equally. This alone will eliminate the need for a huge amount of staff that is currently utilised to review and deny claims, process appeals, approve claims, cut the reimbursement, all on a patient by patient basis. If a hospital or health care provider is found to have engaged in fraud then immediately begin fraud prosecutions, and put in place a leadership team to ensure the hospital stays open. This single pay provision will also save hospitals and health care providers up and down the state hundreds of millions of dollars in personnel costs used for accounting the current complex MediCal system of payments. It will benefit patients in that they will not have to be transferred from non-contracted to contracted hospitals and no matter what hospital they go to in the state they can expect the same level of care.

Reform the education system. Eliminate the mandates for programs that create a one fits all mentality. Cut the State Department of Education in half and push the savings down to the local school districts. Allow the school districts to have more control over their budgets and how they wish to spend their revenues. Using standardized tests, if districts fall behind take over the district and slowly re-integrate local control; such as occurred with Compton Unified School District in recent years. Put more control closer to the parents through their local school boards and Superintendents. With increasing power in Sacramento we have decreasing opportunities and programs for our children, we need to reverse that trend.


Encourage department managers to succeed and reward success. Too much money is added to our budgets to maintain prior years' funding, whether the funds are needed or not. Reward department managers who are able to show year after year after year savings with financial incentives. Allow managers to present five year plans for projects and place into their budgets funds to save for future expenditures for capital improvements. Allow managers of our public funds to operate as their counterparts are allowed to operate in the private sector, plan for success and reward success. Our current system does not bring accountability into the management of public funds nor does it allow for long term planning; managers are operating on a year to year basis without encouragement to be innovative or creative in product delivery. Changing the culture will encourage more entrepreneurial management and will attract individuals who thrive in such an environment.

Cut taxes. Roll back the sales tax by 2.5% across the board. Roll back auto registration fees by 10%. Cut the income tax rates by 1.5% for every level and raise the income levels for each tier so they more closely match those at the Federal level. You cannot tax your way out of a recession. Study, after study, after study shows that raising taxes cuts revenue, lowering taxes raises revenue. Look at the states that have done well during our recession and you will see states that are attracting businesses and jobs because of their low tax rates. Even during the economic growth from 2002 through 2007 California's business community grew slower than most states. Taxes are killing job development and growth in this state. We need to attract wealth and investment, we do that by allowing success to accrue to those who succeed.

Drill for oil. Open the coastal oil fields for development and extraction. Follow the leadership of Governor Sarah Palin in Alaska and the deals negotiated with the oil companies to extract oil and natural gas from her state. For the Palin haters ignore who and concentrate on the results, a tremendous spike in revenue for the State of Alaska. California is sitting on hundreds of millions of dollars of revenue that could benefit our state, unfortunately a small minority has been allowed to deny those funds to the people of California. I find it appalling that the Legislature and Governor find it okay to throw a huge tax burden on the families of this state but refuse to extract the millions of dollars of revenue sitting right off our shores.

Sue the Federal government. Require providers of service receiving state funds to document whether the recipients are legal residents of the United States. If they are not then send a bill to Washington D.C. Prisons, hospitals, schools, law enforcement are all expending resources to pay for services provided to illegal aliens allowed into this country by lax federal enforcement of our borders. Take the Feds to court and recoup the billions spent by California tax payers every year as a result of the problems created by Washington's inability, or refusal, to address this problem.

Require and accounting and spending of money from Propositions. We have billions of dollars that have gone unspent because of voter passed initiatives; from stem cell research, to Rob Reiner's cigarette tax, to fixing the Delta to avoid a Katrina type collapse, to countless other propositions passed and funded but not accounted for to see if the projects have been completed or even worked upon. Every proposition that requires bond funds would also have an audit component for review every two years. If within five years at least half the funds have not been spent to accomplish the purpose of the proposition then the funds are returned to the State, the bond is paid off and the project(s) shut down. There is no accountability for any of the funding for the multitude of propositions passed by the voters, seemingly on a whim. Most of the spending propositions benefit a very narrow segment of the population, make them accountable for the funds or they lose all of them.

