Via Reuters: With no budget, California to cut 20,000 state jobs

California, which is on the brink of running out of cash, will notify 20,000 state workers on Tuesday their jobs may be eliminated, a spokesman for Governor Arnold Schwarzenegger said on Monday.

The announcement came a day after California lawmakers narrowly failed to pass a $40 billion budget that would have plugged the state’s deficit with a mix of tax hikes and spending cuts.

According to the report, the numbers represent about 20% of the state’s workers.

The LAT reports that the number of layoffs at 10,000: Legislature adjourns with no budget; governor prepares to lay off 10,000.

NPR is going with the 20k number.

Meanwhile, back on the plains (via the Kansas City Star): Kansas budget crisis: State tax refunds on hold

State tax refunds, Medicaid reimbursements and payments to local schools are all on hold because of a political showdown between Kansas legislative leaders and Gov. Kathleen Sebelius.

The Kansas Finance Council was to meet at 1 p.m. today to vote on whether to borrow $225 million from healthy state funds to cover expected payments to schools, state workers and taxpayers. The state did the same thing last December when it ran into a cash-flow problem.

But Republican leaders said they wouldn’t authorize the new loans until Sebelius, a Democrat, signs legislation designed to erase the state’s current year budget deficit. That bill, passed Thursday, cuts statewide school funding by $32 million and makes millions more in cuts to other state agencies.

And these are not the only such cases that will emerge, one suspects. One thing that strikes me about such stories is that it ought to illustrate the relative place of the states within our federal system–and that is that 1) they are clearly subordinate to the central government and 2) that they all are inextricably linked one to another.

First, why point this out? Fundamentally because it seems that a lot of US citizens have views about federalism that are informed by idealized, anachronistic thinking sprinkled with error. By this I mean that when, over the years, I have discussed constitutional reform or other issues that touch on the question of the relationship between states and the central government, there is usually a set of responses who wish to assert the sovereignty of the states or who get quite exercised about federalism. The most recent example that comes to mind is when 1 I asserted my support for a constitutional amendment for requiring special elections to fill vacant senate seats.

Second, what do I mean? The current economic meltdown, and the way the states will be forced to deal with it, wholly and fully underscores the subordination of the states within our system (and I use “subordination” ins fully neutral sense). The states are not acting like the sovereign, co-equal-in-all-ways units that some like to think of them as. For example, California is the 8th largest economy in the world and it if it were a sovereign state it would be approaching the crisis a lot differently. Indeed, they would be, like the US central government is doing, engaging in serious deficit spending and borrowing/printing money to do so. They would not be waiting on a higher power to help bail them out.

Further, most (all?) states require balances budgets (which I think is the case in California, but I am not certain), and hence the straightjackets they find themselves in at the moment–a straightjacket that is easier to put on oneself if one knows that the federal government is there in case of emergency, btw.

I am not saying that federalism does not exist in the US. Rather, I am trying to point out how it actually works, and part of that functioning is the simple fact that the states are not autonomous units strung together, but part of a whole, and a whole that has a head, i.e., the federal government. This fact will become ever clearer, I should think, as we move through the economic difficulties ahead. If anything, the subordination of the states to the central government should be obvious here, even if the states do have a large about public policy where they exercise a great deal of autonomy. This has been the way it has been for some time, and depending on the area of public policy we are talking about, has been the case since, oh, 1789.

At a minimum, I don’t expect to hear a lot of cries about “states rights” and “federal meddling” when federal bailout funds come to a state near you (although I do expect that there will be some folks somewhere who will see it that way). One of the key issues worth underscoring in the discussion is that the federal government doesn’t represent “them” while one’s state represents “us”–rather, both are just different manifestations of “us”.

And btw, I am aware that at times it is appropriate (usually in certain legal circumstances) that the states are referred to as “sovereign”–but there is a serious difference between using that term in a narrow, legal/constitutional sense and using it as a proper description of their relative place within the United States, let alone within the broader world.

1. Although the kind of responses I am thinking of were to be found in a comment thread at OTB [↩]

6 Responses to “Economic Bad Tidings from the States (And Musings on Federalism)”

1. Patrick Watson Says:
   February 17th, 2024 at 9:48 am

   You describe well the situation as it actually exists. We can still argue whether a deeper federalism, if we had it, might be better or worse. For instance, would the states be as subordinate as they are if the state legislatures still had a direct role in appointing Senators? It is hard to imagine such a Senate approving the massive unfunded liabilities that Washington has imposed on the states in recent years.

2. Dr. Steven Taylor Says:
   February 17th, 2024 at 9:59 am

   Certainly one can argue for any number of alternative arrangements. We could argue, for example, why a parliamentary system might be better. However, when it comes to analyzing politics, all one can do is understand what is. Many people like to discuss these issues from an alternative point of view–like I said: a combo of error, fantasy and anachronism, but acting like they are talking about the way things really are.

   For instance, would the states be as subordinate as they are if the state legislatures still had a direct role in appointing Senators? It is hard to imagine such a Senate approving the massive unfunded liabilities that Washington has imposed on the states in recent years.

   Why? The bottom line with those issues is that they are perceived to benefit the citizens of the US from the point of view of some legislators. There is nothing about the evolution of public policy over time that would suggest this to be the case.

   The dynamics of such a situation would be different than what we currently have, but why this would led to a radically different policy regime is unclear. The issue that is more relevant in terms of the evolution of policy is the size of the federal budget, not how the senate is elected.

3. Alex Knapp Says:
   February 17th, 2024 at 11:03 am

   Speaking as a Kansan, I can tell you that the blame for this lies solely in the hands of the State GOP, which is taking advantage of the crisis to try to force the governor to cut funding for public schools, the cost for which the GOP here has been complaining about for years now (apparently, having some of the best school districts in the country means we’re paying too much, or something). It appears that the GOP in California is being similarly recalcitrant. If I were the DNC, I’d be calling attention to this like mad: “Republicans don’t want you to have a tax refund!”

4. Dr. Steven Taylor Says:
   February 17th, 2024 at 11:28 am

   I must confess, I don’t think that the GOP (nationally, or at the state level in the cases cited) are doing themselves any favors.

5. MSS Says:
   February 17th, 2024 at 4:25 pm

   California indeed has a ‘balanced budget’ requirement, which leads to all sorts of creativity.

   But the biggest hand-tying provision in the state constitution is the 2/3 requirement to pass a budget. The Republican governor and Democratic legislative leaders had a deal months ago. They need 3 Republicans in the 40-seat state senate to get the votes to pass it there. (They got the few Republican Assembly members they needed a little while ago.) But they can’t get the last one.

   The 2/3 requirement is allowing a narrow minority to strangle the state.

   (Off the top of my head, I think Vermont is the only state without a balanced-budget requirement. There are a only few other states besides California with 2/3 requirements.)

6. Dr. Steven Taylor Says:
   February 17th, 2024 at 4:29 pm

   Isn’t there also a 2/3rds requirement for tax increases in CA as well?

Leave a Reply