NEWS ANALYSIS : Wilson, Leaders Fail Budget’s Political Lesson

Gov. Pete Wilson and legislative leaders assume a position Monday that most had been determined to avoid--squabbling over a budget package well past the start of the new fiscal year.

They thought they had learned from last summer, when then-Gov. George Deukmejian and the Legislature fought over a budget for the entire month of July and paid the political price with loss of public esteem. That protracted gridlock, many politicians agree, helped generate votes for Proposition 140, which imposed dreaded term limits on legislators, sharply cut their staffs and scuttled their pensions.

So far, the new governor and this Legislature are not in as deep a hole, but they clearly are in an uncomfortable predicament one week into the new fiscal year without a budget.

Just one week ago, on the eve of the new fiscal year, a confident Wilson sat in his office and talked to a reporter about the diminishing returns of a budget settlement the longer negotiations drag on past July 1.

“The situation deteriorates rapidly and the hole gets deeper faster,” he said. But, the governor added, “it is important to get it right.”

As it turned out, Wilson--egged on by corporate interests and recalcitrant Assembly Republicans--then was gambling that he could finesse from the Legislature both a final $2.2-billion tax increase needed to help erase a $14.3-billion deficit and an unrelated “reform” of the workers’ compensation program. So far, he has lost the bet and it already has cost him on-time enactment of the budget.

The deal legislative leaders thought they had struck with Wilson has collapsed--they accuse him of reneging--and new negotiations begin Monday. Thanks to parliamentary maneuvering by the Assembly, the governor has been given a reprieve until July 16 to sign or veto the $56.4-billion budget that was passed June 20.

For months, according to Senate President Pro Tem David A. Roberti (D-Los Angeles), “the most important thing” in the view of the Legislature “was to move--to get these things done, for the sake of the people’s confidence in their government, for the sake of the institution of the Legislature and to ease the people’s acceptance of the (tax increase and program cut) medicine we were about to force them to take. It would have been easier done with dispatch than after a knock-down, drag-out crisis.”

Senate Republican Leader Ken Maddy of Fresno strongly agrees.

“I keep telling people that two days after the budget passes everybody forgets it,” he recently said. “People don’t know what’s in it. Later, when they have to dig some for higher taxes, they may think about it for awhile, but that passes. What they do know about is us sitting here for weeks not getting anything done. . . .”

That places Maddy in a position directly opposite that of his Assembly counterpart, Republican Leader Ross Johnson of La Habra. In fact, much of the dilemma faced by Wilson and the Legislature stems from the governor’s bizarre relationship with Johnson and most Assembly Republicans. The GOP governor and the GOP Assembly leader have been on opposite sides of most budget issues, particularly tax hikes.

“I can’t think of another time when a chief executive has had to force through a budget without having a floor leader in the lower house,” a frustrated Wilson said. “Listen, you don’t see Bob Dole (the U. S. Senate Minority Leader), you don’t see the (House) Republican leadership. . . .” He didn’t complete the sentence and didn’t have to.

The burly Johnson responded heatedly to a reporter: “With all due respect, I wasn’t elected to make governors happy. I was elected to represent my constituency of North Orange County. And I was elected Republican leader to represent the views of the majority of the members of my caucus. I think I accurately do both.

“And sure, I want to cooperate and work with the governor of my own party. That’s a part of the job as well. But not at the expense of my conscience or constituency.”

Therefore, Johnson said, “I’m going to lead by example: My example’s going to be to vote ‘no’ (on many Wilson proposals).”

Ironically, Assembly Speaker Willie Brown (D-San Francisco) is the person most responsible for pushing the governor’s spending and tax proposals through the Legislature--constantly talking with Wilson by telephone from the rostrum, choosing the most strategic moments for floor showdowns, delivering Democratic votes and even some Republicans.

Wilson said his relations with the powerful Democrat have been “pretty good. We have been candid with one another. Apart from a little mild posturing and a few shots, I think essentially he has been very realistic about what could be done and what could not be.”