Keep the two-thirds majority requirement. I would not change the requirement that all budgets and tax increases require a two-third majority vote in the Assembly and Senate. One can imagine the budget problems we would be having if it were not for this rule and if the Democratic majorities in both houses had the ability to pass budgets with a simple majority. Only the hold out of Republicans have lowered the tax increases from initial Democratic proposals and lessened the spending in the proposals. Unfortunately every year the necessary two or three Republicans have eventually jumped over the line and allowed the horrendous budgets of the past decade to pass. Removing the two-thirds obstacle will remove any filter on the budgeting process.

Given the ideological bent of this state and the control the public employees have I am certain that these proposals would probably fail in any general election, which is why I would have to enact them as the Charitas Dictator, or Benevolent Dictator. For our budget problems in this state to be solved in the short and long term we will need someone, or more likely several someones, to have the courage to stand up and loudly proclaim specific solutions to our problems.

We Are Californians Not Colonists

In 1765 the British Parliament passed the Stamp Act, a tax which was imposed only on the American Colonies. The purpose of the tax was to fund the presence of the British military in the American Colonies, where they remained after the conclusion of the French and Indian War. While later repealed, the Stamp Act was a major factor in coalescing the American Colonies into a single political unit for the purpose of fighting the Stamp Act and other taxes later imposed on the American Colonies by the British Parliament. The British saw the Colonies as a source of revenue and also a source of geopolitical advantage in spreading their control across the American Continent using the British Army and Navy now garrisoned in America.

Of course the most important phrase to come out of the Stamp Act was the rallying cry that began in Boston and spread through the Colonies, "No Taxation Without Representation." And Representation began with every colony sending representatives to Philadelphia which later became the Continental Congress; which as we know later became the Constitutional Congress and still later the Congress of the United States of America.

Now we find ourselves in the 21st Century on the far side of the North American Continent from the original American Colonies in the State of California. Like the 18th Century American Colonists citizens of California are finding themselves subject to increasing amounts of taxation to support what they see more and more as a foreign government, when in fact it is the government of their own making. And like 18th Century American Colonists more and more Californians are feeling their taxation is coming without representation, when in fact they cast the actual votes that have elected those passing the taxes. Juxtaposing a more modern phrase with that of the American Revolution, if perception is reality than in many Californian households there is taxation without representation.

There are numerous factors that have led our State Legislature, abetted by the signature of whomever held the Governor's office, to the current state of financial collapse in state finances. The most basic and over-riding cause has been the explosion of spending in Sacramento over the past ten years or more that has doubled the size of the California government expenses. This has been enabled by the combination of term limits and gerrymandered legislative districts which ensured not only a Democratic majority for both the State Assembly and Senate, but ensured further that each District is so gerrymandered that only the most Democrat of Democrats or Republican of Republicans stand any chance of getting elected in the jigsaw shaped district they represent.

Further compounding the issue has been the question of representation. Who exactly have the Legislators in Sacramento been representing? The middle income families who are paying the highest income tax rate in the nation? The lower income families who are paying the highest sales taxes in the nation? The children in the State's public schools who while having the highest paid teachers in the nation score near the bottom in standardized tests? The business owners who have been taking their businesses out of the state, and during the sustained period of economic growth from 2002 through 2007 did not open new businesses in our state? Are any of these groups represented by the budgets passed in each of the past ten fiscal years by our Legislature? The answer is no, and because of that we ask, do we have taxation without representation in the State of California?


We get what we elect and the majority of Californians have blindly followed the path of campaign ads, political flyers and what the letter is inside the parentheses on the ballot--for the Legislature if there is a (D) then it gets elected in almost 60% of the State. And who funds that (D)? Prison guards who created the most expensive prison system in the United States. Teachers' unions who have the largest amount of spending on education in the United States and the highest teacher salaries. Unions representing almost all of the 235,000 state workers from Chula Vista to Redding, the most of any state in the United States. Year after year, election after election these groups have poured millions of dollars into state political campaigns, almost exclusively funding the candidates of one party, and year after year we have seen budget after budget paying these groups back with increased numbers of employees, higher salaries and higher benefits. And now the people of California are waking up to the reality of what has happened to them.

The Governor and other officials up and down the State have been on a tour trying to scare the people into voting for Propositions 1A through 1E on Tuesday. The message is the same, if we do not pass these measures we will face an even greater budget deficit. We will have to lay off some government workers (at latest count about 2%), we will have less money for schools, for prisons, for the fixing of infrastructure.

