Businesses Suffer When Sacramento Fails to Act

CAPITOL OFFENSES Brendan Huffman When state legislators routinely miss the Constitutional deadline of June 15 to enact annual spending plans, it means that businesses that contract with the state must wait a few weeks, or even months, before they’re paid, allowing them to pay their employees. Budget cuts hurt many segments of our population — they always do. It’s unfortunate that lawmakers have been negligent for so long when it comes to fiscal management. Furthermore, it’s frustrating that lawmakers — under the devastating specter of term limits — have enacted so many new programs without revenue streams. Voters who have approved ballot initiatives creating new programs and minimum spending thresholds — without identifying revenue sources to pay for them — deserve a lot of blame, too. Nevertheless, here we are again without a realistic budget passed on time. Although, the passage of Prop. 25 last year has made things more interesting. Supporters of the “Majority Vote for the Legislature to Pass the Budget Act” presented Prop. 25 as a way to ensure balanced budgets that are passed on time. Moreover, Prop. 25 would make sure legislators don’t get paid when the budget is overdue — no IOUs, just no paychecks, period. So when Controller John Chiang announced that since a balanced budget was not passed, he would not be issuing paychecks to lawmakers until a balanced budget agreement was reached, some lawmakers and Prop. 25 supporters cried foul. Legislative leaders and special interests that funded Prop. 25 contended that, since the governor vetoed a budget passed by both the Assembly and Senate, it’s not fair to penalize the lawmakers. Never mind that nobody outside of Sacramento believed that the first budget they passed was balanced. Other arguments challenge the notion of the executive branch (Controller Chiang) having the authority to determine whether legislators get paid or not. Well, lawmakers probably should have thought of that before they sold Prop. 25 as a punitive measure against members of the Legislature when the budget isn’t passed. In fact, the campaign rhetoric consisted of “passing the budget on time and keeping legislators accountable.” Perhaps the most unfortunate reaction to legislators’ paychecks being cancelled came from one of the Valley’s legislators when he referred to Controller Chiang as a “demagogue” and California as a “banana republic.” He added: “I now have to explain to my wife and daughter that we won’t be able to pay the bills because a politician chose to grandstand at our expense.” Thankfully, this lawmaker quickly backtracked on his comments, but his choice of words shows a possible lack of appreciation of the hardships that late budgets cause on millions of Californians. Capitalizing on that were KFI’s John and Ken conducting an impromptu canned food drive in front of the legislator’s district office. Take the example of educators. By law, all public school districts must approve their annual spending plans by July 1. Since education funds are contingent on the Legislature’s actions, you see the problem. School districts cannot enact accurate budgets by July 1 when the Legislature hasn’t passed its budgets by July 1. Last year, the state budget wasn’t even passed until after the new school year had begun. Consequently, school districts are required by state law (under legislation originally sponsored by teachers unions) to send out notices to all teachers who could be laid off 90 days in advance. Because of this law, thousands of teachers are noticed just in case their school districts end up with less state money than expected. As we’ve seen, the pink slips to teachers understandably cause a lot of consternation among the educators, their families, students and parents. Now how about private sector employers who contract with the state? Surely, those business owners and their employees also have to explain to their spouses and kids that their households will be impacted as well because “politicians chose to grandstand at their expense,” too. See? Such rhetoric can work both ways. Yes, all 140 legislators’ families will be impacted by the Controller’s interpretation of Prop. 25, but so will millions of Californians who earn less than legislators do and don’t get state-owned vehicles for personal use or per diems, either. Despite the politically-charged and fiscally-complicated situation, a compromise on a realistic spending plan is not impossible, and Gov. Brown should be commended for his candor and his commitment to resolving the state’s historic fiscal mismanagement once and for all. We elected our legislators to do a job regardless of how it impacts their political futures; our families’ futures should be higher priorities. (However, I must say that I thought Gov. Brown’s spokesperson’s calling GOP legislators “basically moronic” was counterproductive and unprofessional). Regardless, the budget cuts are going to hurt many Californians for many years to come, and the budget impasse is affecting thousands of businesses and their vendors who contract with the state. Naturally, political rhetoric has its place in the budget negotiations. But legislators should not be careless with their rhetoric to the extent it suggests they are insensitive to the pain the Legislature’s actions (or inactions, in this case) have caused on millions of working families in our state. The overwhelming majority of Californians don’t care who’s to blame nearly as much as they care about how they’re going to pay their rent or put food on the table. Even John & Ken won’t be able to hold canned food drives for that many people. Brendan Huffman is the owner of Huffman Public Affairs, a San Fernando Valley based firm specializing in association management and strategic communications. Catch Brendan every Thursday at 11 a.m. for “Off The Presses” on LATalkRadio.com for in-depth conversations with officeholders, journalists and other top opinion leaders.