California lawmakers look past the fiscal crisis

In a Capitol where groundbreaking achievements have been trumped by money woes in recent years, state officials are now hoping to broaden their ambitions to more than paying the state’s bills, without breaking the bank. At their disposal is an unusual new resource: time.

That may be the only upside of the fiscal crisis. After lawmakers and Gov. Arnold Schwarzenegger came together on a spending plan in February -- instead of at the end of a hot Sacramento summer -- they now see in the eight months ahead the potential to solidify the state’s fragile water supply, to improve foster care and to make gains on clean energy.

Prison costs, education and jobs also top the list of issues lawmakers hope to pick up that were largely swept aside as Republicans and Democrats argued over the budget.

“I ran for the Senate and I ran to be the leader not just to deal with crises but to actually help set a positive agenda,” said Senate President Pro Tem Darrell Steinberg (D-Sacramento), who has dealt with little but crises since taking his post last year. “My view is, if we can resolve a $41-billion budget deficit, we can do just about anything.”

In many areas, the Democrats who control the Legislature can pass new policy themselves -- with the blessing of Schwarzenegger, a moderate Republican. But they will need a deal with GOP lawmakers to approve a ballot measure to borrow money for the state’s water system.

How much may be achieved rests heavily on voters. The budget -- already $8 billion out of balance, according to new projections -- will completely unravel if Californians reject ballot measures in the May 19 special election that would allow the state to divert money from programs for mental health and preschool programs, to borrow against the lottery, and more.

So lawmakers say they are pinning their ambitions to things that don’t cost much. The Senate is placing any bill that costs more than $50,000 a year in a “suspense file,” where most -- without much suspense, despite the name -- will die.

Assembly Speaker Karen Bass (D-Los Angeles) said she would seek changes to the state’s foster care program that could bring more federal funding to California. One idea she is advancing would provide federal aid for grandparents and other relatives of foster care youth who are ineligible to receive financial aid for taking the children into their homes. Another proposal would seek federal money to help young people who now leave the foster care system at age 18, until they turn 21.

Bass is also proposing a bill that would punish nonviolent parole violators with home detention, drug testing or work-crew duty rather than return them to expensive prison beds. Though money is short, the state cannot afford to stand pat, she said.

“We have pressing issues in California that frankly impact the fiscal crisis,” Bass said. “If we don’t address water [supply problems] and we have a major earthquake, then the fiscal crisis we have today will be magnified by a collapse in the water infrastructure. . . . If we can reduce the number of people that come back into prison, we can certainly impact the fiscal health of the state long term.”

Schwarzenegger has not offered a broad policy agenda for the year. He delivered a sparse State-of-the-State speech in January devoted to the fiscal mess, and aides say that until May he will focus on campaigning for the six ballot measures related to the budget.

But the governor has been itching to revive an expansion of healthcare since early last year, when a $14.9-billion plan for near-universal coverage in California died in the state Senate after a yearlong effort. He also was forced to cancel another cherished priority, his “year of education,” in 2008 for lack of money.

The budget stalemate may have created the climate for progress, Schwarzenegger said.

“I think it will happen that we will get all kinds of things now done because by spending so many months together negotiating, of course you agree and also [build] a certain trust,” he said at a meeting with The Times editorial board last month. “There’s always usually the distrust about the other party and what they think, what they’re plotting. But when you spend that much time together, you get to appreciate the other side.”

The governor’s office declined to specify what he has in mind for healthcare, other than to say that it would have to be “cost-effective and creative.”

But Schwarzenegger appears to be looking to Washington, D.C. President Obama proposed more than $600 billion for healthcare reform in his first budget. On Monday, Schwarzenegger will host the last of five meetings on healthcare organized around the country by the Obama administration. About 500 people are expected to attend at the California Endowment in Los Angeles or at satellite-linked locations in Clovis, Oakland and San Diego.

The need to improve California’s water system is perhaps the biggest issue that lawmakers and Schwarzenegger aides say is ripe for a breakthrough. For several years, competing priorities among Republicans, Democrats, environmentalists, farmers, developers and other interest groups have blocked agreement. The state now is in its third official year of drought.

“I think the need is so critical, it’s finally got to where Democrats in urban areas kind of get it,” said Assemblyman Mike Villines of Clovis, the Republican leader in his legislative house. “We have people in the west side of the [Central] Valley. . . . They’re literally cutting down permanent trees and permanent crops because they don’t have the water to sustain it for a year, and they’ll die anyways.”

Schwarzenegger last year backed a nearly $10-billion borrowing plan for the water system, which voters would have to approve. Lester Snow, his director of water resources, expressed optimism about putting such a measure on the ballot next year.

The components of a deal probably would include a variety of approaches, he said: measures to conserve water, increase the supply through techniques such as recycling and desalinization, revamp the removal of water from the Sacramento-San Joaquin Delta while conserving and protecting the natural habitat there, and building dams.

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michael.rothfeld@latimes.com