May 14, 2009

Prison Sales, Welfare Scams, and Territorial Reversion

Apparently, the Governator will today propose selling San Quentin State Prison. And the Los Angeles Colosseum, and the Cow Palace, and a few other choice properties owned by the state. All in the hopes of generating up to a billion dollars of bonus revenue.

I wrote ten months ago that this is a bad idea. I still think it is. Seems to me that the state is simply not being creative enough with those properties to generate revenue from them. Granted, using property to incarcerate and kill criminals is about the worst kind of way to make money with it, so a repurposing of the famous prison might be in order.

But other sports arenas and concert venues and convention centers are run profitably. There is no reason the Cal Expo in Sacramento cannot be. There is no reason that the Agnews Developmental Center, 81 acres of prime space in San Jose, could not be converted into condominiums, for instance, and even preserving the historic look of the place, although if anyone had spent any time there, chances their memories of it are likely unpleasant. Or a shopping center and farmer's market (back in the 1920's there was a farmer's market run out of what was then called the Angews Insane Asylum).

These are properties that could -- and in private hands will -- generate a positive income stream if exploited correctly. In July, I thought that the amount of money that the state would get in exchange for parting with these unique and valuable pieces of real estate would be insufficient to solve our budget problems and represent a loss of unique opportunities to generate revenue. Given that a) the economic storm appears to be lightening a little bit, and b) the state's budget crisis is half again as bad as it was a year ago, I don't see any reason why I should change my mind.

We're twenty one and a half billion dollars short, folks. The state's credit rating is as low as it can get. The budget-reshuffling propositions next Tuesday are going to fail. And we've already raised state taxes beyond a comfortable or even justifiable level. That leaves us with two options.

One is to make painful budget cuts and have less government, which I suggested we do last year.

The other would be to forfeit statehood and allow California to revert to being Federal territory, to make the whole thing Washington's problem. Of course, we'd lose our delegation to Congress in the process and therefore be at the mercy of representatives of other states in solving these financial problems.

Lest Readers mistake what they read here for serious policy proposals: I'm not serious about giving up statehood; that was a facetious remark. I'm not sure that such a thing is even possible.
If you wanted to talk about really bad ideas, that's a whopper. Makes selling the Del Mar Fairgrounds look like a wrong answer in a trivia game by comparison. No, my serious proposal is that we make budget cuts.

The only area where that can conceivably be done is in the sphere of social welfare programs. Our roads are already falling apart. Our prisons are already overcrowded.* Our schools are already stretched to their limit. So that means that, for instance, we need to take a very serious look at the "home health care workers" paid by the state to be caretakers for disabled people.

Now, if you don't know about this racket, chances are good you'll be outraged. Let's take a hypothetical state of the USA other than California and call it, I don't know, "Tennessee" for discussion purposes. If you live in Tennessee and your parents or grandparents become ill or disabled or just plain old and unable to move around and take care of themselves as well as they cold back when they were in their forties and healthy, you can do any of a number of things with them. For instance, you might find an assisted-living facility for them where they can have nursing care on call and professional staff to help them with things that they can't do. Or, if you can't afford that, or can't find such a facility that is acceptable, you could take them into your own home and care for them yourself. It's a strain and a sacrifice, but it's also giving back to a parent you love who raised you, and you probably would consider that sort of thing to be your responsibility as part of a family.

In California, if you couldn't afford to pay for assisted living for your invalid relative, you'd do the same thing -- take them into your own home and care for them yourself. Only here, it's not something you'd do gratuitously, as part of your sense of responsibility to your family. No, here, you'd become a state employee first. California will pay you at least two and a half times the minimum wage as a full-time employee to do something that you already had a responsibility to do on your own. And the state will make you join the Service Employees International Union to do it, too, withholding part of the money from your state paycheck for your union dues. Which the SEIU will turn around and use to make political contributions to the Obama for President campaign.

So when it comes time to talk about budget cuts in California, SEIU will pull its strings in the White House and make damn sure that you, a protected, unionized employee of the State of California being paid to do something that you'd do for free in Tennessee because it's your responsibility to do it, will not have to give up a "job" that costs the taxpayers more than forty thousand dollars a year for people who do it, or even endure the indignity of a pay cut.

Now, this isn't "welfare" in the classic sense of general relief payments or unemployment insurance benefits. This is state employment. I shared a client with another lawyer many years ago, and our guy was in this system. "His job is getting paid to wiping his mama's butt," is how my colleague described it. I'm pretty sure that the dude supplemented this income with, shall we say, unlicensed but highly entrepreneurial retail activities, but that's another story.

If you're not outraged by this, you haven't been paying attention. Go back and read the previous four paragraphs of this post again. Read the linked article from the Fish Wrapper. Then you'll have a sense of why it is that Governator Schwarzenegger would rather sell off the Orange County Fairgrounds than make a budget cut -- this is how entrenched the special interests have become in Sacramento.

It's the same thing with a whole bunch of other places, too -- compare how much a prison guard makes in California to Tennessee. Even adjusting for the cost of living differential, you'll be shocked. And then you'll be despondent to realize just how impotent Sacramento has made itself to do anything about it.

The teacher's union has huge power, too. The Fish Wrapper did a series of stories recently about how difficult it is to fire a teacher at a public school. It's become cheaper to pay bad teachers to sit in empty rooms doing crossword puzzles until they get 100% benefits on retirement than it is to try and fire them.

That's why I'm talking about budget cuts as "painful." But it has to be done because we are out of other options. When we've reached the point that we'd rather sell off a billion dollars' worth of unique and potentially income-generating assets to make up 4% of our budget shortfall than make these kinds of cuts, it's gone too far. I'm on the verge of saying "burn it all down and start over from scratch."

* We could relieve some of that pressure by decriminalizing drugs. But I wrote about that earlier this morning already.

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