A Hard Landing for Legislative Futurists : Politics: Pete Wilson zaps a bipartisan movement that might have pushed state governance into the 21st Century.

Throughout history, crisis has been the breeding ground for change. California’s recent economic plunge and its offspring, the state budget crisis, presented just such an opportunity, one that could have fundamentally changed the manner in which governments at all levels in California operate.

For a fleeting moment in the spring it looked as though California’s leaders might seize the opportunity and run with it.

What went wrong?

The move toward revolutionary change was hatched in March, as it became increasingly clear that economic and political forces would combine to produce a huge budget deficit with no prospect of improved revenues.

As they had in the past, a core of legislators lobbied the Assembly Democratic Caucus and its leader, Speaker Willie Brown, to take on the budget process as it had never before been addressed. No sacred cows. No presumption of value in existing services. A focus on the needs of the future, not the habits of the past. But this time the Democratic leadership supported the bold new approach.

As Democrats broke into working groups to deal with the budget, a skeptical Republican caucus--similarly minded--began to recognize the sincerity of the Democratic effort. And quietly, they began to conspire with their Democratic colleagues.

Assemblywoman Bev Hansen (R-Santa Rosa) and others weighed in and the momentum for change began to build. Legislators knew the issues; we had discussed them for years.

We would eliminate useless boards, commissions and bureaucracies; consolidate the overlapping functions of others; comprehensively address the Rube Goldberg local-government-financing contraption that had evolved since the passage in 1978 of Proposition 13. And we would protect funding for school classrooms. Most important, we would structurally reform the budget process itself to include multiple-year budgeting. This would allow the state to rationally plan for the future and provide the time to ensure oversight and discipline of the bureaucracy, which is out of control.

An aggressive Democratic investment strategy was developed to exploit falling interest rates and maximize the state’s ability to influence job creation. We would refinance existing debt--much like American families are doing nationwide; invest in the state’s infrastructures--transportation, sewers and communication networks, and, like other states, marry private- and public-sector assets to provide venture capital in targeted job-creating industries.

When Frank Hill of Whittier, the Republican budget conferee in the Senate, publicly embraced a significant portion of the emerging agenda, conspirators began to think that they might succeed.

Then it all came crashing down. Gov. Pete Wilson--with both eyes firmly riveted on the political landscape of the present, and armed with line-item veto power and control over enough votes to block any override--crushed a movement that would have thrust California into the future.

Our plan was, as Ross Perot put it, “the capitalism of the 21st Century.” Wilson and the GOP are still struggling with a textbook view of economics rooted in 19th-Century notions of free markets.

Ironically, many of the bold initiatives proposed, such as the elimination of the Energy Commission and the Franchise Tax Board, were goals long promoted by state Republicans. But why Wilson chose, for example, to target schools for cuts instead of the bureaucracy was a mystery. Was it a lack of understanding?

During the budget debacle, Wilson revealed himself as surprisingly one-dimensional--a man without experience outside of government. To cut his bureaucracy was to cut his universe. Moreover, Wilson recognized neither the goals nor the players--many from a younger generation.

Wilson aligned himself instead with the guardians of the status quo. doing battle with dying dragons of the past, still breathing but no longer with fire.

In the end, Democrats succeeded in protecting funding for schools for one year. But the agenda to fundamentally change state government and prepare California for the future was lost.

But in winning the battle, Wilson may have lost the war. By crushing the revolt, he killed the opportunity for long-term structural change in California’s public sector, which could have given him national stature as a powerful agent of change. Instead, he appears mired in petty politics while the rest of the country is squarely engaged in a nationwide debate that will shape America’s political landscape for the next 30 years.