California is at the brink. It’s not just the $14 billion state deficit. It’s municipal and county governments similarly stressed, some near bankruptcy, but continuing to grant outsized pay and benefits increases. In some communities public sector safety employees are earning as much as $200k with overtime and retiring with pensions of 90% of their last years earnings. The prison workers union, one of the largest contributors to the Democratic party, fights against reform of the massively expensive Department of Corrections. The Republicans in Sacramento refuse to look at even the most basic fixes to the States revenue crisis like closing the outrageous yacht tax loophole.  Political candidates are spending up to $1m in legislative races and are beholden to contributors funding their campaigns. To say it is dysfunctional only begins to describe such a system.

The political divide in Sacramento seems unbridgable. There’s virtually no center ground. Most of the Republicans in the legislature have taken the Grover Norquist ‘no new tax’ pledge. The party’s right wing has driven nearly all remaining centrists out of office. The major Republican contributors: developers and big property owners, often under the guise of the Chamber of Commerce, have funded the purge. As long as they  maintain the 2/3 vote budget approval requirement and keep a Republican in the Governorship, they can maintain their grip. The Democratic side,  while somewhat more diverse and centrist, has its own special interest contributors with agendas. The party is eyeing 2010 as the year it will establish a 2/3 legislative majority and an ability to override any veto. Moreover, the Democratic majority will control the redistricting of California. The goal is to pick up 5 Congressional seats and a permanent 2/3 majority in the legislature. The Republican veto will be history. Even sensible Democrats have to ask if this sort of imbalance is healthy.

California’s golden period was 1958 – 1966. Pat Brown was Governor. A centrist Democrat and a balance of Democrats and Republicans in the legislature worked out compromises in a generally harmonious period of government. The State constructed an extensive highway system and infrastructure. The BART was launched. The University system was the envy of the nation. California was a leader in its efforts to protect the environment and the states natural beauty. The legislature took its first steps towards establishment of the Coastal Commission. All of these undertakings required broad based consensus.

The ideological cleavage began In the late sixties, in California as in the rest of the nation. In reaction to high taxes, and a court ordered redistribution of property tax revenues, a tax revolt took root. In 1978, Proposition 13 passed overwhelmingly. In subsequent years, prosperity and rising revenues from the internet boom and the real estate bubble allowed a papering over of a deepening political split, but in 2008, in a period of declining revenues, California lacks any consensus as to how to proceed. The State faces a crisis. 

Sometimes such an impasse provides an opportunity. My proposal is that a bi-partisan panel examine our State’s problem and recommend a comprehensive solution. As members of the panel, there would be three Republicans, three Democrats and a prominent jurist from one of the State’s law schools. I would suggest the following: Pete Wilson (R), Tom Campbell (R), Abel Moldonado (R), Gray Davis (D), Jerry Brown (D), and Michael Machado (D). The seventh member would be a law school Dean or a highly respected academic lawyer from either UCLA or Berkeley. Senators Moldonado and Machado are  well regarded members of the current legislature and are both centrists, a rare breed. The jurist or law school Dean would Chair the group. The members would be endorsed and empowered by the Governor, but would report only to the people of California.

The Grand Bargain would address and propose changes for the following:

  • the 2/3 majority requirement for the State budget
  • legislative control over redistricting
  • dual roll taxation so that corporate owned properties be assessed at 1% of market value
  • establishment of defined contribution pension systems for all public employees (state, municipal, and county) and the phasing out of defined benefit plans
  • changing the term limit periods for legislators and constitutional officers

The seven member panel would endorse a mutually agreed upon plan and present it to the voters of California. To the extent legally constitutional, special interests would be kept out of the process and discouraged from political advertising or other forms of advocacy. In statewide referendum, the citizens of California would either approve or disapprove the proposal. The outcome would have the strength of a constitutional amendment.





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