Election could complicate passage of budget deal

Final passage of the budget pact struck Friday by Gov. Arnold Schwarzenegger and top lawmakers could be complicated by the looming election, as anxious legislators, whose approval ratings have already sunk to record lows, prepare to face voters.

Election-year politics is always tricky. But this year the budget vote drama arrives only weeks, rather than the customary few months, before election day, Nov. 2.

“It’s hard enough to do the sausage-making in the best of times,” said Democratic political strategist Chris Lehane. “It’s incredibly difficult to do the sausage-making with four weeks to go from an election.”

Schwarzenegger and top lawmakers have released no details on the budget accord, but sources close to the talks said the package includes cuts to public education — including the suspension of the state’s school funding guarantee — health and human services reductions, optimistic accounting assumptions and no broad new taxes.

For legislators seeking higher office, or those locked in fierce reelection fights, a vote for such a budget is the last thing they want to cast in the final weeks of a campaign.

“We are making very difficult decisions, every one of which is going to be unpopular to somebody,” said Assemblyman Roger Niello (R-Fair Oaks), who is running in a hotly contested special election for a state Senate seat.

Niello said he did not have enough details about the budget deal to have decided how he would vote, but he would consider supporting the package. “If that creates a liability for me on Nov. 2, so be it,” he said.

This year’s spending plan, for the fiscal year that began July 1, is already the tardiest in modern history. A full hearing on the package, which must close a $19.1-billion gap, is set for Wednesday, with a vote as early as Thursday.

“There’s going to be a reticence to just jump on board,” said Assemblyman Anthony Adams (R-Hesperia), who was threatened with a recall after voting for a 2009 budget pact that included temporary tax increases. “…The closer it comes to the election, the less time you have to do the campaigning to help walk citizens through the complexity of why the budget vote was necessary.”

Adams, who is not running for reelection and said he is undecided on his vote, said there are perils for Democrats and Republicans alike.

“From the perspective of those worried about the cuts, the cuts in here are going to be enormous,” he said. “… And from the perspective of those seeking a no-tax solution, it remains to be seen how the incredible amount of overestimated [budget solutions] checks up against the reality.”

Leading lawmakers expressed confidence Friday evening that they would garner the necessary votes to pass the budget. They spent the weekend briefing their caucuses in a series of conference calls.

California is one of only three states to require a two-thirds vote for approval of a spending plan and for raising taxes. Rounding up those votes in recent years has required marathon sessions of arm-twisting and all-night lockdowns — even after a deal was reached.

Senate Revenue and Tax Committee Chairwoman Lois Wolk (D-Davis) said she was pleased that the budget deal includes a two-year suspension of a corporate tax break that lets businesses deduct losses in one year from taxes paid in another. The move would save the state $1.4 billion in the budget year, she said.

But in exchange, she said, Republicans — some of whose votes are needed to reach the two-thirds approval threshold — forced Democrats to sign off on smaller, permanent business tax breaks, including one for the timber industry, another for companies that underreport their taxes and a third for the cable TV and software industries.

“There will be things in this budget that will be very difficult for any of us to support,” she said.

Other elements of the plan include the sale of state buildings ($1 billion-plus), more optimistic revenue projections ($1.4 billion) and borrowing from other state funds ($3 billion-plus).

Democratic leaders also agreed to make sweeping changes and reductions to the state’s pension system, though they have insisted on waiting to implement any policy overhaul until the state’s largest public union completes its contract negotiations. Those are ongoing, and it is not clear how the issue has been resolved.

The budget negotiators also agreed to erase billions of dollars of the shortfall by assuming that financial help would come from Washington, though it is unclear how much money the federal government might send.

Wayne Johnson, a GOP strategist, said public opinion of legislators is already so abysmal — a recent Field Poll pegged approval at 10% — that “not a lot of [voters’] minds will be changed” by one more unpopular vote.

“I suppose you could go to single digits,” Johnson said.

shane.goldmacher@latimes.com