Antonovich calls for fiscal emergency

LOS ANGELES - Los Angeles County Supervisor Michael Antonovich sent a letter to Gov. Schwarzenegger last week requesting the immediate Declaration of an Economic Emergency for California."At (last week's) ribbon-cutting for the new Health and Wellness Center at the Antelope Valley Community Clinic, which will serve 40,000 residents a year, the operators were presented with an IOU -- not a check -- from the state," Antonovich wrote. "Earlier this month, the state announced that it would withhold $2.9 billon in payments for local governments and school districts to pay the state's operating expenses. The failure of the state to pass a budget for the last 64 days requires a Declaration of Economic Emergency for California." "Sacramento must end the fiscal breakdown impacting every citizen. Californians need a sound, realistic budget based upon available dollars -- not a third-world financial Ponzi scheme built on false assumptions and wishful revenues," he added. "As California's unemployment rate approaches 12.5%, with nearly 400,000 manufacturing jobs lost, and the Central Valley's agricultural fields becoming wastelands, we need action." "Every department and agency must be evaluated, waste eliminated and programs and services prioritized -- the state legislature's committee structure also needs to be streamlined. Duplicative departments and programs must be consolidated or eliminated," he said. "Roughly 80 cents of every government dollar in California goes to employee compensation and benefits for state employees. Moreover, California is saddled with $550 billion of retirement debt. Even greater cost increases are coming due to unfunded promises and deceptive pension fund accounting that understated liabilities and overstated future investment returns. This debt-to-revenue ratio coupled with the state's fiscal viability has forced Standard & Poor's to downgrade California's Bond rating -- already one of the lowest among the states." The Supervisor continued, "To create private sector jobs, the state should follow the lead of other states who offer tax incentives and a business-friendly environment. Texas rolls out the red carpet while California rolls out the red tape." "The failure of our state was recently recognized by 600 CEOs surveyed by Chief Executive Magazine who awarded California the "Booby Prize" in its 2010 report on business-friendliness," he noted. "California's high taxes and excessive regulation put it in the bottom 5 ranked states, along with New York, Michigan, Massachusetts and New Jersey. Top honors went to Texas, North Carolina, Tennessee, and Virginia." "By claiming that the 2/3 vote requirement and Prop 13 are impediments to passing a budget or raising taxes, legislators have created a smokescreen to hide the real issues. The 2/3 requirement has not prevented the tax-and-spend crowd from saddling Californians with some of the highest income, sales and business taxes in the nation. The 2/3 vote requirement is, in fact, the last line of defense for the state taxpayers," he said. "With regard to Prop 13, property tax revenues increased 600% from 1981 to 2007 ($6.4 billion to $43 billion) -- far higher than the combined rate of population growth and inflation over the same period." Antonovich asked the Governor to consider adopting some or all of the $32 billion in cost-saving measures in the suggested 2,500-page California Performance Review he requested in 2004 that included: •Combining the State Board of Equalization and the Franchise Tax Board •Streamlining Health and Human Services eligibility processing saves $4 billion over 5 years. •Creating a work force plan for performance measures to save $3.3 billion over 5 years. •Implementing biennial DMV vehicle registration saves an estimated $1.3 billion over 5 years. •Standardizing criminal background reviews in health and human services agencies and use of SMART cards for Medi-Cal patients saves over $100 million over a 5-year period. •Consolidating mental health, alcohol and drug programs, licensing and certification functions saves nearly $75 million over a 5-year period. •Developing strategic procurement strategies saves $850 million over a 5-year period. "In addition, it is imperative that the following structural reforms are implemented to solve the short-term and long-term crisis: •A 2-year budget •A part-time legislature •Overhaul of the Civil Service system •Ending the legislative practice of introducing legislation that costs more to pass than the recipient receives. •End to term limits •Establish a rainy day fund for emergencies •Reform pension system He concluded, "Again, the immediate declaration of an Economic Emergency and the implementation of these measures should be enacted in a short time frame to get California back on track."

********** Published: September 9, 2010 - Volume 9 - Issue 21