Experts Expound

Experts Expound

The federally appointed prison receiver says state officials are guilty of deliberate obstruction for blocking his $7 billion plan, and may seek action from a federal judge. The state says it doesn’t have the money. Who is going to blink?

The state.
The state’s going to blink. The governor and legislators can raise taxes and blame it on the courts.

The feds have no reason to blink. It’s not their money. You know the federal government with a blank check . . .

Nobody blinks, the judge acts, and it gives the governor the excuse he needs to actually, well, do something more tangible than the nothing he’s been proposing to deal with the budget shortfall.

Of course, the state doesn’t have the blinking money. I’m not sure that makes any difference. The interesting question involves who the feds serve with papers when they sue the state or come looking for somebody to lock up as a scofflaw. Governor? Controller? Attorney General? Mike Villines and Dave Cogdill? All of the above?

When the Brink’s truck backs up to the Treasurer’s office, the Senate Republicans will blink.

The state’s bond issuers need to provide bond holders and buyers with accurate information. For too long, bondholders have gone without honest information about the states real financial condition. Mandates need to be on budget and discussed in financial statements which meet generally accepted accounting principles, liabilities such as the unfunded medical for retirees. Now we have the very real possibility of $7B of the state’s cash being seized by the Feds and honest disclosure is called for.

This is the hidden wild-card in the budget mess, and the receiver holds all the cards. The feds can demand the money and the state has no recourse.

The prison receiver is right. Under Nunez and Perata the Legislature has refused to act responsibly on this issue. The US Constitution is going to win and the California taxpayers are going to lose. These two “leaders” were dealing with important issues like a term limit extension at a time when the prison system is in crisis.

The prison guards are going to have to blink, but it takes a while to get the message through the often vacuous heads of their leadership. Kelso needs to speak slowly and repeat the message often.

 The people from whom we sought opinions:: Elizabeth Ashford, Andrew Acosta, A.G. Block, Mark Bogetich, Barry Brokaw, Morgan Crinklaw, J Dale Debber, Peter DeMarco, Jim Evans, Kathy Fairbanks, Jeff Fuller, Rex Frazier, Ken Gibson, Evan Goldberg, Deborah Gonzalez, Sandy Harrison, Bob Hertzberg, Jason Kinney, Mike Madrid, Nicole Mahrt, Steve Maviglio,  Adam Mendelsohn, Barbara O’Connor, Bill Packer, Kassy Perry, Jack Pitney, Adam Probolsky, Tony Quinn, Matt Rexroad, Matt Ross, Roger Salazar, Dan Schnur, Will Shuck, Ralph Simoni, Sam Sorich, Ray Sotero, Gary South, Kevin Spillane, Rich Zeiger.

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