By Daniel Weintraub
When Jerry Brown was running for governor last year, he vowed to break the partisan deadlock that had prevented legislators from fixing California’s yearslong budget mess. With his decades of experience in politics, including two previous terms as governor, Brown said he had the savvy it took to bring Republicans and Democrats together to find a solution.
But while candidate Brown warned that his opponent – political novice and former eBay executive Meg Whitman – would require “on the job training,” all of his experience has yet to produce the results he promised. This week Brown announced in frustration that he had abandoned negotiations with Republicans aimed at calling a special election in June to ask voters to extend $11 billion in temporary taxes for another five years.
Although Democrats have the power to pass a budget on their own, with just a simple majority vote, raising taxes or going to the ballot would require a two-thirds majority, so they need to persuade at least a handful of Republicans to go along with their plan.
“The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes, and I believe it is in the best interest of California,” Brown said in statement released by his office. “Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people. Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever changing list of collateral demands.”
Republicans, naturally, see things differently. They believe Brown and his fellow Democrats are blocking passage of the budget by refusing to negotiate with Republicans in good faith. Republicans say the Democrats are too wedded to the state’s public employee unions to act independently on measures that might cut benefits to state and local government workers.
Those opposing views are the same talking points that have dominated Capitol politics for years. And they still rule the day despite a concerted effort by Brown to change the culture and, for a time, the tone of the debate.
Since taking office he has held several forums and face-to-face meetings around the state with government officials, business and labor leaders and other citizens, explaining the scope of the problem and outlining potential solutions.
Inside the Capitol he has met with legislators individually, in small groups and with their party caucuses. Shedding the trappings of the office that his predecessors have insisted upon, Brown has met with legislators in their own offices and elsewhere, often travelling with little security and without the armies of aides upon which other governors have relied.
During one late-night budget vote in the Assembly, Brown set up shop in a small office near the chambers, meeting with rank-and-file legislators to cajole them to vote for the package that he and legislative leaders had agreed upon.
And Brown did achieve part of a solution. On mostly party-line votes, Democrats approved more than $10 billion in budget cuts and fund shifts to address part of what has been defined as a $26 billion shortfall over the next 15 months. Brown convinced his fellow Democrats in the Legislature to vote for deep cuts in health programs, public assistance grants and higher education, hoping that doing so would entice Republicans into putting the tax extensions on the ballot.
But so far that has not happened, and the clock is ticking toward the June 15 deadline for passing a budget and the July 1 start of the new fiscal year. Without those tax extensions, the Democrats will be on the spot to pass the rest of the budget with cuts alone, at least until they can come up with an alternative way to get their tax measure on the ballot.
A cuts-only budget would likely result in deep reductions for the kindergarten-through-12th grade schools, which so far have been largely protected from the latest rounds of cuts. Universities, which are among the few programs unprotected by federal or court mandates, would also be vulnerable to additional cuts, as would local governments.
Republican legislators last week produced a list of 53 demands they were making in negotiations over the tax package, but it is clear that their top priorities are cuts in public employee pensions, a spending limit and regulatory relief for businesses.
Brown said he was willing to deal on those issues, but the differences between him and the Republicans remained significant.
On pensions, for example, Republicans want to put before the voters a measure that would roll back benefits, increase employee contributions to the pension fund and limit the taxpayer’s liability for employees’ retirement. Brown and his fellow Democrats appear willing only to enact reforms aimed at perceived abuses, such as employees “spiking” their pensions with inflated final-year salaries, or government executives pocketing pensions in the hundreds of thousands of dollars, sometimes worth more than they were paid while working.
On a spending limit, Republicans want a cap tied to the cost of living and population growth, with perhaps some easing once the state pays off its debts and builds a reserve equal to 10 percent of the general fund. Some Democrats have suggested a cap that would expire when the temporary tax increases expire in five years. They note that with state revenues having cratered in recent years, programs are starved of funding at the moment, so a spending cap based on this year’s budget would leave services permanently stretched thin.
On regulations, Republicans are seeking changes that would subject new regulations and legislation to stricter cost-benefit analyses, exempt some commercial projects from full environmental review if they are in already-developed urban areas, and prevent last-minute environmental objections from tying up proposed development projects for months or even years. Democrats have not agreed to any of these proposals.
Brown called off the talks, he said, because Republicans were demanding too much, and asking for too many things that either were unrelated to the budget or would make the shortfall worse, including a corporate tax break that costs the state $1 billion a year.
The governor has not said what he will do next, but his options are limited. He could try to place the tax extensions on the ballot without the Republican votes needed for a two-thirds majority, but that approach is legally questionable. He could try to gather signatures to put the taxes before the people via a ballot initiative, but if he does that, the temporary taxes will expire before the vote, so he would be asking for tax increases rather than merely preserving the status quo. That’s a much tougher sell.
In the meantime, Democrats face a June 15 deadline for passing a budget. Thanks to Proposition 25, a ballot measure Democrats backed last year that gave them the power to pass a budget (but not raise taxes) with a simple majority, legislators will also forfeit their pay for every day after June 15 that they don’t pass a budget.
The catch is that the budget they pass does not have to be enacted to meet the new standard. Simply sending a plan to the governor is good enough to keep their pay and benefits flowing. So the newly significant June 15 deadline might not be enough to break the stalemate.
For now, at least, even a governor with 40 years of political experience, including previous terms as governor, secretary of state, attorney general and mayor of Oakland, cannot seem to overcome the polarization that, with a few exceptions, has gripped the Capitol for decades.
Daniel Weintraub is editor of the California Health Report at www.healthycal.org