Retiring California Sen. Jim Nielsen Dissects the State Budget Mess

Commentary

California is going to suffer a great loss after the November election when state Sen. Jim Nielsen (R-Red Bluff) departs the Legislature because of term limits. He graciously answered questions about his lengthy time serving the state, giving his perspective on the worsening of the budget process. This is crucial work in the Legislature, because governments run on money.

Nielsen’s service in the Senate began from 1978-90, and he was Republican leader from 1983-87. He spent some years tending his ranch and raising his family, although in 1992 he was appointed chairman of the California Board of Prison Terms. In 2008-12, voters sent him to the Assembly. And in 2013, he won a special election to return to the Senate.

From the start he has been an expert on the state budget, helping craft budgets with such Democratic leaders as Assembly Speakers Willie Brown and Leo McCarthy, both from San Francisco.

Budgets from the Gang of Five

California budgets long were crafted and presented to the Legislature by what was called the Gang of Five, consisting of the governor and the Republican and Democratic leaders (majority and minority) in both the Assembly and the Senate. That was because it required a two-thirds vote of both houses to pass a budget bill.

Two things changed this process. First, in 2010 voters passed Proposition 25, which dropped to a majority vote the threshold to pass a budget, except for tax increases. That meant the Republican minority largely was frozen out.

Second, since the 2018 election, Republicans have held a superminority—less than one-third of the votes—in each house.

The older system was much better, Nielsen said. “It was a matter of bipartisanship, and members were more concerned with the process and the procedures of the institution. We were making a statement and taking a stand that we can work together on some things and be effective.

“And interestingly, over my career, some of my most successful landmark legislation has been done working with Democrat legislators, liberals. [San Francisco Assemblyman] Art Agnos, for example, and [San Jose Assemblyman] John Vasconcellos on the Master Plan for Education. It was interesting. The point being, it can be done. You just have to work with it.”

The best known legislator in recent California history was Willie Brown (D-San Francisco), the Assembly speaker during Nielsen’s early Senate tenure. Brown was later mayor of San Francisco and a mentor to Gov. Gavin Newsom and Vice President Kamala Harris.

“Willie Brown and I got along famously,” Nielsen said. He once told Brown, “If you made a deal with me, you delivered the votes. Well, you always delivered the votes.” Although they had disagreements, Nielsen said, “We don’t take it personally. You can get along if you try. And the things [where] you can’t get along, you just let it be.”

Republican Superminority

That “atmosphere changed” with the Republicans dropping down to superminority status in 2018, Nielsen said. “Now the Democrats just purposefully, and not inadvertently and not just even politically, just cut the Republicans out. There’s just no place. That’s disappointing. And it does not bode well for the institution. If they’re going to operate as a dictatorship, it’s not good for the people.

“The worst problem of all is not what they’re doing with the Republicans, but they’re cutting out the public. For example, when we have hearings, we have at the end of a hearing public comments. Well, that used to people would come, and they’d stand up, and line up, and talk, and say what they wanted to say. The chair could control it, and keep it rolling along.

“Well then, we’ve come to now, where you get two people three minutes for an issue, then two people three minutes against. Then everybody else gets to call in and all they get to say is, ‘I’m Jim and I like it’ or ‘I’m Jim and I don’t like it.’ That is no public input. It’s a disgrace and a fraud to call it that. And I’ve complained about that. But they don’t care. They don’t care because this is convenient. And OK, it’s convenient, but it sure cuts the public out.”

Centralized Power Abuses

The new budget process, Nielsen said, “gives the Democrat leaders and the governor far too much power.”

He referred to Newsom’s March 4, 2020 Declaration of a State of Emergency at the beginning of the COVID-19 pandemic. Some of that state emergency remains in effect (pdf).

Speaking of state governors as well as the U.S. president, Nielsen said, “The worst abuses of executive branches—plural—is emergency authority, declarations of emergency. And the ability of the governor to usurp the power and center it more in the executive branch of government. That’s exactly what’s happened. That cuts the Legislature out. And that’s all purposely done.”

Why didn’t the Democrats who run the Legislature protest against the COVID emergency?

