Californians say they don't want to cut services, but neither do they want to raise taxes to pay for the government programs they are getting now. Gov. Gray Davis and the leaders of both parties in the Legislature have pretty much surrendered to the same irrational impulse. Keith Richman and Joe Canciamilla have not.

The two assemblymen -- Richman, a Republican from Northridge in the San Fernando Valley, and Canciamilla, a Democrat from Pittsburg in the East Bay -- have produced a compromise spending plan that would raise taxes, cut spending and go a long way toward wrenching California back to fiscal stability.

These two lawmakers understand what too few in the Capitol are willing to admit: Californians' appetite for government has outgrown our resources. We must either cut spending, raise taxes or both to bring the deficits under control.
Davis proposed a plan that did both in January, but he soon abandoned it without much of a fight. His Democratic allies in the Legislature want to cut even less than he does, and tax more. Republicans say they won't raise taxes at all. But they are not prepared to spell out, much less vote for, the kind of spending cuts that would be required to balance the budget without new revenue.

Enter Richman and Canciamilla. Frustrated by the partisan standoff, the pair organized a group of moderates from both parties who were willing to at least consider the other side's point of view. They talked and talked, but when Richman and Canciamilla started to get real, the others bailed.

Look at the proposal and it's easy to see why. This is nasty stuff. But it's the kind of thing that will have to be done, at some point, unless Californians, via the ballot, take budget matters into their own hands.

At first blush this compromise budget might seem to tilt left, since it includes a tax increase that Republicans have so far refused to consider. But look more deeply and the plan has much to offer fiscal conservatives. If Republicans would study its elements as a package, rather than obsessing on just one part of it, they might find it quite attractive.

The new taxes are limited to an increase in the vehicle license fee, which Gov. Gray Davis is committed to doing anyway by administrative fiat, and a temporary, half-cent increase in the sales tax. Republicans can challenge the car tax increase in court if they like, and might eventually prevail. The sales tax hike would not fund new services but would be dedicated to paying off bills the state has already accumulated. When the debt is gone, the tax expires.

In exchange, Richman has negotiated for $5 billion to $6 billion in additional spending cuts, which Canciamilla agreed to against the wishes of his Democratic colleagues. The toughest would pare reimbursement rates to doctors who care for the poor by 10 percent (Richman is a physician) and reduce grants to the low-income aged and disabled to the federal minimum. They also cut school funding to the constitutional minimum, reduce aid to local government and demand a 10 percent rollback in state personnel costs.

The spending cuts, in fact, are deeper than they were in a plan offered by Assembly Republicans earlier this year.

"I think a lot of people were surprised by that," Richman told me. "The level of spending on a per capita basis, adjusted for inflation, in this plan is lower than it was in 1998-99." Canciamilla didn't like the cuts, either. But he said it's better to do them now than later.

"It's really a question of making some difficult decisions today versus having to make disastrous decisions next year," he said.

And it's into the future where their proposal stands most clearly above all others on the table in the Capitol. The governor's revised spending plan would leave an $8 billion gap between projected spending and revenues next year. The most recent Assembly version of the budget would pile up $16 billion in red ink by the year after next.

But Richman and Canciamilla would leave only a $3 billion problem in 2005-06. And that assumes that no further cuts are made during the next two years.

The proposal also envisions the kind of structural reform the governor has been talking about but has yet to deliver: a spending cap that limits growth to population and inflation, a rule that only 95 percent of general fund revenues can be spent in a given year, relief from mandates for local government, and a new, less expensive pension system for new government hires. It also calls for reforming workers compensation, preserving the manufacturer's tax credit and ending abusive lawsuits.

These two guys aren't expecting their colleagues to drop everything and adopt this plan. But they've shown what reasonable people, open to opposing points of view, can accomplish. Now it's time for the state's so-called leaders to do the same.