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Cavala: Musings on the California State Budget Deadlock

towashington 089.gif By Bill Cavala
A veteran of over 30 years in Sacramento

Is there an end to the budget stalemate in sight? Apparently not. Two principled positions appear to have emerged that make compromise difficult to impossible.

Republican lawmakers have long attempted to define themselves as the anti-tax party and see this budget as the opportunity to make that label stick. They oppose any tax increases as a solution to the budget. They are indifferent to the suffering that budget cuts bring to those who need state services – after all, they represent the “producer” class that doesn’t. Efforts to pressure them through news stories and editorial efforts have little effect – most are, after all, denizens of San Diego and Orange County where the papers of record applaud their holdout and exhort them to stand firm.

Democratic lawmakers – as represented by the Senate – have arguably reached the limit they are prepared to go in spending cuts. Additional cuts would greatly harm the people most Democrats ran for office to help. Principle is aided by the fact that services to this population are typically provided by friendly unions that would lose jobs as a consequence of service cuts. Editorial support for a tax hike solution is strong in areas that elect Democrats.

The Governor, believing nothing, would seem the most flexible. But his continuing efforts to avoid blame for the deadlock – a failing effort as survey after survey chronicles his decline – leave him a political deer in the headlights of two opposing forces. His silly insistence on a tax cut three years down the road to offset this year’s proposed tax hike is a fig leaf in search of some private parts to hide. The Chamber of Commerce and Cal-Tax have used it to justify their support of a tax – but their total lack of support within GOP circles reveals their political impotence. They speak for moneyed interests, not for the Republican Party.

Perata and the Senate Democrats have signaled one of the ways in which this dispute might be resolved, agreeing to everything in the Governor’s latest proposal except the fig leaf (the 2011 tax cut) and such important ‘details’ in the mid-year correction concession as the source of the revenue estimates that would trigger the authority. The Governor is stupid for not completing this deal with the Senate – which probably would include the long-desired overtime pay exemption for Silicon Valley. With the Governor’s support, Perata would have a fighting chance to add Correa, Maldonado and Battin to produce the necessary votes to pass the budget and enabling legislation.

With the Senate adjourned and the Assembly Democrats publicly acknowledging their willingness, on a daily basis, to acquiesce in the deal, the Republicans in the Assembly would be isolated. That in itself would mean little unless the Governor was willing to side against them in general or in particular – asking the candidates in the open seats (10, 15, 26, 30, 78, 80) to sign a Schwarzenegger pledge to vote for his budget in December, and endorsing the Democrat against the Republican that refuses to such a pledge. The private entreaties of these candidates caught in the middle to their putative colleagues in the Assembly might just exert enough leverage to force them to support the budget. Six fewer Republican Assemblymembers in December would have a similar effect.

Such action would, of course, eliminate the “middle” as a hiding place for the Governor. He would be reviled by the conservative ‘wing’ of the Republican Party. But, then, he’s reviled now, so that’s not losing much.

The Governor’s final option isn’t principled. It would be to flip-flop yet again, and accept more borrowing and more deficit spending to paper over the cash shortfall. But even this would not immediately solve the problem – Democrats would insist on restoring cuts previously accepted if borrowing were OK’d. Republicans would hold out for more cuts (as the Assembly Republicans are currently) to minimize the future problem that borrowing brings. Senator Perata, who had hoped to leave a balanced budget as his legacy, will be far less tractable in the sidebar negotiations if he has to swallow more deficit. The media will castigate everyone for irresponsibility, saving the brunt of the criticism for the Governor.

In the Assembly, Minoritiy Leader Villines might seize the opportunity to negotiate a “more debt – less cut” budget with Speaker Bass (whose caucus cares primarily about the cuts). This avoids the hated ‘tax increase’ and would allow the Assembly to get-out-of-town leaving an unhappy Senate with the option of agreeing and placing the blame on the Governor’s failure to enforce discipline within his own party.

Perata’s anger would not extend to an ability to keep the Senate in session. A papered over deficit with an adjourned Assembly would pass the Senate in short order.

Which door will the Governor choose? The Tiger…or the Tiger?

Bill Cavala was Deputy Director of the Assembly Speaker’s Office of Member Services where he worked for over 30 years. He attended undergraduate and graduate school in the 1960’s and received a doctorate in political science at UC Berkeley. He taught political science at UC Berkeley during the 1970's while he worked part-time for the State Assembly.

Cavala left teaching at UC Berkeley for Assembly Speaker Willie Brown in 1981 until his tenure as Speaker ended in 1995, and he has worked for his five successors as Speaker. He now manages election campaigns for Democratic candidates.

