California Budget Delays Continue

GLORIA PENNER (Host): Gentlemen, let's turn our attention to another topic, the state's $26 billion budget gap. The Legislature and the governor have been working on this for months - at least we think they've been working on it - and now it looks as though we should have a budget by now. But everything came to a screeching halt yesterday. John, let me start with you. Why are things stopped in Sacramento? JOHN WARREN (San Diego Voice & Viewpoint): Well, we're told that things are stopped because the people who are concerned about the future of education and having that $11 billion repaid wanted written assurance. The governors saying I'll give you a verbal one but if you want something written you have to go back to the people for it initiative. And so we're now at a back and forth with an item that never was a real issue before now in terms of discussion. It's strange that you're hearing this from education interests as opposed to concerns about social services and medicare, or what we're doing for the elderly, or what's happening in terms of childcare. None of them want assurance. None of these issues are coming up right now, its just this item and I think that we're going to have to move beyond this item real quick. PENNER: But considering the history of our legislature, and such tough things that they need to agree on, what are the chances of really going to come to any kind of agreement? MICHAEL SMOLENS (San Diego Union-Tribune): I think that they have to, the situation is so darn, we're losing $25 million a day everyday they go on without a balanced budget. We're issuing IOUs by the hundreds of millions, and as we know now that a lot of people, vendors for the state can't cash those, banks aren't accepting them. We're reaching critical mass, and the irony is that they seem to be on the same page finally on the budget cuts which are going to be hugely painful to education and particularly social services, as John mentioned. But now they're hung up sort of on this guarantee on how they repay, not whether they'll repay but how they repay schools. And I think they'll have to get over that because the longer it drags on on that notion, and the more hurt the state feels, its bond rating is plummeting by the day, it seems like that they finally will come to an agreement. But its not going to be a good one, its not going to bring any joy to anybody. PENNER: Those are the key words that Michael used John "hung up." Why do we keep having these problems balancing the state budget? What's wrong with California? WARREN: Because California is a state thats philosophically divided. You have the Republicans on the one side, conservatives who feel there should be no increases in taxes, that people are getting too much in terms of social services, we do too much for immigrants or illegals. Here you have a Democratic component thats concerned about a safety net and people being cared for, many of them in the final stages of life, and there's not a meeting of the two minds. And so as long as we have this scenario, without the people who are most affected being voters or campaign contributors, as opposed to the special interests and the money on the other side, we will continue to have this philosophical divide. PENNER: Okay, so this is what we know is on the chopping block now: the universities, raising tuitions, furlowing employees, cities and counties, their budgets in danger of being raided. IOUs might even go to state employees instead of real money. What's next on the chopping block? SMOLENS: Well, you know we mentioned social services, the welfare system, the Welfare to Work system is going to take a huge hit. How much is still a little unclear. And home support services. And all these things that are sort of like the last chance for a lot of people. Education gets all the attention, or a lot of attention, and rightly so - it's big - but a lot of people at the bottom rungs of the economy are really going to be hurt by this.