Editorials from around the state
November 12, 2008
It took state lawmakers more than three months past their July 1 deadline to finally work out a budget deal this year. Now, just weeks later, it turns out that stinky budget plan wasn’t enough to solve the budget crisis.State lawmakers are back in Sacramento for an emergency session to figure out how to cope with an $11.2 billion deficit. They face the unpleasant task of evaluating the governor’s cut-and-tax plan that is sure to anger nearly every Californian.Last week, Gov. Arnold Schwarzenegger said that we must “stop the bleeding” and then unveiled $4.7 billion in tax hikes. That money would come from increasing the state’s sales tax … and by increasing the services that get taxed, such as golf fees and veterinary bills. Because of the passage of Measure R, the local transportation sales tax, this would mean a 10.5 percent sales tax on Angelenos the highest in the state and one of the highest in the nation.Schwarzenegger’s plan is terrible, to be sure. Levying more taxes when the public is being hit financially on all sides could make the state’s financial situation even worse. The less money people have, the less they buy and spend on things such as golf fees and vet bills. In turn the state gets less tax revenue. It’s a bad cycle.Legislators tried in September to defer the budget problems to another year when perhaps the picture would be brighter. That plan fell apart when the national economy started seriously slipping.What’s more, the years of bad financial decisions and building up of government over spending that created this financial fiasco aren’t fixable in one emergency session. There are fundamental problems with the state’s spending and taxing methodology. It has spread the tax burdens out unfairly and encumbered so much of the state’s revenues on generous pay, perks and benefits from everyone in the employ of the state up to the legislators themselves. That won’t change until the culture in Sacramento changes. …___
So much for California’s “year of education”: Instead of wide-ranging education reforms, 2008 limped toward a close last week with the governor proposing to slash $2.5 billion from school budgets. But the state’s dire financial straits should be spurring changes in the school system, not postponing reform.California’s economic woes make a necessity of efficiency. The state can no longer afford an ineffective and often irrational system of school financing.Gov. Schwarzenegger last week proposed to trim $2.5 billion from education spending as part of his strategy for plugging the $11.2 billion gap in the current state budget. The governor also proposes to allow districts to shift funds earmarked for specific education programs to classrooms, to keep instruction functioning.Whether that will free up sufficient money to offset the proposed cuts is unclear, nor is there any certainty that legislators will go along with the governor’s plans. Still, giving districts more flexibility to use education money to meet local needs is a sound idea.But that step is only a beginning. The state needs substantial reform of its school finance system. State-commissioned academic studies of California’s school system, released in 2007, portrayed a system of school finance that is centrally controlled, irrational, inequitable and nearly incomprehensible.A state in severe budget trouble should be demanding a system that uses that money as efficiently as possible, however. A report last month by Policy Analysis for California Education, a research consortium of UC Berkeley, UCLA and Stanford University, offers some sensible guidelines for a more coherent state funding system.The recommendations include the governor’s idea of freeing up earmarked funds. About 25 to 30 percent of the money school districts receive under the state’s education funding guarantee is restricted to specific programs, such as special education.Dictating spending from Sacramento, regardless of whether the money serves any local need, makes little sense. The state’s legislative analyst has argued for more than a decade that the state should give local districts more flexibility to use the earmarked funds to meet local priorities.But the system largely overlooks local education conditions, anyway. The complex formulas that determine funding do give some districts more money, but often not for reasons tied to instruction. The state should focus school resources, including money, on the areas of greatest need, not spread them around haphazardly.And school finances have become so convoluted that most taxpayers have little understanding of education budgets. But making rational decisions about school spending requires a knowledge of the probable consequences. Otherwise, any choices are just blind guesses.The state could fix those deficiencies without a huge infusion of new education money. And a state facing huge deficits has no justification for avoiding reforms that promise better use of scarce public funds.___
Gov. Schwarzenegger has grasped a fundamental fact: Unless California boldly addresses the root cause of the problem, rising home foreclosures, the economy and state revenues will continue their downward spiral.As part of the emergency special session he called last week, Schwarzenegger has proposed immediate foreclosure relief and long-term mortgage reform. As David Crane, the governor’s special adviser for jobs and economic growth, said Wednesday, to protect the California economy, the state needs to keep more people in their homes.So the administration has crafted a proposal to encourage lenders to do more loan modifications.The key element is a 90-day stay on foreclosures unless loan servicers adopt a “robust modification program” similar to the one pioneered by the Federal Deposit Insurance Corp. after it took over California-based IndyMac Bank. … This model is a good starting point …But the proposal has serious weaknesses that legislators will have to remedy:If servicers don’t follow through on their modification programs, there’s no accountability. The plan has no public reporting of loan modifications by specific servicers. Legislators should insist that any loan servicer that wants to avoid the 90-day stay on foreclosures must provide information on loan modifications that will be publicly reported.Only through sunshine can the public see which servicers are actually doing the needed loan modifications. This requirement should apply equally to all servicers sending out notices of default in California, whether licensed by the state or federal government, because regulating foreclosures is the province of the states. There is no federal foreclosure law.The governor’s plan does nothing for borrowers not yet late in their payments. This provides a perverse incentive for people to skip payments.Legislators should insist that the plan include borrowers with adjustable-rate loans who could soon fall behind in payments when rates reset, as well as those who are making only minimum payments that increase (rather than decrease) their loan balance over time. JPMorgan Chase andamp; Co. already has announced it will do this.Until the state addresses rising home foreclosures, the revenue bleeding will continue and the state’s budget mess will continue to get worse. No one should doubt the need to act during the special session.