Battered Budget

When they dared to call his tax-increase plan a tax increase, Gov. George Deukmejian huffed and puffed and threw in the towel. On the rare occasions when the governor is not being too stubborn, he is not stubborn enough. In an outburst of pique, he junked his proposed $800-million emergency revenue plan, pushed the budget mess to the Legislature’s side of the table and said, in effect: If you’re so smart, you do it.

The governor piqued too early on this issue. The result is that the state is approaching the June 15 deadline without a fiscal 1989 budget and with no plan on the table for overcoming the unexpected $1-billion revenue shortfall, which could double by another $1 billion in the coming year.

By whatever name, the governor’s plan to make up for the revenue loss was not a bad one, although it might have been more fair if corrected to fall a little heavier on upper-income brackets. It would have meant an average income-tax increase of only $24 per tax return, or giving back a small part of the governor’s ill-timed $1-billion rebate just last year.

The governor played semantic games by saying that a tax increase was not a tax increase. Deukmejian’s critics shouted in glee that the governor was violating his pledge not to raise taxes and trying to cover it up with fancy words. Deukmejian could not even find a Republican author to sponsor his program in the Legislature. Not exactly a profile in courage from the invisible GOP lawmakers.

The last word from the governor is that if the Legislature was unwilling to make the necessary budget reductions--up to $1 billion worth--he would do it himself. That is, he would wait until the Legislature passed the budget and then decide on his own where to trim with his veto power. That is playing a game of budget-chicken, not responsible leadership. The governor should resurrect his tax plan, couple it with some modest budget reductions and work with whoever has some courage in the Legislature to get it passed and solve the problem. The governor still will have the final say with the veto.

The state budget has been starved repeatedly. Per-capita spending for schools ranks 29th in the nation, and transportation spending is 50th. State and local taxes have been cut nearly one-third in relation to personal income since 1978. The governor, whose byword is competitiveness, is afraid that the merest whisper of taxes will scare off investors. But the shameful deterioration of California roads, schools and services is far more threatening than a minuscule tax increase in an emergency. The asset that counts now is leadership.