What they do not say in these Scare Rallies is the even if the voters do pass Props 1A-E, and increase the highest taxes in the nation for even longer, if we will still have deficits in the coming years because of the massive give-aways in the previous ten budgets. None of these Propositions unravel any of the previous spending or contracts, all they do is perpetuate them.

Just as the Colonists formed the Stamp Act Congress which eventually led to the Declaration of Independence, the People of California need to band together and overthrow the ideas of those who govern us. We need to defeat everyone of the Propositions on the ballot and force our Legislature and Governor to address the real problems we face: too much government, too much government spending and too much of our hard earned money that is taken from us in taxes going to pay too many people salaries and benefits that are too high.

It is time for the people of California to quit enabling Sacramento while disabling our schools and communities and future.

Vote NO on Propositions 1A through 1E. Tell every elected official in the State "No more taxes, no more spending."

Rebuttal To Teacher Union President On Props 1A-E

On Wednesday the Press-Telegram ran a letter to the editor from Michael Day, President of the Teachers Association of Long Beach (TALB) which I re-print below and link here. Mr. Day uses his letter to try to convince voters why they need to vote "yes" on Propositions 1A through E on Tuesday May 19th; or should I say scare voters into supporting the measures?

I have been publicly critical of Day in the past, most notably several posts I wrote for the Long Beach Post (you can click this link then put TALB in archives section, or for sample see this post); the main source of my criticism was not so much Day as the Executive Director of TALB until his dismissal last year, Scott McVarish. Since McVarish arrived in Long Beach TALB became increasingly militant and power hungry in his attempt to control the Long Beach Unified School District. After a take over of the union by the California Teachers Association and an audit which showed significant malfeasance by more than one staff member at TALB McVarish "resigned." During this period Day was the President of the local and acted very much in concert with McVarish and his plans for controlling the district. Since McVarish has left TALB has been working for their teachers more and against the district less.

With that as background here is Michael Day's letter to the editor on Wednesday May 13, 2009 to the Press-Telegram, my letter will follow:

Propositions support schools

For the last few years the employees and students of Long Beach Unified have dealt with dwindling support from Sacramento while maintaining high academic standards. Because of decreased funding we have seen support for students cut through reductions of specialists, aides, nurses and tutoring programs as the district works to maintain fundamental services for our kids. Even services we used to consider part of our core program, such as libraries, music and counseling, are being pared back to near non-existence.

The public needs to realize how important propositions 1A through 1E are to our schools. We need to support propositions 1A and 1B to restore the $9.3 billion Sacramento has taken from our schools while creating a plan to repay those vital funds. We need to support propositions 1C through 1E to ensure our schools do not suffer billions in cuts next year. We have been getting by the last couple of years, while making great academic gains, but a defeat at the ballot box will only cause suffering for the students we serve and the people who serve them.

For years teachers have been told we must do more with less. But if propositions 1A through 1E do not pass we will do less with less. The public and the politicians demand a great deal of accountability and performance from our schools. And in Long Beach our teachers, administrators and classified staffs meet those challenges. But until the public and politicians
are willing to equate adequate funding with performance we will not have the system our students deserve. Not for a lack of effort on our part but for a lack resolve on theirs. Please vote "yes" on Propositions 1A through 1E.

Michael Day
President
Teachers Association of Long Beach

Today, Thurdsay May 14th, the Press-Telegram printed my rebuttal to Mr. Day (link here, 2nd letter):

Support for schools

Re "Propositions support schools" (Letters, May 13):
Michael Day, president of the Teachers Association of Long Beach, is right: Our teachers, administrators and staff in the Long Beach Unified School District do a tremendous job educating my children and tens of thousands of others. He is correct that every year this job is being done with less and less support from Sacramento.

However, Day and others in Sacramento and in the public employee unions are perpetuating a fallacy in saying we must support Propositions 1A through 1E so our schools and other services will not face more cuts. Even if the propositions pass we will see cuts in services while state government continues to grow.

In the past 10 years the size of the state budget has doubled. Since California must have a balanced budget, this means that revenue to the state has also doubled in the past 10 years. In the past few years our schools have cut computer classes, science camps, counselors, music, reading and arts programs. Our state government has doubled in size and our school programs have been cut with more to follow.

