Privies pinched without budget deal

Capitol Journal

This is how much budget trouble the state of California is in: It’s about to run out of toilet paper in its rural parks.

California’s red ink budget is immensely complicated because of voter-approved ballot initiatives, federal rules and court decisions. But this internal e-mail within Gov. Arnold Schwarzenegger’s Finance Department is plenty simple:

“Bottom line: Remote rural state parks will likely run out of toilet paper by early October.”

Pressing a deadline, I was unable to dig deep enough to learn precisely which parks, let alone privies…


I did learn that the problem involves banks canceling a state credit card for lack of payment. The card is used to buy toilet paper and other supplies. And it won’t be reinstated until the governor and Legislature enact a state budget and card payments are renewed.

On Friday, the Capitol politicians will break a record for procrastinating 85 days into the new fiscal year without enacting a spending program.

Urban state parks “should be OK for a while,” the administration’s internal e-mail says. That’s because they benefit from the state’s bulk purchasing in high-population areas.

Coincidentally — or perhaps justly — the paper-short rural parks are located mostly in the districts of Republican legislators, who make a career of demanding spending cuts and voting against budgets.

But, come on! Budget or not, the state should be capable of keeping all of its parks supplied with an essential of civilization.

That, of course, is just one of the state’s breakdowns absent a budget.

Thousands of business vendors who supply the state and provide services haven’t been paid since July 1, the start of the fiscal year. They’re getting by on personal savings and outside loans.

“They’re the same ones who get screwed every year” a budget is late, says Hallye Jordan, communications director for Democratic state Controller John Chiang. “They’re the guys who take care of state printers, deliver food to prisons, run rural health clinics.”

They’re also landlords. The state has been stiffing owners of buildings or office space it leases. Without a budget, there’s no appropriation for the lease payments.

Ironically, this comes at a time when one of the expected budget-balancing solutions will be to sell state buildings — picking up $1.2billion in cash — and lease back the space. But the state is a proven lousy tenant, habitually delinquent on its rent.

Without a budget — or perhaps even with one — the state may be forced to again issue IOUs by late October. That would be a godsend for late-night comics. And wonderful timing: just before election day.

An administration internal memo cautions that if another month goes by without a budget, it will be “very challenging” for Caltrans to make “timely” payments to contractors and vendors on current highway projects. Already, the memo says, “a growing number of projects” scheduled to begin this year are being delayed.

In fact, if a budget isn’t enacted soon, the state won’t be able to sell construction bonds until at least January, says Democratic Treasurer Bill Lockyer. “It’s got to be done in the next couple of weeks at the outside,” he warns.

“We’re getting to the point where public works jobs are going to be shut down again in January.” The last shutdown was in January 2009.

Lockyer, a former Senate leader, says the Legislature should just cut state general fund spending across the board by enough to make ends meet. Give up trying to compromise. It’s too late in the game.

That makes sense. Cutting across the board would be bad policy. But it’s better policy than still having no budget in October.

Schwarzenegger also should give up trying to trade his signature on a budget for major pension, budget and tax reforms. He has had his crack at those reforms. Time to move on.

“It’s not smart budgeting,” Lockyer says of across-the-board cuts. “But it does reflect the fact that arguably there’s 10% waste everywhere in any human activity.

“Across the board means not prioritizing. But when the budget is education, healthcare and prisons, how do you prioritize?”

If Proposition 25 had been law, there would have been a budget three months ago. That measure on the November ballot would reduce the legislative vote requirement for budget passage from a two-thirds majority to a simple majority. It also would permanently strip legislators of their pay for each day a budget wasn’t passed on time.

But unless Schwarzenegger and this Legislature are so stubborn and inept that they never pass a budget and leave the mess for the next crew to clean up, they’ll need a two-thirds vote. That means some Republican supporters. And they won’t be voting for anything called a tax increase.

Schwarzenegger and legislative leaders have been negotiating in Los Angeles. The governor, after his weeklong Asian trip, has been too sick to fly to Sacramento.

They’re trying to close a $19-billion deficit.

The framework of a deal, according to insiders, involves about $8 billion in spending cuts, delaying a business tax break worth $1.2billion (net operating loss carryover), selling state assets and another load of gimmicks galore.

“This is the most frustrating thing I’ve ever been through,” says Senate leader Darrell Steinberg (D-Sacramento). “It’s even worse than last year, when there was a great sense of urgency. This year, I don’t think anybody has felt that....

“You can cut only so deep before you hurt the economy and the people. Then you bridge to a fresh start in January.”

But restock the toilet paper now.