“There will always be an ongoing emergency in effect, because it’s convenient for the governor,” he said. “The Democrats don’t seem to care. They don’t complain about it. They just go, ‘OK.’ I put bills in that would have forced termination criteria external to the executive branch. They couldn’t just unliterally decide when to put them on and when to put them off. But the point is, there’s no real exit date—60 days or 70 days or whatever—you have to extinguish the emergency. Or at least you have to stop, pause, and review it, and assess whether it still was required.

“And again, this was more convenient government, and more centering of the power, and taking it away from the people.”

Masks Deal with Communist China

A big controversy early in the pandemic was Newsom’s $1 billion secret deal in April 2020 with BYD, an electric car manufacturer with deep ties to the Chinese Communist Party and military.

Was there any review by the Legislature of the $1 billion sent to Beijing? “No, it’s all gone,” Nielsen said. “Never happened.”

California Government Does Not Compute

Nielson also brought up the problems the state has suffered from bad computer systems, most notoriously the massive failure of the Employment Development Department 2020-21 to give timely assistance to millions of unemployed Californians after Newsom locked down large parts of the economy.

“Our biggest problem is the darn tech companies, signing these contracts with the state for technological upgrades, costing billions of dollars,” he said. “None of them comes in on time. None of them comes in on budget. And it’s just like a blank check to Silicon Valley. The taxpayers get ripped off. These systems, I’ve been a part of them for decades, as we’ve upgraded our technology.

“Fi$Cal is the most recent disaster. It just sops up the money.” Fi$Cal is the cutsey name for what’s supposed to be a system unifying all state budgets. I reported on it in The Epoch Times earlier this year in, “California’s Government Adds to Infamous History of Computer Problems.”

Nielsen then brought up the California High-Speed Rail project. Even Newsom, in his 2019 State of the State address, said of it, “But let’s be real. The project, as currently planned, would cost too much and take too long. There’s been too little oversight and not enough transparency.”

Nielsen said of the train, “That’s the stupidest idea that I think anyone has come up with. It will never happen. But we’re spending billions of dollars on something that makes no sense. In fact, it’s ludicrous. For a while, the Senate was doing a pretty good job of oversight. I’d say the last five years the Senate really stepped up its oversight.” For example, KQED reported in 2016, “Senators Ask Tough Questions About High-Speed Rail.”

But today, Nielsen said, the Senate is again “getting lax. It’s too bad.”

Controller AWOL on Financial Report

The last Annual Comprehensive Financial Report by Controller Betty Yee was for the fiscal year ending June 30, 2020, more than two years ago. All other states have filed their ACFRs for the subsequent fiscal year. Such delinquency makes it more difficult for legislators to craft a state budget because they lack an accurate picture of the state’s fiscal health. Her excuse has been the state departments have been late sending her the numbers. But she has not criticized Newsom for letting his departments off the hook.

“I don’t know the answer to that,” Nielsen said of the delinquency. “It has hardly been questioned or debated in the Legislature. But it is part of the apathy of the legislators to take control back and force the accountability of the agencies. The agencies have been out of control. The bureaucracy has ruled California for decades. And they do things just unilaterally. It’s another example of how things get corrupted.”

He remembered when he was “a brand new senator and I teamed up with Leo McCarthy, the powerful speaker” of the Assembly, 1974-80. “The Administrative Procedures Act, we authored that. That was agencies, before promulgating regulations, had to have a review of the regulation, and of its need. And my contribution was they had to consider the economic impact of the regulation.

“Well, agencies have just ignored that. And they govern by fiat. They simply put in place an emergency regulation. And nobody knows. And they make law in administrative law, not statutory law.”

Term Limits, Good and Bad

Nielsen is leaving because of term limits, which voters passed in 1990 with Proposition 140 and modified in 2012 with Proposition 28. It has been criticized because it reduces the influence of legislators with extensive experience, who have to leave. There have been movements to repeal it entirely.

“I don’t think the voters want to do that because it’s their way of expressing their dissatisfaction with the Legislature,” Nielson said. “Now to the point. The good side of term limits is there’s a more diverse population, meaning people of different backgrounds that now serve in the Legislature. It’s not as much an insider deal. That’s good.

“But the bad part, and it’s a telling bad part, is institutional memory does not exist. The curiosity is not there. And therefore the ability and accountability to govern have been diminished by it. And ironically, it accelerated the people’s loss of authority during the time of term limits” because of the transfer of authority to the governor, noted above.

