More Tough Times for State Budgets

California’s Governator is still locked in mortal battle with the legislature in Sacramento – Gov. Arnold Schwarzenegger even turned to bad theology the other day and said Cali is on the brink of “financial Armageddon.”

Gov. Kathleen Sebelius, Kansas, has her own budget cum legislature problem.  Media reports today say that the state of Kansas is out of money in the account which pays tax refunds and state employee pay.  Republicans in the Kansas state legislature blocked Sebelius’ attempt to move funds from other accounts today.

As a reminder, Ohio’s projected deficit problem is anywhere from $3 to 7 billion.

• Kansas suspends income tax refunds, may miss payroll – Wichita Eagle
• Sebelius, legislature tangle over budget – Topeka Capital-Journal
• Op-Ed, Dan Walters: No End in Sight on Budget Battle – Sacramento Bee
• California struggles to close deficit – New York Times

And You Think We’ve Got Budget Problems in Ohio?

Governator Says This Weekend Not Passing California’s Budget Will Be ‘Financial Armageddon’

If you’re interested in state government politics, check out what’s going on in California.  Gov. Arnold Schwarzenegger is only one Republican vote short of temporarily taking care of a $41 billion shortfall.  Ohio Gov. Ted Strickland’s potential $3 to 7 billion problem seems quite manageable in comparison.  In looking over some of the news from Cali tonight, here are some of the bullet points:

• California’s bond rating is crushed, the state is currently unable to borrow money
• Gas tax will be hiked 12 cents per gallon
• A 5% “surcharge” will be placed on many income tax bills (WTF?)
• Vehicle license fees to double
• Currently, most state employees are being furloughed two Fridays per month
• $15 billion in program cuts in budget
• $11 billion in borrowing in budget
• Plan to sell bonds against future lottery earnings (Note to Pari Sabety: Can we do this?)
• Unemployment is at a 15-year high in California
• The Arnold is so despondent he hasn’t groped a single staffer in two weeks

Obama Action Will Please Environmentalists, Peak Oil Advocates

Action that President Barack Obama will take Monday to allow California and other states to require stricter tailpipe emissions and automobile fuel efficiency standards shouldn’t just please environmentalists.

If you’re concerned about Peak Oil and the United States’ dependence on foreign oil, this is also a win for energy conservation. This could be a market force that Detroit cannot ignore, pushing fuel efficiency farther faster. Conservation isn’t everything, but for a society so totally unprepared, it’s one span in the bridge to the energy future.

The New York Times is reporting tonight that President Barack Obama will reverse Bush Administration environmental policy tomorrow and allow California and other states to mandate their stricter rules.

California Gov. Arnold Schwarzenegger had requested and been denied by the U.S. Environmental Protection Agency in 2007 a waiver to set California automobile emission standards higher than federal guidelines.  The Bush Administration told California and several other states that 2007 increases in federal fuel efficiency guidelines for cars and light trucks made their efforts moot and that a national patchwork of differing emissions laws would be untenable.

This is a win not only for environmentalists but also those concerned about the Peak Oil crisis and America’s continued over reliance on fossil fuels.  The stricter standards set by states will be a market force that the Big Three and other automakers will not be able to ignore.  According to the Times’ reporting, California’s action alone could have a great effect on fuel efficiency in the nation’s car and truck fleet:

The California law, which was originally meant to take effect in the 2009 model year, requires automakers to cut emissions by nearly a third by 2016, four years ahead of the federal timetable. The result would be an increase in fuel efficiency in the American car and light truck fleet to roughly 35 miles per gallon from the current average of 27.

In order to deal with the strategic, economic and societal changes which will brought on by a world where oil is harder to find and harder to extract, the U.S. and other nations will need to build bridges to the next energy economy.  Actions such as the one Obama will take on Monday will make it easier to build the “conservation” span of our nation’s bridge.

One question remains — will the Big Three automakers fight this in court? Probably, but they should be shamed out of the courthouse.  U.S. taxpayers are keeping two out of three of them afloat.  They should be discouraged from using our cash to fight our government …

Transcript: CA Gov. Arnold Schwarzenegger State of the State Address | California is in a State of Emergency | January 15, 2009

(Source: State of California, Office of the Governor) 12:14 PM PST, January 15, 2009

Official transcript of Gov. Arnold Schwarzenegger’s 2009 State of the State address

Thank you very much. Thank you. Thank you very much, Lt. Gov. Garamendi, for the nice introduction. Chief Justice George, President Pro Tem Steinberg, Speaker Bass, Senate Republican Leader Cogdill, Assembly Republican Leader Villines, members of the Legislature, ladies and gentlemen:

First of all, I want to congratulate the four that have been responsible for creating, really, the Martin Luther King holiday. So I want to say thank you because Martin Luther King has been a great hero who has given his life for justice and for equality and has been a great inspiration not only to Americans but to people all over the world. So congratulations to all of them. Let’s give them a hand, again, for the great work that they have done. (Applause)

Read more

State Governments Limp Into 2009

Ohio’s budget outlook is horrible, but in some states the road ahead is even more difficult.  Here are some clips from around the country and what’s going on in other state capitals.

• IN Governor Daniels to state workers: Skip Raises – Indianapolis Star
• In budget crises, states reluctantly halt road projects – New York Times
• Union sues Schwarzenegger over mandatory days off – Los Angeles Times
• Rhode Island has lost jobs 11 months in a row – Hartford Courant
• Governor says MI will get through tough times – Associated Press
• Hawaii budget plan taps rainy day fund – Honolulu Advertiser
• Corzine: No easy fix for financial woes in 2009 – Philadelphia Inquirer
• Across the board cuts in Iowa – Des Moines Register
• Layoffs in store for some Alabama state workers – Business Week

Unfortunately, there’s lots more.

