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Office of the Chancellor / Public Affairs
Wednesday, July 30, 2003
 

San Francisco Chronicle 7-30-03

$100 billion budget keeps state afloat
ANALYSIS: Lawmakers fail to solve problem
Robert Salladay

 

Sacramento -- Exhausted, unshaven and a little ripe after nearly two days without sleep, lawmakers packed up Tuesday and left the Capitol once again without facing the hardest questions about the budget and the state's future.

California's political climate is so unhinged, with an Oct. 7 recall election looming against Gov. Gray Davis and the Legislature's own popularity at record lows, the Assembly and Senate could only muster enough energy to approve another "get-out-alive" budget.

It leaves an $8 billion deficit unanswered -- exactly the kind of fiscal crisis that enraged conservatives enough to mount the recall campaign against Davis. But the political risks of delaying a vote in order to fix this problem were far greater than just getting out of town.

The budget is patched together with Wall Street loans and last-minute deals concocted behind the scenes to squeeze out a few more votes from a handful of Republicans. Davis described the Legislature's effort as "taking care of $30 billion of a $38 billion problem," not exactly a victory cry.

"Given the political volatility, I don't think there was great benefit in having this continue any longer," said Assemblyman Darrell Steinberg, D- Sacramento, chairman of the Appropriations Committee. "Holding out for better would have meant great risk to the state, great risk to people depending on state resources for their employment and services."

Unlike previous budget years, Davis' leadership is on public trial as California prepares for the recall election. A variety of potential replacement candidates undoubtedly will continue to use the fiscal disasters as the central argument to remove the Democratic governor from office.

Davis nevertheless now is free to campaign without California in total collapse around him and media reports tick-tocking every day without a state budget. A protracted fight would have provided Davis' enemies further evidence of his lack of leadership.


DIFFICULT LEGISLATURE
Republicans supporting the recall blame Davis entirely for mishandling the budget and sending California into fiscal ruin. But the past few months, like budget negotiations in the past, showed how uncontrollable the Legislature has become. Each lawmaker, protected by safe districts, comes with their own motives and requirements.

In dealing with 120 members of the Legislature, Davis easily could take a cue from former French President Charles de Gaulle, who once irreverently threw up his hands and declared: "How can you govern a country that has 246 cheeses?"

As the recall election became a reality last week, Davis started injecting himself into the budget debate from afar. In orchestrated events in Los Angeles and San Francisco -- Democratic strongholds -- the governor bashed Republicans for suggesting deep cuts in public services to balance the $38.2 billion shortfall.

The idea was to make Davis look like a leader while simultaneously separating him from actual debate in Sacramento, leaving the Legislature to hash out the details in its own acutely dysfunctional way. He nevertheless was working behind the scenes, personally phoning wavering lawmakers until 3 a.m. Tuesday.


BUDGET SUSPICIONS
Looming over the entire debate was the recall election itself and the general climate of political unrest in California. Without quick approval by Assembly Republicans, the minority party risked looking like it was delaying the budget to advance the recall effort, and that could have backfired.

There is little evidence Republicans wanted to hold up the budget in order to damage Davis, but the suspicion was always there. Assemblyman John Campbell,

R-Irvine, a leading budget negotiator for the GOP, donated $10,000 to the recall effort and signed a fund-raising letter for it.

The state Senate approved the budget Sunday by a larger-than-expected margin of Republican votes, mainly because it didn't contain tax increases they so vehemently opposed. It also included deep cuts in public services Democrats hated.

Republicans won, but it took the Assembly GOP some time to figure that out. They held up the budget for 29 hours so that Republican lawmakers could secure about $300 million in extra funding for local governments and law enforcement.

Yes, that's how the budget ended: A handful of Republicans would vote for the budget only if the state government spent more money rather than cut it.

"It's a little goofy," said an unshaven and bleary-eyed Steve Peace, the governor's finance director, offering an uncharacteristically modest footnote to the most bizarre political season in California history.

Now, there is one thing left undone, despite the modest progress Tuesday.

Davis promised at the beginning of the year that California would finally address its seriously disfigured budget process, which relies too much on sales taxes at the local level and capital gains taxes at the state level. Nothing happened to this promise before lawmakers went home.

Davis instead offered Tuesday "to seek guidance from eminent and well- qualified individuals with expertise in budgeting and financial matters" and create another commission to deal with the problems or demand another special session of the Legislature.


CHANGING PROCESS
Davis also acknowledged the inevitable: The politically risky endeavor of reforming California's budget process may be placed before voters in a future ballot measure. In other words, voters once again may take responsibility where the government has failed.

Democrats already see one structural reform they want: eliminating the power of minority Republicans to hold up the budget vote. Unlike other bills, the budget requires a two-thirds majority, which currently means a handful of Republicans must be coddled. A future ballot measure would reduce the threshold to 55 percent.

Democrats see the current voting threshold -- higher than in 47 other states -- as one of the biggest reasons the current budget is so faulty and so late. The GOP refused to consider any tax increases amid the biggest budget shortfall in state history, as GOP hard-liners were threatened with political ruin if they sided with Democrats.

"You've got a Republican minority that really does control the budget debate here," said Assemblyman Mark Leno, D-San Francisco. "You've got members whose districts applaud them the longer they hold out. I can't change that. A governor being recalled, or not, can't change that."

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CHART:
WHAT THE BUDGET DEAL IS GOING TO COST YOU
-- Higher Education

Community colleges: Fees increase from $11 per unit to $18 per unit.

University of California: Fees have been increased 25 percent

California State University: Fees have been increased 30 percent.

-- Trial court fees

Court security fee: New fee of $20 per court filing.

Trial motion fee: Fees increase from $23 to $33.

Continuance fee: New $100 fee for all civil and family law cases.

Small claims fee: Fee increases from $35 to $60 for filers of more than 12 cases per year. .

-- Fish and Game

Fishing license: Fee for residents increases from $29.25 to $31.25

Hunting license: Fee for residents increases from $29.50 to $31.25 .

-- Vehicle license fees

The budget is premised on more than $4 billion in additional revenue from an increase in vehicle license fees. Fees are scheduled to go up by an average of $158 starting Oct. 1. To figure out how much you will pay, take 2 percent of the price paid for a new or used vehicle, then calculate depreciation by using this table:

Year of ownership: Multiply by this number

1st: No depreciation

2nd: .90

3rd: .80

4th: .70

5th: .60

6th: .50

7th: .40

8th: .30

9th: .25

10th: .20

11th or more: .15

-- Other DMV fees

Identification cards: Cost of DMV-issued cards increases from $6 to $20. Cards will be free for seniors.

Vehicle registration: Fees go up $3.