Thursday, June 11, 2009

State Budget Rumors

Here's a couple of rumors and scuttlebutt that I've pick up over the last few days. I can't confirm the accuracy or reveal the sources of these rumors, but they come from very good sources that I trust:

The Governator's recent decision to cancel unfilled contracts was done without consulting with the Department of Finance or the Department of General Services, and caught them completely off guard. (In fact, many directors learned of the decision from the media, not through normal briefing channels.) Great line from the Bee article: "Officials said they don't yet know how much money the state will save, because contract data are still coming in from the state's 150 or so departments." Translation: "We had no idea this was happening until your reporter called our PIO, but since we serve at the will of the Governator, we'll cover his ass while we figure this out."

In a similar vein, there are no contingency plans in place in case the Governator carries out this morning's threat to shut down state government if no budget is forthcoming. (The rumor monkey has it that this remark was completely off the cuff, and represents a major departure from his own team's "cooperative but firm" stance during recent emergency budget negotiations.) State agency leaders are scrambling at this hour to try and form emergency shutdown teams to deal with the threat, while at the same time begging for guidance from the Governator's office. Since no time frame was hinted at, the 50-day money clock discussed in the recent controller's letter is being used. However, with several budget deadlines fast approaching, nobody is really sure what will happen, or when.

Max's Take: These two issues represent a major breakdown of communications, both within the Executive Branch and the Governator's own team. California is in the grips of an acute, dynamic crisis, and clear and consistent leadership is required to deal with it properly. As the crisis unfolds, the Governator's office needs to have a daily briefing with agency leadership to keep them updated. It would also be wise for the Governator himself to hold a daily press conference to answer the hard questions and announce policy on the record. It is improper to govern through the editorial board of the LA Times. If Arnold won't take this crisis seriously, nobody will.

12 comments :

PeonInChief said...

No, this is yet another example of the Gov's entire ignorance with respect the the way the state government works. (Yes, I know he's been the Governor for six years.) You will recall that when he threatened to pay all state workers minimum wage, the controller pointed out that it takes months to change the codes that would enable that. Further most state workers have a large number of deductions for health care, retirement etc. The state would have to pay those separately, or many state workers would receive a paycheck with a negative number.

Max said...

the Gov's entire ignorance with respect the the way the state government works.

Yeah, but governing through the media is never a good strategy. He has a staff. They have phones. How hard is it to make a call?

This is a man who makes a living through communicating. (Movies, politics, etc.) He should be able to figure this out.

Anonymous said...

Who cares about daily media briefings? These folks need to get to work and cut some expenditures now.

Took a quick look at the CA budget online. The CA model is starting to look a lot like Detroit auto makers, lots of 50 year old "ish" retirees requiring higher CAPERS contributions, non working income recepients (ss and welfare), a highly paid staff of a few hundred thousand state workers making $67K average + benes, being supported by a shrinking income stream (shrinking personal income tax and corporate tax mostly)

Don't really see in income side getting better for a few years and increasing tax rates would just slow it down by further decreasing or crippling personal consumption rates, the driver of the economy.

Sippn

On another note, my incoming US mail at the business is continuing to get unreliable and slow. The carrier told me yesterday that they are now getting large trays of mail only on Mondays and very little throughout the week. Mail being sorted centrally at West Sac instead of the local PO. May as well switch to 1-3x weekly at this level of service. Have they heard about email? Its like newspapers are just discovering the internet.


Hey, lets outsource the DMV. What do we really have to loose?


Sippn, again

Max said...

Who cares about daily media briefings? These folks need to get to work and cut some expenditures now.

I agree, the more serious problem is the lack of internal communication. Inside the bubble, sometimes it's hard to understand just how little the general public actually cares about state government.

However, other than complaining about state employee salaries and voting for every spending proposition on the ballot, the general public could give a shit. Maybe a daily reality briefing is just what the doctor ordered. "Sorry guys, those bullet trains don't come for free. If you want one, you have to cut the Food for Pregnant War Widows program."

Anonymous said...

Peon, you bring up a great point that the benes received by state workers is larger than minimum wage - pretty stunning.

67K per year average wage - a real brass ring for many.

There is no industry that can support higly paid early retiring workers for more than a few decades - its a 1950s myth.

patient renter said...

"Sorry guys, those bullet trains don't come for free. If you want one, you have to cut the Food for Pregnant War Widows program."

Yea, I like the idea of daily briefings, or any regular briefings so long as the man is straight with the people, ala your comment. When voters have the power to vote themselves fancy gifts, someone needs to remind them that such things come at a real cost that must be offset elsewhere. It is clear that voters, legislators, public worker unions, nearly everyone could use a daily reminder that money does not grow on trees.

patient renter said...

I was thinking, maybe the Governator acted without consulting other State agencies because they move too slow for him and he didn't want to have to wait forever for a reply? I know that's a sorry excuse, and it's just an idea.

Max said...

I was thinking, maybe the Governator acted without consulting other State agencies because they move too slow for him and he didn't want to have to wait forever for a reply?

That might be true for the constitutional offices (state, controller, doj etc), but everybody else works for him directly. Keeping his employees up to speed is just common sense; it's what all good executives do.

PeonInChief said...

Anonymous--

What I was talking about were health care co-pays, pension payments, parking payments and the like. This is money taken from paychecks to pay for those benefits.

patient renter said...

What's new Max? You on vacation?

Max said...

Nothing worth reporting on. The guv has stopped making off the cuff policy decisions for the time being, so state agencies are catching their breath. I personally think they're playing for a behind-the-scenes bailout from the Feds. The dems are trying to figure out what the bailout conditions are so they can cut as little as possible. The counter-proposals out of the ledge aren't even close to enough, so my only guess is they're stalling for time.

Remember, the guv could order a shutdown at any time. Everyone's playing for the end of July, but I bet he orders a partial shutdown on July 1, just after state worker payday. He can't wait for every dollar to be spent before he starts taking action.

Max said...

Also, I've been having trouble with posts not displaying properly in Firefox and Chrome. If you hit reload, that should help.

Either that, or subscribe to the RSS feed. I recommend Sage Too