The ‘Best’ of All Worlds for a California Politician : Budget: The state has no money, but it keeps on running, which means difficult decisions can be avoided. That leaves plenty of time for fund-raisers.

For California, it is the fifth--going on sixth--week without an operating budget. More than $2 billion in IOUs have been issued. The media crackles with stories about failed attempts by Gov. Pete Wilson and state legislators to negotiate a spending plan.

Tales abound of small-business vendors, stiffed by a deadbeat government, forced to lay off workers or borrow against their homes to meet payroll. Of working mothers threatened by a return to the welfare rolls if state-supported child-care centers run out of money. Of elderly invalids afraid of being caught in the budget crunch.

The job-approval ratings of Wilson and the Legislature are at record lows. A new survey by Voter/Consumer Research shows an unprecedented 91% of respondents feeling that “things have pretty seriously gotten off the wrong track” in California.

In the midst of all this, a long-time budget-watcher sits at a sunny, sidewalk table surveying the bustling State Capitol luncheon crowd. “This is the best possible world,” he muses, for Wilson and the Legislature.

Well, maybe not the best. But despite a lack of money to pay its bills, state government still hasn’t gone out of business. Program cuts remain only threats. Even the decision of big California banks not to cash state IOUs hasn’t caused the financial sky to fall--yet.

As low as the job-approval ratings are, the day after a budget is signed, they’ll probably be lower. As angry as voters are, polls still show their anger isn’t focused. But if enough people suffer tangible harm from budget cuts, there will be no shortage of specific targets.

“Strange” and “crazy” are the two most frequent, printable adjectives used by Sacramento denizens to characterize this year’s budget dance. Outsiders--and some insiders--see a system falling apart. Certainly, things look anything but normal under the Capitol dome.

But it’s also true that this year’s budget crisis is not unlike previous battles--except there are no palatable solutions. Seldom have the institutional, political and economic obstacles to passing a budget appeared so insurmountable, the choices so ugly. Which is one reason why there has been weak incentive for Sacramento politicians to come to closure.

As in other years, campaign money and political clout play dominant roles in the budget talks. This year’s major player is the California Teachers Assn., the largest single contributor to Democratic legislative candidates and a staunch ally of Speaker Willie Brown. The teachers are holding Democrats’ feet to the fire over the level of state aid to schools.

Wilson, with no love lost for the teachers’ lobby and its strong support of his 1990 gubernatorial opponent, is hanging tough for cuts in school funds that are much deeper than the Democrats want or that the teachers will accept quietly. That’s a recipe for impasse.

Partisanship and factionalism, traditional roadblocks to budget compromise, are thriving in the Legislature. This year, argues one lobbyist, “the pendulum that governs settlement will be to the right of last year.” But every time the leaders move rightward toward compromise, they lose a couple of votes on the liberal side. Also, the GOP conservatives’ adamant stands against tax increases and expanding government services continue to give them inordinate leverage over the budget and the governor’s fiscal options. So this year, observers insist, it’s hard to envision any combination of budget proposals that could attract a two-thirds vote of both legislative houses.

Along with the customary policy gridlock, this year’s budget deliberations have underscored the consequences of divided government. Wilson wants to end it in his favor by passing Proposition 165, which would give him new budget powers, and turning out legislative incumbents, more of whom happen to be Democrats than Republicans. A little budget mayhem could persuade voters to throw the bums out--even before voter-approved term limits kick in.

Come November, reapportionment, retirements and electoral defeats could result in one-third of the Legislature not coming back. So this year’s budget battle foreshadows what the huge turnover mandated by Proposition 140 might mean.

Already, a kind of lame-duckism permeates the Capitol. Particularly among departing lawmakers, there is a fiddle-dee-dee attitude toward the difficult decisions legislative budgeteers must make. That makes the job of a weakened leadership more arduous and budget negotiations more tricky.

Ego and ambition have always influenced policy and politics in California. But this year’s budget debate appears to have degenerated into the ultimate game of “King of the Hill,” with Brown vs. Wilson. Compromise is unacceptable. Winning isn’t enough. Bloodied in losing wars over term limits and reapportionment, Brown is not about to let the governor take another round.

Yet, what truly sets 1992 apart is the state’s economic problems. The worst recession to hit California since the 1930s has increased demands for state-funded programs. At the same time, it has shrunk funding options already narrowed by conservative, anti-tax political victories. All of which has forced Sacramento to reconsider its bailout of local governments after Proposition 13 passed.

As the budget battle drags on, the media’s poker games, which periodically break out as reporters wait for news from leadership meetings, appear to allocate state resources (mostly paper clips) more effectively than the Big 5’s budget sessions.

But not all legislators are twiddling their thumbs. They are moving desultorily through thick files of pending bills. There are some 111 campaign fund-raisers scheduled this month. Until there is real hurt and widespread pain, which gets translated into serious voter reaction, it’s unlikely that much will get done in Sacramento. Except fund raisers.