Edmiston: State Budget Crisis Constrains SMMC's Plans

How has the California budget crisis-and long periods of uncertainty-impacted the programs and operational responsibilities of the Santa Monica Mountains Conservancy (SMMC)?

It has been pugilist's blow to the solar plexus. We haven't recovered yet. It is even questionable whether the most recent state bond sale will have done the trick.

We have holes in the ground covered with plywood because construction was stopped abruptly on December 18, 2008. We have contractors suing us because we have been prohibited from paying legitimate bills. We have piles of material sitting on the job site that were purchased by the contractors. We have had about a half dozen layoffs.

There has been a devastating affect on anybody that has tried to contract with the state. The SMMC is heavily dependent on the ability of the state to deal in the bond market. While there were some spectacular bond sales in April and late March, the Obama "Build America" bonds have some unique restrictions; many of the things that we do, for example programmatic activities, are not possible with the bonds. Even with the fact that the state and the state treasurer were very successful in selling the Build America bonds and reserving general obligation bonds, for an organization that has traditionally relied on Proposition 50, Proposition 84, etc., we are still hurting.

What Proposition 84 water bonds projects remain on SMMC's agenda?

The most frustrating thing, of course, is that the market is now very favorable for purchasing properties. The revitalization of the L.A. River is but one example of where opportunities exist.

But we have a sign out saying almost literally that "we are out of business." While, we are not literally out of business; we definitely are out of money, and the state is out of money. If state funds were flowing, we would be able to take advantage of some pretty fantastic opportunities. Landowners are saying that it makes a lot of sense to sell to the state for conservation purposes. While some people are saying, "If you can hold on for ten years the market is going to come back"- those who want an immediate cash infusion are calling me and saying, "Joe, you have wanted my property for ten years. Now is the time." And I have to say, "Well, now is not the time."

People are saying either I finance myself to hold on or I sell. Once people indebt themselves to these properties we won't have the same opportunities that we have now. We don't have any opportunities without cash, and we don't have any cash.

In your last interview with TPR, you said that the SMMC was going to focus on watersheds. Have you been able to so?

We had comprehensive contracts out there to do exactly that, but we are dead in the water. By the time your readers get this I hope things will have changed. I hope that all of this will just be a bad dream. Right now it looks like the nightmare is going to last a little bit longer.

With the May ballot initiatives having failed, what are the state's options, and what do we do to better govern ourselves?

Change has to be so fundamental that it can't be done within the existing structures. I increasingly think that some version of a constitutional convention has to happen. There are too many good things that the state does that are imperiled by this annual crisis. Back in the Hiram Johnson era, when the railroads ran the state, Johnson went up and down the state and demanded change. Schwarzenegger could pull together an unusual constituency; that may yet happen. Short of pulling together that unusual constituency, we need to have mechanisms that don't require Terminator-like activities to run the state.

You have been in your position for almost three decades. During that time there have been Republicans and Democrats in the Legislature and in the governor's office. What distinguishes 2009 from earlier times, when budgets were passed, credit flowed, and the people's business was done?

It all goes back to term limits. I'm not saying that in a peevish way. There have been budget crises in every single administration, partially because of the actions of their predecessors, but also because of the actions of the business cycle. It was pretty shocking to hear the dialogue that Senator Maldonado repeated about the political virtues that some people in the Republican Party saw to justify running the state into the ground.

There have been games of chicken played between the Legislature and the governor forever, but no one ever saw a political advantage to running the state into the ground. Unfortunately, now there are those who see that advantage. When that happens all is lost. There is no appeal to the greater good. Folks who know they are going to be there for a very short time have every reason to make a big splash but not a long-term impact-they have no desire to solve the problem.

That seems like a bi-partisan comment. Is it?

I was disappointed in the early ‘90s when the Democrats held out for over two months. In the end, if you calculate all of the damage that is done by the holdouts. Again, when you give a politician a lever and say, "If you pull this lever you can get power, be famous, and get interviewed," it is very difficult for them not to pull it. With a two-thirds vote requirement there are levers that politicians can pull. We have stop giving them the opportunity to stop the machinery of government. It is up to the people to reclaim their processes so that there aren't levers out there where a small group can bring the machinery of government to a stop.