72 Hours to Review Bills

The legislative leadership long had a practice of putting bills before legislators shortly before votes were taken. That’s why in 2016 voters passed Proposition 54, requiring bills be printed 72 hours before a vote was taken.

Prop. 54 helped “slightly,” Nielsen said. “The Democrats hate it. Now they’re touting it as their great idea and great reform. But they’re even chipping around at that. How did they do it? Well, our 72 hours begins to toll on Friday. Ain’t nobody watching. That’s how they do that. Then they run the clock up to the last minute” on the next Monday.

“For example, every year my team gets briefed just hours before we convene the next day to deliberate and vote on the budget. The Democrats throw a few documents our way. But most of the documents don’t get there. The Democrat senators don’t get them either. So it’s all a closed deal. And they have very effectively cut Republicans out of the picture. But worse, as I say in debate, you cut a million people that we represent out of the picture.”

Each of 40 senators represents about 1 million Californians.

Gut and Amend Process

One of the Legislature’s worst tricks is called “gut and amend” and is little known to the general public. One bill, say on naming a park, is “gutted” entirely, its wording replaced with an “amended” wording that’s on an entirely new subject, such as spending on a pork project.

“They absolutely love it,” Nielsen said. “It’s the best way to make a sneaky deal. It’s so covert. No review. No opposition Republican input. The Legislature has figured out how convenient that is.

“End of session, the lobbyists poured in to me saying, ‘Jim, Jim, we need to do this amendment here. Blah, blah, blah.’ I said, ‘No. For years I’ve tried to help out straightening this mess out. But I’m done now. So you go find somebody else to do all this stuff. I don’t like it. It’s a scam. And you shouldn’t get away with it. And the 72-hour rule has helped just a tiny bit.”

The $100 Billion Surplus

This year’s $100 billion surplus “was a missed opportunity,” he said. “For a few years there was a bit of accountability in the budget,” such as when the state set up the Rainy Day Fund with Proposition 2 in 2014. “But what now has happened, all that goes on in the budget is, what we always had, is incremental budgets. Everything last year gets a COLA [Cost of Living Adjustment].

“And then we have all kinds of new, great, billion-dollar ideas for this year. Those billion-dollar ideas are long-term obligations. Most of them are not sunset. So you just keep building your base year after year after year. It puts the growth of the budget on automatic pilot. Probably the only good thing is the automatic COLAs have diminished.”

Final Thoughts: Control to the People

“I speak about it literally every day, in every forum,” Nielsen said. “My central theme for a long time here has been you, the citizens, have lost control of your government. You need to get it back. How do you do that? You have to get actively involved in your community, get personally acquainted with your legislators, and spend a lot of time with them, watching them, meeting with them, talking with them, communicating with them. And it’s going to require some energy. Just signing your name to a petition, or just a mass deluge of letters, doesn’t help a bit. It doesn’t even count. You’ve got to re-establish relationships with your local legislators. So they see you, they know you, and you can help hold them accountable.

“The best thing that’s happened in the last two years is with COVID. All of a sudden, the schools have had more scrutiny than you’ve had before, because they were doing remote. That’s a boondoggle we’ve also got to stop, doing everything remote. But that said, the parents got to look into the classroom, and they didn’t like what they saw. So what have they done? Well, they’ve recalled a bunch of school board members across the country.

“A few weeks ago, in committee, I ran a school board advocate out of the room. He was testifying he was there in support of a bill to make it harder to recall school board members. I said, ‘Sir, I used to respect school board members. I don’t anymore. You don’t represent the students and their families. You represent you and your power. And I’ve got no use for that. And now you’ve gotten scared that the public is going to make you accountable, by recalling you if they don’t like the woke stuff you’re putting into the classroom. Well, that’s too bad, that’s what it’s all about.”

Ending on a personal note, when I was state Sen. John Moorlach’s press secretary, 2017-20, he was a close ally of Nielsen, both being fiscal hawks. Moorlach lost his re-election to a freespender. Nielson soon will be gone. The Republican Caucus likely still will be a superminority.

Who will represent the people’s fiscal concerns when the surpluses dry up, and the dark days of deficits return?

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.