One issue Brown--as well as Roberti and Maddy--do not believe should have been inserted by Wilson into the final budget negotiations is workers’ compensation. Holding up the budget for workers’ comp “reform,” the Speaker said Saturday in a radio address, “is a disservice to the people of California who expect their budget to be passed by the (July 1) constitutional deadline. And it is a slap at Democrats who have worked so hard to meet that deadline.”

An angry Roberti, whose opinion of Wilson soured last week after a monthslong friendly relationship, declared Wednesday night as negotiations collapsed: “The governor has got to start exerting some discipline over his party in the Assembly. At some point, you can’t just get votes out of them by giving body massages. . . . The governor of California is not powerless. If he can get the Democrats to go along with him, why can’t he do it with Republicans?”

Johnson’s explanation, said emphatically and slowly for emphasis, is that “the Democrats were delighted to get any kind of tax. They haven’t met a tax they don’t like.”

The strained relationship between the governor and his party leader in the Assembly has led to creation, in effect, of a GOP co-leader: Assemblywoman Bev Hansen (R-Santa Rosa). She recently has been conferring separately with Wilson on behalf of the minority of Republicans who, under certain circumstances, might be willing to vote for a tax hike. And it is these Assembly Republicans who are insisting upon workers’ comp “reform.”

“We’re voting for some things that under normal circumstances we wouldn’t vote for and the governor wouldn’t be proposing,” said Hansen, a rare Assembly GOP moderate, referring to the $5.2 billion in tax increases already passed. “But these are not normal times right now. Our only other option is to pretend like we’re not here and go on vacation--and not be responsible.”

That is precisely what Wilson thinks most Assembly Republicans have been doing.

“There are certain people up there (in the Assembly chamber) who are never going to vote for any tax because they are afraid to,” Wilson said, seated in his ground-level Capitol office. “They are afraid of a challenge in the primary (election). It’s very easy for them. I mean, the easiest possible thing to do in politics is to say ‘no’ to taxes and let other people vote for them. It doesn’t require anything. It allows you to demagogue rather easily.”

And yes, Wilson conceded, as a U. S. senator he did vote against tax increases being pushed by Republican presidents. But he also voted for some.

Actually, one of the motivations for Wilson’s recent flip-flop in support of an income tax increase for the highest earners was fear by him and business interests that Democrats, if they failed to win passage of such a bill, merely would sponsor a more drastic “soak the rich” ballot initiative in next year’s elections.

“We want to keep the damage above the waterline,” said California Chamber of Commerce President Kirk West, who helped persuade Wilson to drop his support for proposed utility and telecommunications taxes in favor of increasing the income tax rate, which the governor long had opposed. West was afraid that utility taxes would be hiked now by the Legislature and income taxes raised next year by the voters.

It is clear that business interests and Assemblywoman Hansen have become increasingly persuasive with Wilson as Johnson, in effect, has abdicated the minority leader’s traditionally influential role with a governor of the same party.

Further complicating the Capitol’s political quagmire is that while Johnson’s relations are lousy with Wilson, they are much worse with Speaker Brown. At one particularly heated “leadership meeting”--a negotiating session between the governor and the legislative leaders--Wilson came close to physically intervening while Brown and Johnson shouted at each other.

But despite all the quarreling and setbacks, Wilson as of last Sunday was saying that he felt “very good” about what already had been passed.

“We have achieved most of what we set out to achieve,” the governor said. “I’ve gotten far more reforms than (Assembly Republicans) have ever dreamed of. And I did so, in part, because I was honest enough to start from a position which conceded the reality that you couldn’t do it all by spending cuts, that you had to do the rest by taxes.”

But that was a week ago. Since then, Wilson seems to have boxed himself into a corner by linking passage of a the final budget-balancing tax increase with some “reform” of the workers’ compensation program. And Speaker Brown, this time, is telling the governor to forget it.