Here in California we continue to experience the car wreck that is the annual budget process. Normally we will see a few idiots screwing things up while the rest simply sit around and watch but this year there seems to be some competition for who can do the stupidest or most irresponsible thing.

For those who don’t know the full story, California is supposed to have a budget passed on or before July 1st but it almost never does so. Usually the wrangling takes a few weeks and then we move on. But every once in a while we get into a real deadlock and it stretches (as it has this year) into August and even September.

When that happens we start to run into some legal and financial problems in that, without a budget, the state technically will run out of money. In past years this has led to the shutdown of various government offices and on a few occasions the involuntary unpaid vacations of some state workers.

But this year Governor Arnold Schwarzenegger has taken things to a new level and has made, in my opinion, a very stupid set of moves. His solution was to order the state to pay all employees the federal minimum wage until the new budget was passed and then they would get back pay.

There are several problems with this solution (aside from the fact that it is patently unfair to punish state workers for the idiots in the legislature failing to do their job). One problem is the logistics of the matter, it would take a lot of time to reprogram the computers to pay everyone minimum wage and even more time later to calculate the back pay that was due. Another problem is the massive cost of the project (paying the programmers to do all the work. And from a purely political standpoint it is a terrible idea (probably killing Arnold’s plan to run for Senate in 2010).

State Controller John Chiang has refused to implement the order citing the reasons above and this has resulted in Arnold filing a lawsuit, thus costing the people even more money and doing nothing to solve the problem. I have often praised the Governator but in this case is is massively and undeniably wrong.

At the same time, we cannot ignore the nonfeasance on the part of the state legislature. While I do not blame them for the stupid idea from the Governor, they are to blame for failing to pass a new budget. To be sure there are a lot of problems this year, most notably a $ 14-15 billion dollar deficit and a sagging economy. But this does not mean that they cannot work something out.

As discussed previously, the central issue is the failure of the legislature to compromise on everything. Democrats control about 60% of the seats in both houses of the body so in theory they have control over the process. But California law requires a 2/3rds majority to pass the budget and that means the GOP does have a little influence over the process. They have steadfastly refused to accept any tax increases and that has stalled things.

At the same time the Democrats have also refused to even consider any serious spending reductions, and the simple fact of the matter is that you are not going to cure a 15% budget deficit by raising taxes on ‘the rich’, especially when nearly half of your budget is locked in.

Labor unions, who control the Democrats in the legislature have pushed hard to make sure that there is not even any consideration of cuts in any of the areas that they have an interest in. They air commercials talking about how ‘the evil Republicans’ want to take little Jimmy’s favorite teacher away. The fact that there is considerable waste in education spending (I’ve got first hand experience at this) is ignored because that would take away some cushy jobs in administration that have nada to do with schools or classrooms.

What we really need is some actual leadership in both the legislature and the Governor’s office.

We need a legislature that will work together on a non partisan basis to balance both spending cuts and tax increases to get past the current crisis.

We need a Governor who will try to bring those sides together rather than punish state workers.

Once we get past this problem we need both groups to take a long hard look at the budget process for the future and evaluate what we can and cannot afford because the fact is we as long as spending goes up and revenues remain flat we are going to face this problem year after year.