California stops lawmakers' wages

godtabh

California stops lawmakers' wages

lected representatives in California have been told their wages and expenses have been stopped and they will not be paid until the state budget balances.

State Controller John Chiang took the step after determining that the budget approved last week was not balanced.

It is the first time a law brought in last year, to stop California constantly missing its annual budget deadline, has been brought into effect.

Mr Chiang's decision sparked sharp criticism from legislators.

'Questionable manoeuvres'
It is often said if the state of California was a country it would be the eighth biggest economy in the world.

But with a $10bn deficit to match, and residents fed up of legislators missing the annual budget deadline by months, they voted for a new law.

It is the first time Proposition 25 has been put into effect - and it means all 120 elected members of the State Assembly and Senate will not be paid their wages, or their living allowances, until they pass a balanced budget.

There was obvious uproar from the legislators.

Last week, for only the second time in 20 years, they actually passed a budget on time - only for it to be vetoed by Governor Jerry Brown.

He said it contained "questionable manoeuvres" to cover up the real figures and would increase, rather than reduce the state deficit.

It was an opinion shared by Mr Chiang, who declared it "miscalculated, miscounted or unfinished" and $1.8bn short.

So the financial pressure is on for Californian Republicans and Democrats to compromise.

The issue is one which resonates across the US, and in many parts of the Western world - the ideological question of spending cuts versus tax increases.

Mr Brown has cut spending in the state, but he wants tax increases.

Legislators are critical of the decision and talk of a legal challenge, but minds may be more malleable when the pain is felt in their pockets.

I thought this was interesting. Not a chance of it happening in Ireland but if it was I think it would focus the minds alot more on what is best for the country and not what is the easiest way to line the pockets of elected members.

Nijmegen

Not possible in Ireland because citizens can't pass ballot measures. Collect enough signatures and anything can be put to a vote.

That is democracy.

Cookie_Monster

That's a great idea, finally making the powers that be actually do something about a deficit.

I really don't understand why anywhere is allowed to run such deficits in the first place anyway. A balanced budget is the most basic of financial things.

godtabh

Cookie_Monster wrote: »

That's a great idea, finally making the powers that be actually do something about a deficit.

I really don't understand why anywhere is allowed to run such deficits in the first place anyway. A balanced budget is the most basic of financial things.

That's the problem we have when un qualified people make un qualified decisions regardless of the best advice available is (both internal and external to the government).

Cookie_Monster

godtabh wrote: »

That's the problem we have when un qualified people make un qualified decisions regardless of the best advice available is (both internal and external to the government).

True.

It'd be nice to see it written into law though that deficits are not allowed, or only a certain percent in emergencies.

Kind of like a version of the EU 3% rule that actually works.

godtabh

Cookie_Monster wrote: »

True.

It'd be nice to see it written into law though that deficits are not allowed, or only a certain percent in emergencies.

Kind of like a version of the EU 3% rule that actually works.

thats actually a very good idea.

in that way unsustainable spending (in any form) to win elections cant happen in the future

Nody

godtabh wrote: »

thats actually a very good idea.

in that way unsustainable spending (in any form) to win elections cant happen in the future

Look up how Greece joined the euro zone on why this will always happen...

nesf

Nijmegen wrote: »

Not possible in Ireland because citizens can't pass ballot measures. Collect enough signatures and anything can be put to a vote.

That is democracy.

It's a really bad idea though because you get things like happened in California with people voting for higher spending while voting for lower taxes or freezing taxes at a certain level.

It just doesn't work if people have control of budgetary measures because 99% of us love higher spending while loving lower taxes and if you don't have to balance the budget you don't get why you can't have both.

thebman

nesf wrote: »

It's a really bad idea though because you get things like happened in California with people voting for higher spending while voting for lower taxes or freezing taxes at a certain level.

It just doesn't work if people have control of budgetary measures because 99% of us love higher spending while loving lower taxes and if you don't have to balance the budget you don't get why you can't have both.

But we have that anyway because we let salesmen politicians run the country that will tell whatever lie they have to in order to get elected then try to enact enough of his daydream policies to get re-elected next time.

