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IOUs? Yes, you owe us

As the governor and Legislature continue their fuss-budgeting, California enters its new fiscal year with no cash in hand.

July 02, 2009

The message of the failed May 19 special election appears to have been received by pretty much no one in Sacramento. Fuss-budgeting went on, deadlines notwithstanding, as if it were still August or December 2008. The result: California entered its new fiscal year with no cash in hand and a growing multibillion-dollar deficit.

Assembly Speaker Karen Bass (D-Los Angeles) and Senate President Pro Tem Darrell Steinberg (D-Sacramento) ran through their drills Tuesday, insisting on voting, and voting again, on deficit-closing plans they knew Gov. Arnold Schwarzenegger would veto. We shrugged at the first vote; after all, the plan included tobacco and oil taxes that this page supported. But it quickly became clear that those taxes would go nowhere, so additional votes on doomed packages were simply part of what the governor is fond of calling "the kabuki."

Was Schwarzenegger being the grown-up? Hardly. He too played a tired Sacramento game: deadline policymaking. As the government was counting down the final hours of budget dickering before running out of cash and preparing to issue costly IOUs in lieu of actual legal tender, and as California's budget hole was about to get $3 billion deeper (because missing the deadline meant a new school-funding mandate kicked in), he tossed this little nugget to the Legislature: I'll sign a budget and put the state back on track if you ... uh, let me think ... I've got it -- if you reform the pension system.

It's a badly needed reform, but in trotting it out as a brand-new, never-before-proposed ultimatum in the waning hours of the fiscal year, the governor didn't simply thumb his nose at Democrats. He thumbed his nose at the entire notion of public lawmaking. It's the same process that makes a mockery of democracy at the end of each session, when bills are gutted and new laws, which were never heard in committee or discussed in public, slink their way onto the books.

But, some veteran Sacramento watchers object, throwing away money and blaming the other side for it is the only way to get things done. That's another way of saying that abusing Californians is the only way to serve them.

Democrats and the governor, and the Republican lawmakers who take pride in never voting in favor of any budget, have set us on a road toward two possible cataclysms: a popular revolt that will further diminish the power of government as we know it, and ruinous default that keeps the recession alive for another decade and plunges Californians, and perhaps all Americans, into nearly unimaginable misery. Sacramento players should check their rearview mirrors. Both objects are closer than they appear.

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