I ask Mr. Day and other supporters of the propositions: In the past 10 years has the quality of education doubled? Has the funding for local schools doubled? While we have seen our taxes increase have we seen a corresponding increase in the level and quality of services delivered? I answer "no" to each of these questions, just as I will also vote on Props 1A-E.

What makes Mr. Day or other supporters of Props 1A-E think that giving Sacramento more money will not lead to even more cuts in funding for local education and programs? Voting "yes" on Props. 1A-E will just enable Sacramento to continue to spend our tax dollars to the benefit of public payrolls with no tangible benefit to our students or our citizens. If you need proof just look at the last 10 years.

Dennis C. Smith
Long Beach

Quit enabling Sacramento while disabling our schools and communities, vote no on Props1A-E!

California Math: Double Spending = Cutting Funding

After writing my post earlier this week on the inability of school districts to remove bad teachers I began to think of the lack of control our local school districts really have. It seems the closer one is to the student the less control there is in the education and the decisions relating to it. The control and direction of funds is upside in my view. The on-site administrator, the principal, has almost no budget control; the local school superintendent is pushing money into boxes established by the State Department of Education; and the State funding and spending is also dependent on the Federal Department of Education. The person closest to the student has the least say in what programs may be needed at a school and what programs are not needed.

This has evolved because of several factors, primarily because our education system has evolved into one size fits all. This results in mandates and programs that must be implemented for students in rural Turlock as for urban San Francisco. Not trusting school districts to properly care for the children in their own communities, the state mandates how funds are to be spent restricting the maneuverability local school boards and superintendents need to fit their students in their district.

In the background of this is of course the budget, which is actually in the foreground. I am having a very hard time understanding how our State Legislature has passed budgets that have doubled spending from Sacramento in the past ten years, yet my local district is cutting programs that existed ten years ago. How bad is your government when it doubles in size across the state in a decade, but the programs available to your children ten years ago have to be eliminated because of lack of funding from the state? It speaks to the corrupt culture that is so pervasive in our election and budget process that those public employees' organizations who have donated so many millions across the past decade to elect the majority of our legislators have received raises and increased benefits in budget after budget, yet at our local school we are raising money to retain a computer lab instructor.

I will beat this drum again, and again, and probably several more times, the California voter has no idea what he or she is voting for when punching a ballot. Every single summer we go through the same budget crisis and some time in July or August or even September a few Republicans will cross the line and vote for another budget that increases spending in California--but not in the classrooms. Raises will be given to prison guards, state sanitation workers will be given higher retirement benefits and a guaranteed no lay off clause, Assembly aides will be promoted and paid well into six figures, and no voter will bat an eye to vote for the same person in the next election. All of this abetted by first Gray Davis and now Arnold Schwarzenegger.

In Long Beach the district has had to cut the science camp trip for fifth graders, a rite of passage in the culture of the district, as I said our campus is raising $50,000 to retain a full time computer lab teacher, other friends say they are losing Spanish instructors, or physical education (we already lost ours), or what music or art instruction they may have. Program after program is being cut from a budget that is getting less and less funding from Sacramento despite the doubling of the budget in the past ten years.

The new math in California: double spending while cutting funding. And we can expect it to continue because the public employee organizations will poor millions more into the coffers of our elected officials, primarily Democrats--or I should say exclusively--who will pass more budget items favoring the employees over the citizens, favoring their salaries and job security over children's education.

Our system is truly broken and needs to be fixed. For education my proposal is to release the mandated spending from the state and give funds to the districts. Then let the districts determine how best to put the funds into the classroom. Release control of education back to the local community. If a district is failing and it is evident the funds are not being spent in a way that is educating the children of its community then the State can step in with a program to rehabilitate the district. But do not make every district suffer because of the few who may mismanage their funds. We already have classes that tend to teach to the lowest common denominator, let's not have funding on the same principle. If Turlock feels more funding is needed in language arts and less in music let them spend their funds to support this, if Capistrano wants higher math scores and less funding for language arts let them spend their money how that community sees best for its students and its needs.

With the placing of Propositions 1A-F on the ballot the Governor and Legislature have shown the California people they have no clue how broken the system is, what is very scary is they have shown the people they have no clue how to fix the system either. The only way to force it to be fixed is to break it further--and the start to the fix must be returning control of funds for education to the local school boards, to the communities that paid the taxes should go the control on how they are spent. Take control away from the special interests in Sacramento and bring it back to parents and communities.