No More Rabbits in the Hat?

Every summer, there is a Sacramento budget crisis. It is typically a pointless game of chicken, fueled by partisan politics. Welfare mothers will go hungry, one side warns. Taxes will go through the roof, answers the other. Kindergartners will be sent home. The state will go bankrupt. Every summer, it’s the same, and every summer the impasse is resolved.

Well, summer’s here and once again the state of California is operating without a budget. Negotiations are stalled; kindergartners are nervous. This time, though, the game seems strangely different. This time it seems real.

The state, tapped out and facing an $11-billion deficit, has been forced to issue IOUs. Credit ratings have taken hits. Negotiations are stalled, and an unusual nastiness pervades the process. Participants talk through clenched teeth of “trench warfare” and “poisoned water.” They also talk of being scared--for once, not knowing the way out.

There are reasons why it is worse this time. California has fared poorly in the national recession, and tax revenues have fallen. Still, people have kept pouring in, and damned if these new millions don’t expect roads, schools, hospitals, cops. Also, a certain amount of budget flexibility has been lost over time. Finally--most important, many people here contend--the bill at last has come due for Proposition 13.

For a long time, the Great Taxpayer Revolt of 1978 seemed a dud. Yes, a generation of property owners got a nice tax break, and Howard Jarvis landed a bit part in a movie. But in large measure it appeared inconsequential. We were warned of widespread chaos; it did not come. We were promised government would shrink; it grew, as ever.

Proposition 13 didn’t hurt because the state government did not let it hurt. Tapping into a surplus, moving money around, employing all sorts of budgetary gadgets, the state kept itself and local government afloat. This year, the money and tricks ran out. “Finally,” as Assemblyman John Vasconcellos, said, “there was no more moving around to do.”

No one wants to even guess when the current impasse might break. Gov. Pete Wilson, politically damaged last year when budget negotiations led to tax increases, is playing tough. He demands big education cuts, big welfare cuts, and no new taxes. Other than that, he’s all ears.

He also wants more control over legislators. Many Democrats trace his stubbornness to his November ballot initiative. It seeks both to cut welfare payments and enhance the governor’s executive authority over the budget process. The goofier the budget follies seem now, the more willing voters might be later to let the governor try it his way. So the theory goes.

In the meantime, all legislators can do is go through the motions--and hope, as so many do, that Willie Brown can pull a rabbit out of his hat once again. The motions at present involve hacking away at the budget. And every day the rabbit doesn’t appear, the drastic cuts they discuss seem more real.

On Monday, six members of a joint legislative committee worked sullenly through what is now the fourth proposed budget. The scene would have thrilled Jarvis and Paul Gann--if those stubborn old gadflies had lived to see it--for this was the spirit of Proposition 13 come to life. This was a government shrinking itself.

Blunt axes were wielded--take 15% off this program, whack, cut $45 million from that one, whack. No questions asked. No sacred cows. Little Hoover Commission, lieutenant governor’s office, Seismic Safety Commission, Finance Department, fair employment and housing, strawberry advisory board. Whack. Whack. Whack.

“Every one of these can come up here and justify their existence,” one committee member complained at one point. My notes don’t reflect just what program was on the block then, but I do recall it got whacked.

It is difficult to find optimists, but there is hope expressed around here that the current mess might bring reform--not only to the budget process, but to the entire thrust of state government.

“Crisis,” said state Treasurer Kathleen Brown, “presents an opportunity to change.” It also presents an opportunity for mistakes. Certainly, the good old days of a fat state government are gone. It is destined to shrink, just as the Proposition 13 advocates intended 15 years ago. What remains to be seen--and debated--is just how it will be shrunk.

For instance. One thing I noticed at the committee bloodletting was that the gallery was full of lobbyists, all furiously tracking the whacks, keeping score. What I did not notice were any welfare mothers or kindergartners.