___Nov. 9The Santa Rosa Press Democrat: “State of Chaos”There will be no faking it this time.No more gimmicks. No more bogus projections on revenue. No more “borrowing” from future revenue such as lottery funds.This time, California’s leaders will need to agree quickly on a budget-balancing proposal that’s painfully authentic or face the very real prospect of seeing the state run out of money in February and having its credit rating crash.Gov. Arnold Schwarzenegger at least shows he understands the gravity of the situation with his appeal last week for a 1.5-cent sales tax increase — as well as new taxes on alcohol and oil production to help bridge a projected $11.2 billion budget deficit for the fiscal year ending June 30. If nothing is done, that deficit over the next 20 months will grow to $24 billion.The sales tax increase seems far-fetched given that his appeal for a 1-cent increase in August did not get so much as a single vote of support from fellow Republicans.But it’s different this time. Or at least it should be.Some legislators seemed to be under the misguided hope in August that the state’s economy was on the verge of a recovery. They could just stall for time. But as the Legislature convenes a special session to deal with the deficit, few have such blue sky projections anymore.”In the six weeks since I signed our last budget, the mortgage crisis has deepened, unemployment has increased and the stock market has lost almost 20 percent of its value,” Schwarzenegger noted last week. “We have drastic problems that require drastic and immediate action we must stop the bleeding right now.”The governor’s plan this time also makes more sense because it is balanced with $4.5 billion in spending reductions including a $2.5 billion cut in K-12 funding and for community colleges. The governor also proposes a one-day-a-month unpaid furlough for state workers for the next 19 months and is calling to rescind two of state workers’ 13 paid holidays Columbus Day and Lincoln’s Birthday.In short, there’s something here for everyone to hate and they will.But the fact remains that this problem is not going to go away no matter how much the governor is criticized and California’s political parties are polarized.The details of this plan can be improved, but what the governor has right is his sense of urgency and his appeal for “drastic action.”There is no other way out this time.___
Fisheries off the coast of California, like fisheries around the world, have been battling collapse for years.Lax regulations, wasteful practices, a growing global appetite for fish and increased competition among fishermen for the few fish that remain all of these things contributed to the federal government’s decision, in 2000, to formally declare the fisheries stretching from Morro Bay on the central coast all the way up to Washington state’s Puget Sound an “economic disaster.”The ensuing attempts to restrict the catch frustrated fishermen, but did little to help the fish recover.So kudos to the Pacific Fishery Management Council for deciding that it’s time to try something radically new and different.In a unanimous vote last week, the council decided to implement the model that’s turned around Alaskan fisheries. It requires fishermen to share the catch, not compete for it.A recent study in the journal Science suggested that a fishery can be saved when fishermen are given a guaranteed share of the catch. The study suggested that shared stakes worked better than other restrictions, including overall restrictions on the catch and seasonal limits.The method’s worked in Alaska, by far the country’s biggest source for fish (over 5 billion pounds caught annually). There, fishermen self-police, abiding by annual catch limits determined by scientists and sharing the profits. Alaska’s fisheries are considered some of the world’s best-managed, and most of them are certified as sustainable. It’s an impressive record that we’d do well to copy here.Of course, here we would have to have more than self-policing, because some fishing groups are already hopping mad, calling the council’s plan “sharecropping.”Well. It’s only sharecropping if there’s a plantation to work on, and the status quo is going to wipe all of us out environmentalists, fishermen and fish-lovers alike. It’s true that the fishing industry will probably contract under this new plan: typically the industry consolidates under catch-share programs, as some fishermen sell their quotas and cash out of the business. But every fishing group would be wise to support the change, because a contracted industry beats a collapsed industry any day.
It’s a bittersweet day for the newsroom of the Times-Standard with the news that our competitor down the street, after five hard years of valiant competition on both sides, is closing its doors.The Eureka Reporter’s last edition on Saturday (Nov. 8) will mark the end of Humboldt County’s 21st century newspaper war. This community became one of the last of its size in the nation to enjoy what was once a regular occurrence two dailies battling it out on their editorial pages.A community can only benefit from having many sources of information and when individuals are given more opportunities to express their views.Newspapers have come and gone in the 150-year history of the Times-Standard and its predecessors, but the Eureka Reporter was a special case. Over the years, they turned a young and eager staff of new college journalism graduates into a scrappy crew of veterans that gave this newspaper a run for its money.Make no mistake: The Eureka Reporter’s presence in the North Coast media market did wonders for improving the coverage of this newspaper. It forced us as an entity to re-examine what we were doing, and to improve across the board.Now Humboldt County is joining many other communities across the nation that have lost a newspaper during these tough economic times when even the giants of the journalism world are ceasing publication.It is the end of era.