Our state budget saga continues this morning, with legislators locked into the Assembly and Senate chambers for votes. While this budget deal may still pass, it doesn't seem like we're actually going to achieve the fundamental reforms that California needs to be competitive, to create jobs, and to build an economic recovery.

I don't care whether you're a conservative or liberal, but most people believe that government has to live within its means. Years of double-digit spending increases that weren't backed up by corresponding increases in revenue have come home to roost. Deficits are not a sustainable practice. (This is one of the truths we decided to make as policy at Sierra College, and four years later, the results are clear: we have a structurally balanced budget, and 10.5% reserves as a "lifeboat" to protect the stability of our institution.)

Now, some of my more liberal friends think the solution is simple: just raise taxes so we have enough revenue to keep the spending going. The problem, of course, is that we already have the highest tax burden of any state in the union (highest income taxes, highest sales taxes, and average property taxes), and more importantly, especially in this economy, raising tax rates can actually reduce revenue, rather than raise it.

On the other hand, if our state government was to live within its means, and target its spending to making California competitive, equipping people to create and fill jobs, and driving the generation of sustainable and long-term economic growth, this would actually increase revenue to state government, without an increase in tax rates.

The budget deal on the table is $14 billion in new taxes, $15 billion in spending cuts and $10 billion $11.4 billion in borrowing. Will this deal accomplish those goals and get California growing again?

Here are three questions to ask:

1. Do you honestly believe that raising taxes by $14 billion will bring in $14 billion in new revenue? If so, why is this tax increase any different from all the other tax increases passed in this state in the past, which failed to generate more than a fraction of the revenues they promised? Do you just not believe the economic law that taxes provide a disincentive to economic activity? And how do you justify massive tax increases that will throw people out of work and further depress the economy when we're getting close to 10% unemployment?

2. Do you honestly believe that a "state spending cap" ballot initiative as proposed will actually pass, given that voters would be voting to extend these tax increases for an additional three years by saying yes? Has there ever been a time when people voted for $42 billion in additional taxes in the past? And given that every interest group on the right and left will be opposed for their own reasons, why do you think this will work?

3. $10 billion $11.4 billion of this year's budget deficit will be paid for by borrowing. In the next budget cycle, you therefore start with a $10 billion $11.4 billion structural deficit, which will be compounded by #1 and likely be $15 to $18 billion $16 to $19 billion. What is your plan then, and how can you call this a balanced budget, since it doesn't close the structural deficit?

Bottom line: if this deal won't actually bring in the revenues it promises, borrows money to balance the budget, and does nothing to right-size our spending to get it in line with our revenues, why is this a good budget deal? How will this make California competitive again?

Part of me is conflicted because this is a relatively "good" budget deal when it comes to funding for community colleges. The CCLC, our statewide advocacy organization, is actively pushing this deal. And I firmly believe that community college education is going to be one of the key drivers of the economic recovery by equipping people to start new businesses, create new jobs, and fill those jobs with a qualified workforce.

But I have to say: any budget deal that fails to fundamentally reform California government, right-size spending in line with revenues, and give us a stable environment for creating jobs and opportunity in our state, is a budget that ultimately will do great damage to the incredible value that community college education delivers in driving economic recovery.

The state is going to have to do fewer things, and learn to live within its means. That's going to be painful. At the community college level, one example might be losing state funding for things like non-credit and life enrichment courses, and instead, charging those students self-supporting fees for those kinds of classes.

Above all else, I'm convinced that community colleges will have to shrink our mission to the core aspects of preparing students to thrive in any four-year university in the world, and equipping people with the skills they need to create and fill jobs. These are the parts of our mission that give people the skills and ability to create economic growth — and these are the parts of community colleges that are critical to our state's competitiveness in the future.

I can't really predict whether or not this budget deal will pass. But I can say this: either way, the underlying crisis is far from over. The Governor and legislative leaders need to sit down and negotiate true reforms so that government starts living within its means, and invests in making California competitive, creating jobs and building a golden state yet again.

Correction 11:18PM: The borrowing is $11.4 billion, not $10 billion. "A billion here, a billion there, pretty soon you're talking real money."  -Senator Everett Dirksen

Here is the promised update on the February 10 board meeting.

• This is the first board meeting I twittered. Check it out at www.twitter.com/aaronklein.
• The budget and technology PowerPoint presentations are posted.
• We did our regular evaluation of the College President in closed session beforehand. My feelings about Leo’s leadership at the college are well known, but it struck me before when writing my part of the eval that we are one of the only public agencies NOT whining or panicking about money in this fiscal crisis. Our balanced budget policies have worked.
• The budget presentation shows that as well. 10.5% reserves, so we have a lifeboat in this fiscal hurricane that is still getting worse, from what I can tell. Still balanced, with a $100K surplus. Through hard work, we have achieved the fiscal discipline to preserve the institution for our students, and continue increasing access to college. That’s exactly what we needed to do, and we need to thank VP of Finance Doug Smith and his team for their hard work!
• Technology briefing demonstrated the goals we achieved in 2008, and what the team is tackling in 2009. CTO Gary Moser has led an absolutely flawless implementation of new enterprise software to manage the entire institution (unbelievable that they didn’t have that before — it was like flying a 747 blindfolded). E-mail accounts for all Sierra College students are rolling out this Spring — that’s a huge milestone, too.

Brian Jagger, Chief of Staff to Placer County Supervisor Kirk Uhler, has written an original comedic play called "The Interviews" which opens on Friday, February 27. The play stars none other than…Brian's boss, Kirk Uhler!

This should be fun, folks. Get your tickets at www.PlacerTheater.com (evening shows are $18, matinees are $15). The show is running six times between February 27 and March 7. I'm still trying to re-arrange my schedule to get to one of them, since I'm supposed to be out of town those weekends.

I twittered today's board meeting. Check out the play-by-play at www.twitter.com/aaronklein.

I promise, we’re going to get the web site caught up sooner rather than later, but it’s not like Sierra College Trustees have staff of their own…it’s all on me.

Just posted the documents for today’s board meeting. The plan was to write a blog post after each meeting to give you a little bit of the flavor. At times, the pursuit of perfection seems to get in the way of that, but I’ll just try to do what I can instead.

Are you on Twitter? I find that I'm posting on it even when things are hectic, since you can be short. If you are, friend me at http://www.twitter.com/aaronklein.

On the other hand, I don't know why I don't do short posts here too. Not like there's a minimum post length or something.

• Meeting Agenda
• Contracts (General / Capital Projects)
• Warrants
• Budget Update (Doug Smith, VP of Finance and Administration)
• Technology Update (Gary Moser, Chief Technology Officer)

The Union today covered the efforts I've been making, with the help and support of Trustee Nancy Palmer, to ensure that much of our Nevada County Campus expansion funds stay in our local Nevada County economy.

The challenge is that we still need to deliver an on-time, on-budget project for the taxpayers, but I don't think these two goals are exclusive of each other.

“I am pretty confident we will have a fairly large percentage of contractors’ money stay here at home in Nevada County. The challenge, of course, is contractors in Nevada County are smaller scale than have worked on public education (projects) in the past,” said Sierra College Trustee Aaron Klein.

For the past year, Klein has worked closely with the Nevada County Contractors Association in an attempt to ensure the highest number of local contractors get the work.

A 10,000-square-foot gymnasium, 6,000 square-foot multi-purpose performance facility, and a 3,000-square-foot wellness center for physical education classes are part of the $10 million second phase of the expansion project. Construction could begin as soon as this summer, Klein said.

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