He gave a major speech announcing that he will spearhead the campaign against Proposition 54, the racial-identity initiative. Its a way for him to spend millions he has just raised from Indian casinos in violation of state campaign-contribution limits while continuing to promote himself.
Bustamante will star in the commercials. Its yet another gambit, of course, but arguably legal and what we expect from a career politician handled by Richie Ross, one of the slickest political consultants around. What we dont expect is that Bustamante, a former Assembly speaker, does not know what caused the states record budget crisis. In his speech, he claimed that the power crisis caused the budget crisis.
We had a $10 billion budget surplus and they [power generators] stole it from us, Bustamante declared. Now 50,000 kids cant afford the higher college tuition we have to charge. That is simply flat wrong. The budget crisis was caused by the state spending more money than it was taking in, not by money being stolen from the states general fund by power generators. Thanks to the deregulation scheme that Bustamante co-authored, the generators made off with a lot of money from consumers. But not from the state budget.
After his speech, the Weekly asked Bustamante if he really believed the power crisis caused the budget crisis. He launched into an off-point ramble about the generators manipulating Californias electric-power market. Reminded that that was not the question, Bustamante at first asked the Weekly if we were from California (weve met dozens of times), then offered this: We had to pay substantial amounts of money out of our coffers, in order to be able to pay those electric bills. We had to pay for that. That money came out of the taxpayers.
They gouged us, he said, referring to the generators. They took our money. No matter what you say or how you couch it, those folks took our money. As a result, thats put us in the deficit situation we are in today.
Nope. Wrong answer, Cruz. Not to put too fine a point on it, but the lite guv either is dissembling or just does not know what he is talking about. The power crisis did not cause the budget crisis, as anyone who bothered to read the newspapers during the power crisis knows.
With the utilities essentially insolvent, for a time the state took over the role of buying electric power on the spot market. Fortunately, Gray Davis and other elected officials who do things, such as Treasurer Phil Angelides, realized that the power purchases could create a state budget problem, so they pushed through a plan to sell power bonds, which more than covered the states power purchases, leaving the states general fund intact. Despite what Bustamante quite insistently said, the states power purchases had no effect on the states budget.
It is obvious that Bustamante does not know what caused the state budget crisis, which precipitated the recall election in which he is now participating. He also does not understand the dynamics of the power crisis, merely the seminal event in the unraveling of Gray Davis political standing.