With the state actively governed by ballot box budgeting, and with environmental organizations actively lobbying for more bond and capital money for acquisition of land and water resources- do environmentalists bear any responsibility for the state's current dire financial situation?

The absence of the bonds concerned people because it brought huge amounts of construction and work to a halt. Without that stimulus we would be in even worse shape. Bond measures forced upon the Legislature by the people are not the cause of a lot of the problem. Everyone realizes that those bond measures coming to a halt was a very serious problem for California and our economy. That is why everyone thought that April 22 would solve all of our problems. It turns out, of course, that it did not. The initiative process has been the savior of California.

Whether you like it or not, Proposition 13 has a major impact and is a major feature of California government. We would not have had that without the initiative process. The Coastal Commission is a major feature of environmental protection and we would not have had that without the initiative process. It trickles all the way down.

The initiative process is a vital thing. Maybe there ought to be some tweaking to it, and maybe a Constitutional Convention could do that. Look at ballot box budgeting-people like the idea that we've used cigarette taxes for health related things- creating First Five, and that we set aside amounts for mental health. Maybe we would get around current budget stalemate if we had more ballot box budgeting. Proposition 98 is a good example of ballot box budgeting. How schools use their money is one thing, but guaranteeing an ample portion of the California budget is another.

Make the case, when hard times befall California, that SMMC's open space management and land acquisition work is competitive with other state government priorities-unemployment benefits, availability of health care, provision of education, and security of prisons.

You can't take a snapshot of California at one of its worse times and project that forward. We are going to have resurgence in the building industry. We will have population growth. Those fundamental needs are out there. This gets back to the issue of ballot box budgeting, but it also deals with the popularity of our measures to the individual voters-when the voters are given the opportunity they say, "We want clean water; we want watershed protection; we want all these things that the SMMC was chartered to do." I look at this as being investment for the needs of California in the long-term, not judged by the particular ups and downs of the stock market.

The other thing that has to be emphasized is that we have programs for getting people back to work. The programs that are affected most are the programs that hire kids right out of high school and are tying to build internships programs for kids in environmental jobs.

As I said, we have holes in the ground where contractors have been pulled off of the job because of the bond freeze. Particularly along the Los Angeles River, we had "boots on the ground" prior to December 18, 2008. Those folks have taken off their boots, and I don't know what they are doing. We are contributing to long-term and short-term needs in terms of running construction projects that provide immediate jobs. Or, I should say, we were before December 18, 2008.

Are you suggesting that you now favor a Constitutional Convention because you have given up on the legislature as the best vehicle to optimize allocations of public monies? Do you then also encourage and support the continued use of ballot box budgeting in California?

We are faced with a very stark choice here. The choice is to make the representative government functional or to give the people more of a direct say. Right now we don't have a functional representative government. No one who has experienced the California government over the past year would say that California has a functional government. I'm not giving up on it. We have to point to the Legislators and the system and say that this system must be fundamentally reformed so that it works. If it doesn't, the public still needs an outcome from government.

You're not going to be able to change the initiative process. The one thing that is vouch-safe is Hiram Johnson's initiative, referendum, and recall. You're never going to get the California electorate to vote themselves out of that power. Given that fundamental political battle, the choice is to enhance that so it becomes effective legislature or to make the representative legislature effective. Those are pretty stark choices.

Let's conclude this interview by returning to the mission and current work of SMMC. What have you and your board set out as priorities for this fiscal year?

We actually have cancelled projects. And we cancelled one board meeting and made another a very short telephonic meeting. Candidly, the last meeting had no substantive items on the agenda.

We are primarily a land acquisition and land management organization-those activities have been seriously affected. But let me be clear, the parks are still open and the trash cans still get emptied. However, we don't have programs in the parks anymore and the ongoing land acquisition activities are in limbo.

I can't tell the board when the funds will become available. I can't tell the landowners who are saying, "We are ready to sell; we are ready to turn our land from development to conservation" when bonds will be available.

This is the kind of uncertainty that makes an organization like ours dead in the water.