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| Office of the Chancellor / Public Affairs |
Wednesday, July 16, 2003
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Sacramento Bee/7-16-03 Peter Schrag: In the budget battle, will the winner be Norquist? |
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| As things are now going down, the most likely "resolution" of California's budget standoff is a deal that would paper over the state's $38 billion deficit with a combination of severe spending cuts and borrowing. Which is to say that the state's no-new-taxes Republicans have won the battle, if not the war. If this deal is made -- still not a sure thing -- California's ability to fund good schools, decent health programs and a long list of other services normally associated with modern societies will be eviscerated by a string of deficits, not only for the coming year but for as far ahead as the eye can see. That's pretty much the scenario that the Bush administration and the GOP-dominated Congress are imposing on the nation as a whole. It's the agenda of tax-cutters such as Grover Norquist, who runs the far-right Americans for Tax Reform and who is joined at the hip to Karl Rove, President Bush's political "boy genius." Norquist says he wouldn't mind seeing a state or two go bankrupt to teach them all a lesson. It employs the tactics that the Club for Growth and other GOP conservatives have deployed against Republican moderates such as Sen. Olympia Snowe of Maine, who resisted the most extreme of the administration's tax cuts: Challenge the deviants in the primaries, as Jim Brulte, the GOP leader in the California state Senate, a man once regarded as a moderate conservative, has threatened to do here. The deal makers in the state Senate and in Gov. Gray Davis' shop argue that the attempt to raise taxes is already a lost cause and that since the state is still spending at last year's levels, every day of delay costs as much in forgone savings as it would get from the half-cent sales tax increase many Democrats are still holding out for. For some of those deal makers, moreover, the impending capitulation to a political minority in the Legislature is silver-lined with a Maoist hope: If the budget is painful enough, maybe Californians will begin to understand that there's an unbridgeable gap between the services they expect and what they're willing to pay. Maybe it would end the convenient myth that if only government were less wasteful, it could manage fine with the money it has. If things get worse, maybe they'll get better. Maybe. As one of the governor's strategists sees it, because nearly all seats are safe for one party or the other, it's in the March primaries where virtually all of California's legislators are chosen. That means that politicians will feel freer to vote for responsible reforms next year, the normal election year, than they do now. And so, according to the strategy, once the grim deal for the 2003-04 budget is approved, the state can move on to make the crucial -- so-called structural -- fixes that Davis had made a pre-condition for this budget, but which he obviously won't get. Those revisions include modifications of at least portions of Proposition 13's property-tax limitations, to generate more revenue from taxes on commercial property; changes in the Proposition 98 school-funding formula; and creation of a reserve mechanism in bumper revenue years. A pending ballot measure would also lower the margin needed to pass a budget and raise state taxes from a two-thirds majority in each house of the Legislature to 55 percent. But since much of the 2003-4 budget deal is being cooked by Steve Peace, Davis' director of finance, the man whose "death march" brought us California's misbegotten 1996 energy deregulation package, and since its proposed pea-under-the-shell tax swaps, borrowings, rollovers, and other devices make it almost as impossible to understand, this seems like déjà vu all over again. Is there really ground to hope that after years of irresponsibility and indifference, California's legislators will suddenly have a collective spell of political maturity? Some people have privately suggested that the best chance for that would be for Davis to be recalled and to be succeeded by a Republican who, like Ronald Reagan in 1967, agrees to a huge tax increase, arguing that here is no other way to deal with the mess he inherited from his predecessor. But the legislative Republicans of 2003 are not the Republicans of 1967, or even those of 1991, some of whom, in similar circumstances, agreed to Gov. Pete Wilson's combination of spending cuts and tax increases. What's certain is that there is no way to make a $38 billion deficit go away without some combination of monster cuts and revenue increases. If there are no new revenues, those cuts will be that much greater, not only in the short run but, because of the cost of repaying the accompanying rollovers and borrowing, for many years to come. There was a time some 40 years ago when California's services and government were national models. That the most hopeful strategy now is to make the state hurt enough to confront its governmental mess is one measure of how far we've sunk. |
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