Prediction: Schwarzenegger Runs for Senate as Democrat in 2012

I really found it hard to believe that the Governator came to Columbus, Ohio in the waning days of the presidential campaign to stump for John McCain.  After all, Gov. Arnold Schwarzenegger, R-CA, is often at odds with his own party and their wedge issues platform.

Democrats will be in trouble again if more Republicans talk – and act – like Schwarzenegger.  During a week where the dominant political story seemed to be all about how Republicans will climb back to relevance, Schwarzenegger spoke some truth to his party’s powerbrokers on ABC’s This Week with George Stephanopolous:

SCHWARZENEGGER: (…) Remember that so many times there’s dialogue about, you know, we have to go back to our core values.

What is that? What is core? How far does core go back in history in America, the word core? Does it go back 30 years? Does it go back 50 years? Because we know that Teddy Roosevelt talked about universal health care. So they’re off the core for a long time ago already. He has talked about protecting our environment. So they’ve been off for a long time on that.

I mean, let’s be honest. Ronald Reagan — let’s go to Eisenhower, for instance. Eisenhower has built the highway system in America and he’s poured billions of dollars into infrastructure. Where Republicans today say, well, that’s spending. We shouldn’t spend. That’s not spending. That’s investing in the future of America.

So there’s a lot of things that they have been off on, if they want to go and talk about the core values. But maybe their definition of core values is maybe different.

But I mean, so I think it’s all nonsense talk. I think if they just talk about one thing, what do we need now?

Now, America needs to be rebuilt, because we haven’t really rebuilt America for decades. So we need to rebuild America, fix the bridges, fix the highways, fix the buildings, tunnels and all of those kind of things we need to do. And then we have to go and create great relationships with our partners overseas, with the world, and to build those relationships again. And we have to take care of health care. We have to take care of our environment. And we have to build an energy future. Those are the things that people want right now.

Schwarzenegger also discussed his proposal for a 1 1/2 percent state sales tax in California to deal with the state’s projected $11 billion budget shortfall.  California, like Ohio, is dealing with the ill effects of the soon to be official U.S. recession – shortfalls in state revenue.  Rather than take the stance of the idealogue, Schwarzenegger is pragmatic about taxes:

STEPHANOPOULOS: You don’t want to do it.

SCHWARZENEGGER: I don’t want to do it. I hate taxes. I hate the word “taxes” and all of those things. But there’s certain times when you have to forget about the ideology, and, you know, all of this, and fix problems…

STEPHANOPOULOS: That is…

SCHWARZENEGGER: Because people want their fixed problems.

A look at just a few of the issues Schwarzenegger has taken the lead on in California over the past year shows a fairly progressive agenda: tearing down dams on the Klamath River, numerous alternative energy projects, school-based health centers, reform of the emergency medical care system and state infrastructure improvements.  Although far from being an endorsement, in the quote above, Schwarzenegger is the first Republican I’ve heard to evoke the memory of Teddy Roosevelt and the Rough Rider’s ruminations on universal healthcare for Americans.  Usually when contemporary Republicans speak of TR it’s bombastic and centered on their one-dimensional understanding of history and Roosevelt – “Bully” and “Gunboat Diplomacy” come to mind.  Schwarzenegger seems to understand that TR was a reformer and a progressive.

So, I am predicting today that the GOP has created a monster that will drive some of its stars to become Independents or Democrats.  Their party’s base has been given over to the social conservatives, culture warriors and theocrats.  Finally, most of the country seems to be rejecting this brand of conservatism and beginning to understand that every breath wasted on wedge issues while we’re mired in two wars and in a state of economic decline is foolishness.  The country which has set the standard and created the future is now getting left behind.

I’ll further refine the prediction by saying that in 2012 the Governator will be running for the U.S. Senate from California as an Independent or a Democrat. 

I think that Arnold’s water carrying for whichever Republican is running for president will be coming to an end.  He’s eventually got to realize that the dinosaur party needs him and his star power much more than he needs them.

Transcript: Gov. Arnold Schwarzenegger on ‘This Week with George Stephanopolous’ | November 16

(Source: CQ Transcriptswire)

SPEAKERS: GEORGE STEPHANOPOULOS, HOST

GOV. ARNOLD SCHWARZENEGGER, R-CALIF.

[*] STEPHANOPOULOS: Good morning and welcome to “This Week.”

Our exclusive headliner, Arnold Schwarzenegger.

(BEGIN VIDEO CLIP)

SCHWARZENEGGER: Good to see you.

(END VIDEO CLIP)

STEPHANOPOULOS: On more government bailouts for the economy.

(BEGIN VIDEO CLIP)

STEPHANOPOULOS: President Bush is resisting that. So are your Republican colleagues.

SCHWARZENEGGER: I don’t care about what anyone’s philosophy is. Read more

Just When I Start to Like The Arnold …

According to WOSU this a.m. Gov. Arnold Schwarzenegger of California is going to help McCain and Co. pull a play out of the Bush 2004 playbook – appear in Columbus, probably this Friday, with John McCain. The Los Angeles Times confirms. I wonder if Sarah Palin will be there. According to a website called the California Chronicle, the Governator’s endorsement of Palin is less than ringing.

What’s to like about Arnold? Mainly it is his forward thinking on energy policy and the promise of investing in a “green” economy. From afar, California appears to be years ahead of the rest of the country in the laws, policy and investment which will help the U.S. kick the foreign oil habit and clean up the environment. At times, it’s seemed downright refreshing to imagine Schwarzenegger as somewhat of a – well – maverick in Republican circles.

If Schwarzenegger cares about fostering the moderate or even progressive reputation he’s earned on some issues, appearing with McCain, a politician with policies rooted in the 1980s, seems a bit counter intuitive.