What we really need I think is legislation that forces a balanced budget except in times when the government declares a financial state of emergency and the Taoiseach should have to address the nation to explain why we are in a state of financial emergency and how long it will take to get out.

I think making politicians harm their own popularity when they run deficits is the only way you can force them to make an attempt at a balanced budget.

godtabh

Nody wrote: »

Look up how Greece joined the euro zone on why this will always happen...

wasnt that corruption? I dont thin Greece made any attempt to balance the books in any way (until now!)

Einhard

Nijmegen wrote: »

Not possible in Ireland because citizens can't pass ballot measures. Collect enough signatures and anything can be put to a vote.

That is democracy.

The problem with that though, is that many of California's fiscal difficulties have been caused by such direct propositions limiting taxes and other revenue raising measures. It's all very well to cheer this move to the rafters, but one can't ignore the negative consequences of such actions.

Einhard

Cookie_Monster wrote: »

That's a great idea, finally making the powers that be actually do something about a deficit.

I really don't understand why anywhere is allowed to run such deficits in the first place anyway. A balanced budget is the most basic of financial things.

godtabh wrote: »

thats actually a very good idea.

in that way unsustainable spending (in any form) to win elections cant happen in the future

I don't think that prohibiting deficits altogether is necessarily a good thing. Borrowing can be very beneficial for an economy. Also, it should be noted that such a measure wouldn't have impacted at all on the runaway spending of the first half of the last decade.

Having said that though, a law limiting deficit spending would be a positive step. Perhaps, as has been said, something like the EU 3%, with the novel addition of enforcement, or even something like the new UEFA Fair Play rules, limiting deficit to a certain % of GDP over several years. Would bring stability, whilst also allowing nations to borrow to fund sustainable infrastructure and the like.

nesf

thebman wrote: »

But we have that anyway because we let salesmen politicians run the country that will tell whatever lie they have to in order to get elected then try to enact enough of his daydream policies to get re-elected next time.

What we really need I think is legislation that forces a balanced budget except in times when the government declares a financial state of emergency and the Taoiseach should have to address the nation to explain why we are in a state of financial emergency and how long it will take to get out.

I think making politicians harm their own popularity when they run deficits is the only way you can force them to make an attempt at a balanced budget.

But ideally we want to run surpluses in good times to save up for the bad times. We don't want balanced budgets in good times.

thebman

nesf wrote: »

But ideally we want to run surpluses in good times to save up for the bad times. We don't want balanced budgets in good times.

Yes but the budget still ends up balanced usually with surpluses as the surplus money is directed into investments to get a return so its value doesn't wiped out by inflation much like the NPRF.

Sierra Oscar

Sounds dangerous to me. So the state controller can basically blackmail the elected legislature into passing certain acts?

Nijmegen

To those saying ballot measures are a bad thing: Democracy is ok, so long as we elect people who will go against people's wishes when they're in?

California would be in a better budgetary position if the politicians followed up such ballot measures with accountable policies, like taking on vested interests in unions that have much the same relationship with the state as we do ours. The balanced budget amendment is a move by citizens to force this.

The idea that ballot measures by citizens is a bad idea says that democracy is a bad idea, and ought to be limited.

I've been in small districts in the US where citizens, for example, raise a levy for a year or two on restaurant covers or hotel stays to pay for specific local projects, like building a new school.

Democracy is a process, not an outcome.

Einhard

Nijmegen wrote: »

To those saying ballot measures are a bad thing: Democracy is ok, so long as we elect people who will go against people's wishes when they're in?

No, we're saying that there has to be a balance in democracy between barely representative oligarchies and Athenian style direct participation. There seems to be this blind acceptance that the more pure democracy is, the better. I don't think that's necessarily true. Too much democracy can be a bad thing, as much as too little democracy can be. And it's hard to argue that the various direct ballots enacted by the Californian electorate have not exacerbated the fiscal situation in that state.

California would be in a better budgetary position if the politicians followed up such ballot measures with accountable policies, like taking on vested interests in unions that have much the same relationship with the state as we do ours. The balanced budget amendment is a move by citizens to force this.

