Joe Mathews unearthed a nugget Thursday - turns out the 99-year-old referendum power in California may have a more distant provenance than we thought, older than even the state itself.

That news could be bittersweet, though, because a measure on the November ballot  would effectively prevent the referendum from celebrating its centenary.

On its surface, Proposition 25 is fairly simple - it reduces the vote requirement to pass a budget from two-thirds of the Legislature to a simple majority.  However, Prop. 25's language also eviscerates the referendum, one of Governor Hiram Johnson's great reforms enacted to counteract the power of special interests, and a critical check that voters have on the actions and power of the Legislature. 

I agree with the Planning and Conservation League. But first, a little background.

San Francisco Mayor Gavin Newsom is considering asking the Legislature for an exemption from the California Environmental Quality Act (CEQA) so his city won't have to prepare an environmental impact report to host the America's Cup yacht race in San Francisco Bay in 2014.

That's right. An EIR for a yacht race.

A recent report that the Governor is considering borrowing $2 billion from the giant state pension system may seem incongruous with his earlier statements advocating full funding of pension obligations - not to mention sound fiscal management. But if these reports are true, then the Governor may have found a way to thread the pension reform needle to the long-term benefit of the state.

I should know - I was Governor Wilson's Cabinet Secretary in 1991 during California's last Great Recession. Then - as now - the state's contribution to the CalPERS system was seen as a legitimate source of temporary revenues to balance the budget. Then - as now - the Governor sought to make structural reforms to the state's retirement system to control spiraling pension costs yet maintain a fair and adequate benefit to retirees.

The difference today is we've had hard-knocks experience with what happens when the path to reform is not taken: a $650 million estimated obligation turns out to cost taxpayers $3.5 billion - and counting.

An old friend is back in town, at least according to George Skelton. He shows up every so often trying to settle in, but after making an initial good impression, the neighbors usually politely ask him to keep moving on.

I'm talking about the proposal to extend the state sales tax to services, which is apparently a tax reform being considered by the Governor's Office.

We've been through this before, most recently when the Commission on the 21^st Century Economy ("Tax Commission") began to consider reforming the tax code to make it more stable and "fit with the state's 21^st century economy."

Editor’s Note: I asked both Loren Kaye and Cal State Sacramento professor and former legislative staffer, Tim Hodson, to review “California Crack-Up” by Joe Mathews and Mark Paul in an attempt to get two perspectives of the book. Unfortunately, Tim disclosed recently that he is battling an illness. We want to take this opportunity to wish Tim and his family well. Loren’s review of California Crackup is below. JF

In California Crackup, Joe Mathews' and Mark Paul's provocative yet breezy prescription for what ails the Golden State, the authors exhaustively survey the history of governmental and political reform that has long defined the California polity.

They convincingly argue that five separate efforts over more than 150 years to make and remake the California Constitution "would prove no more successful than its predecessors."

Their solution: another round of reform to remake the California Constitution.

"What's the deal with Mel Gibson?" is probably the most common question being asked by Californians.

But in the six blocks surrounding the State Capitol, the most common question is, "When will we have a budget?"

I'll leave the mysteries of Mel to the deep thinkers on ETV. But for the rest of you, here are simple answers to your questions about when the state's budget will emerge.

Legislative leaders released their latest budget proposal, called the "Jobs Budget," which again is heavy on tax increases and light on boosting the state's economic competitiveness. Touted as "saving 430,000 jobs," the plan would increase taxes by more than $5 billion and continue speculative and one-time spending to support ongoing programs.

Key tax changes include:

• A permanent tax rate increase of one percentage point for every personal income tax bracket except the top bracket. This increase in personal income tax rates would be for the 2010 tax year, so would in effect be retroactive to all income earned this year, even thought it would be implemented in the fourth quarter. Also, the one-quarter percentage point "temporary" increase in PIT rates enacted in 2009 would be made permanent.

The White House, as part of a broad policy review, has asked business leaders to "identify specific regulations that they believe are obstacles to job-creating private investment."

The Administration is responding to an increasingly forceful chorus of criticism from national business organizations and individual companies, including a comprehensive, 54-page catalog of legislation and regulations prepared by the Business Roundtable and Business Council.

The organizations claim that these measures' "cumulative effect will help defeat the objectives we all share - reducing unemployment, improving the competitiveness of U.S. companies, and creating an environment that fosters long-term economic growth."

An initiative sponsored by government worker unions has qualified for the November ballot - and it may well be the most threatening issue facing businesses and taxpayers in 2010.

So what does it do? According to sponsors, Proposition 25, the "On Time Budget Act," merely reduces the legislative vote requirement to pass the state budget from two-thirds to a simple majority, and stops paying legislators if the budget is late.

But when you think about it, why would the California Federation of Teachers, California Faculty Association, California School Employees Association, California Professional Firefighters, Professional Engineers in California Government, American Federation of State, County and Municipal Employees, and California Nurses Association invest millions of dollars in a measure simply to reduce the vote on the state budget? What else does it do that its sponsors are not talking about?

On the last day of the just-completed fiscal year, the Assembly Speaker and Senate President Pro Tem announced agreement on what they call a unified Democratic budget "framework" that purports to reconcile their different approaches and "signals the next step of negotiations" with the Governor. 

It does no such thing.

But don't take my word for it; read the previously-confidential paper here. You will find that this is not a document that anyone could negotiate from.