Posted on September 06, 2008

Comments

Here's the obvious solution. Qualify two constitution amendments--one, lowering the vote for a budget to a simple majority, and two, raising taxes only one the wealthy (by an increase in the top tax rates). It would take about 6 months for
these to get through the entire initiative process, so count on 6 months (March).

Do the following also. Get Swartznegger to agree to call a special election. If he won't agree, add a recall against him, which would force a special (he will call the special rather than suffer through the ignomy of a recall). Then, both house pass a "contingent" budget--that is, contingent on the revenue increases. If the revenue increases are not forthcoming (by an affirmative vote of the people), the contingent budget would specify cuts such as the Republicans have been suggesting, particularly for schools. This would probably mean an end to all inter-scholastic athletics, for example.

My feeling is that both of these initiatives will pass, but the Democrats only really need one to pass to be effective. If the budget can be passed by a majority, program allocation rules can be modified to disadvantage districts where the representatives did not support reasonable revenue enhancements (this type of reallocation from urban to suburban/rural districts took place when the Republicans took over Congress in 1994). If the revenue-enhancment measure passes and the majority rule does not, then there will be enough revenue to fix the budget for the forseeable future.

It is time for Democrats to realize that the people are on the Democrats side and appeal directly to the people. This is one way to do it.

Posted by: publius at September 6, 2008 01:17 PM

This is for all those "anti-tax party" idiots in S.D. and O.C. and where ever you may be slithering around. If we that are a little less fortunate are willing to have our taxes increased to meet the needs of our State, then why should you? This isn't about money, it's about a bunch of heartless egotistical bastards sitting back and laughing about the damage they can create . May GOD have mercy on you and forgive you for you ignorance and lack of compassion.

Posted by: James at September 6, 2008 01:25 PM

As a registered republican, i am supper happy that "republicans" are doing what they got voted to do and that is to represent us the republicans. Why should I the "republican" be paying more taxes just so the "democrats" could provide more social service to the poor. To all of the "democrats" that are reading this, it seem highly likely that no budget will be passed till minimum November. As such, get comfortable as this seems to be a long ride.

Posted by: Republican at September 6, 2008 07:24 PM

Times are tough. Sorry, there's no more money to give. The so called wealthy already pay over 50% of the revenue utilized (without using many of those services). Its unfair, and about time that stopped. Shucks, I guess the poor will just have to pay for it themselves, or go without.

Posted by: Guy Montag Doe at September 6, 2008 10:53 PM

If you make 45K in CA (YOU) are in the high tax bracket.
It not the rich getting slammed it is the Joe average worker. NO NEW TAXES!
CA has the highest taxes of any state. Highest Gas tax of any state. Highest paid teachers of any state. Just say no. No to higher taxes!

Posted by: Jeff at September 6, 2008 11:44 PM

Ok, so now we what 67 days passed due to pass the budget and the economy is getting worse, and worse, out there as the days go on. You know what cracks me up about YOU republicans, YOU are welcome to escape to your conventions and complain about how the economy is looking upward and everything is fine. WRONG!! People are losing there jobs left and right, health faclilities are closing down because there is no money to pay the building to keep it going and its getting worse and worse! I do not know how to stress it but if it means to up 1% in tax increase we just need the budget passed so things will get better. This is rediculous!!

Posted by: Erik Leon at September 7, 2008 05:30 PM

I read most of the comments and hope that some of you never ever run for public office because, your comments sound so childish and selfish. My job and the jobs of many more Californians are on hold because the budget has not been resolved. Many of us have families to support. Both parties need to put there pride to the side and focus to resolve the budget. The Governor should remember his pledge that he made when he was elected. That the budget would be balanced on time. We need to pray for our leaders to resolve the budget by working together.

Posted by: Jesus Alvarez at September 8, 2008 01:25 AM

Very simple, make the cuts and sign the budget! End of story.

Posted by: Jeff at September 8, 2008 04:50 PM

Republicans, democrats. All of them just care about being re-elected, and they would do anything to stay in power. We are all just pawns in their worlds. We need a third party that can clean up this mess. This State will be a third world type of life in a couple of years.

Posted by: Dan at September 9, 2008 07:56 PM

I have been a registered Republican since I was 18 and an independent person my whole life, I'm 43. I have been self employed for just shy of 11 years and work very hard for my 50 to 60k a year that I earn. I have seen many people in state, government and county positions that don't pull their weight. I believe that if all of the state agencies and everyone else related to the budget would be productive and do their jobs then it would be easy to pass an acceptable budget in a timely manner. Get rid of the losers and time wasters. It's our tax dollars that are paying their way. If I don't perform I don't get paid.

Posted by: Tim at September 18, 2008 07:04 PM

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