Yes, it would. But you still cannot argue that California would be in a better budgetary position if the citizens hadn't foisted such provisions on the the state in the first place.

The idea that ballot measures by citizens is a bad idea says that democracy is a bad idea, and ought to be limited.

No it doesn't say that democracy is a bad idea. It says that direct democracy can be a bad idea. Would you state that Athenian style democracy (if technically feasible) would be the best form of democracy in a modern state? If not, are you stating that democracy is a bad idea? Of course not!

Manic Moran

Sierra Oscar wrote: »

Sounds dangerous to me. So the state controller can basically blackmail the elected legislature into passing certain acts?

No, the budget has to actually not balance. Otherwise he can be overruled by legal challenge. The CA budget process has been filled with handwaving and assumptions such as "We will get $Xbillion in Federal Aid" when there's nothing to say we won't actually get $X/2Bn". The talking heads on the media are working out about a $2bn 'real world' shortfall in the budget that passed.

Actually, I voted against this measure. I'm all for the holding of pay until a budget is passed, but it was accompanied (in the fine print) by a reduction in the amount of votes needed to pass the budget in the first place (which is why it was the first budget to be passed 'on time' in decades).

But you still cannot argue that California would be in a better budgetary position if the citizens hadn't foisted such provisions on the the state in the first place.

True, but it is also possible to overstate the issue. Most expenses are not mandated by ballot measure, but by political clout. An excellent example is the teachers' union, the CTA is probably the most powerful single group in the State, and sure enough, I was hit this morning by several adverts on the radio by them about the budget urging us to call our politicians and encourage expenditure in education in the new budget. The financial measures which are put to the voter more often than not are those requesting or denying new taxes, not ones mandating new expenses. Usually those mandating expenses are directly linked to a tax increase in the same proposition.

It is also unfair to say that Californians never vote in favour of raising taxes. We are very cautious about large raises, or raises which are inspecific as to what exactly it's going to go towards. That's why tax increases are a little more common at the lower levels than at State level. "Raise X tax to add to the California General Fund" is likely going to fail. "Raise sales tax 1/4% with the money going (by law) to the BART public transport extension in Santa Clara County" did pass, as did "Raise Vehicle License Fee in Santa Clara County, the funds of which will go to road repair". (I lived in Santa Clara until a couple of months ago). "Raise the parcel tax on your home if you're in the Milpitas Unified School District with the money going specifically to the schools" passed with some 70% of the vote. As did another parcel tax raise for libraries in the North of the county.

We won't vote to give the politicians a blank cheque. I think California voters, when polled directly, tend to be fairly responsible. The problem occurs when the politicians, hammered from one lobby group for this expense, and another lobby group for that expense, instead of making difficult decisions to prioritise the one over the other and maybe lose some votes, just keep everyone happy and spend from the State's General Fund, then complain when the voters refuse to raise the tax to support what the politicians had passed.

NTM

thebman

Last week, for only the second time in 20 years, they actually passed a budget on time - only for it to be vetoed by Governor Jerry Brown.

Oh is that the same Jerry Brown of Dead Kennedy's fame:
http://www.azlyrics.com/lyrics/deadkennedys/californiauberalles.html

Manic Moran

thebman wrote: »

Oh is that the same Jerry Brown of Dead Kennedy's fame:
http://www.azlyrics.com/lyrics/deadkennedys/californiauberalles.html

Same guy, though I'm reluctant to say "of Dead Kennedys fame" as I'm unsure as to how famous that song is. This is Brown's second go around as Governor.

NTM

Sand

I think the problem with California's direct democracy is that a prized political skill is to reach a compromise which addresses everyones concerns.

However, in a system with direct democracy, the need for compromise is removed. Instead, you can simply ignore the usual legislative process and put your proposal to a direct vote where majority wins. This has an effect on the type of politicians that are elected - in a system where the ability to compromise and reach out is not required, fanaticial adherence to extreme positions becomes relatively more important.

And then you end up with a legislature which cant balance a budget because the prized skill of compromise is in short supply.