Budget progress? It’s nil

If anyone cares about the progress of negotiations on the long-overdue state budget -- and apparently few people do -- it can be summed up in three words: polarized, paralytic, pathetic.

There is no sense of urgency on the part of Capitol politicians or the public, although the state is seven weeks into the new fiscal year without a budget and facing a $19-billion deficit.

At a lunch this week with some political operatives across the street from the Capitol, every topic imaginable was discussed -- the races for governor and U.S. Senate, the potential makeup of Congress, the ballot measures to suspend the fight against global warming and legalize marijuana, name it -- everything except the budget. That seemed to be the last thing on these pols’ minds.

Gov. Arnold Schwarzenegger dropped by and I asked him about the negotiations. He suggested that the sales tax should be extended to services as part of any deal and was confident the public would accept it.

Whoa! Where’d that come from? I thought.

Then I remembered: Schwarzenegger actually proposed that two years

ago --recommending a landmark extension of the sales tax to vehicle, furniture and appliance repairs, veterinarian care, amusement parks, sporting events and golf. The idea went nowhere.

And he hasn’t been pressing it lately, either. In fact, the governor has held few meaningful negotiating sessions with legislative leaders. He’s rarely in town for very long.

Schwarzenegger’s budget staffers have been meeting with legislative consultants. But, according to people close to the huddles, the governor’s representatives don’t seem quite sure how their boss wants to balance the budget. Where’s he willing to move?

Meanwhile, most legislators seem preoccupied with their perennial, shameful August political fundraising -- hitting up lobbyists descending on the Capitol at the end of the legislative session, looking like grizzlies grabbing salmon during the spawning run.

The cynical public must feel it has seen all this before, and it has. It seems to have given up being outraged.

“There’s very little public pressure this year, at least as compared to last year,” says Nathan Barankin, communications director for Senate leader Darrell Steinberg (D-Sacramento), one legislator who has been busting his behind trying

to break the budget deadlock.

Aaron McLear, the governor’s press secretary, says: “I sense no urgency” from the public or the Legislature. “And the budget [passage] doesn’t happen until there’s public pressure.

“Everybody’s so used to a late budget, it’s not a big deal anymore.”

Yes, sadly, in 20 of the last 24 years, the state has begun the new fiscal year without a completed budget.

The public should care.

Already the state is stiffing many private vendors who sell to the state. It is delaying provider reimbursements for Medi-Cal care. Same with student Cal Grants.

State Controller John Chiang has been warning that the state could run out of cash in October if a budget isn’t passed by then. That means remedial steps must be taken by around Labor Day. One step would be to issue IOUs instead of real money. That happened last year and made amusing fodder for California bashers.

“Not having a budget hurts our credit rating,” Chiang told the Sacramento Press Club on Wednesday. “It exposes us to the risk of junk-bond status that would force the state to pay billions of dollars in extra interest.

“California would likely be shut out of the [bond] market for a period of time, which would prevent us from building schools and roads ....”

Budget gridlock helps keep the economy down and unemployment high.

But the budget is boring. The public seems to have moved on to other issues. You’d think the pols would be eager to follow, especially in an election year and with their approval ratings already at record depths.

The rhetoric all sounds the singsong same.

Democrats whacked spending by $30 billion last year and aren’t willing to cut much more, especially out of programs for welfare moms, the disabled and the elderly poor. Can’t blame them.

Republicans and the governor refuse to raise taxes again during a recession. They’ve got a popular point.

Both sides need to blink, however. And not only isn’t anyone blinking, nobody seems to know how.

Blame term limits and inexperience.

Blame the two-thirds majority vote needed to pass a budget.

But these obstacles to sound, efficient lawmaking are facts of life this summer.

So these are some things that the governor and legislators need to do:

Forbid their flame-throwing flacks from issuing those incessantly sophomoric news releases that stoke the fires of partisanship.

Lock themselves in a room, bar the special interests and don’t emerge until there’s a deal. Steinberg asked Schwarzenegger to hang around one recent weekend to negotiate, and the governor replied, “It’s not time yet.” It’s now time.

Tweak -- maybe substantially change -- the Steinberg-Democrat plan to raise income and car taxes and reduce the sales tax. Use that as a foundation for compromise. Call it tax reform.

Suggestion: Don’t raise the highest income-tax bracket; take a higher proportion from the lower and middle income groups. They’re not paying their share now but use most of the services.

Another suggestion: Reduce the sales tax substantially and grab Schwarzenegger’s idea of extending it to services.

Adopt Assembly Speaker John Perez’s proposal for taxing the oil that’s pumped from the ground. We’re the only oil-producing state that doesn’t do it. Schwarzenegger once proposed this himself, then dropped the idea.

Give Schwarzenegger the pension and budget reforms he’s demanding as his price for signing a budget. They make sense.

Throw in some regulatory streamlining.

And, yes, cut some more spending.

Everybody blink.

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george.skelton@latimes.com