THE STATE : Two Democratic Powers Adjust to a World of Diminishing Clout

In the 1994 elections, a number of major Sacramento players, especially Democratic loyalists, suffered stinging defeats. Were their setbacks just paper losses? Or when it comes to future policy formation, have these interests truly lost their influence?

In any political battle, whether at the ballot box or inside legislative halls, there are significant policy stakes involved in who wins and who loses. That is why groups invest in politicians who will champion their causes. For some high-rolling interests, California’s political stock market has behaved more reliably than Wall Street. But like economic ventures, political investments can sour.

Few groups have rolled higher in campaigns and ridden higher in Sacramento than teachers and trial lawyers. Both have been longtime Democratic allies and contributors. And despite continued opposition from a string of Republican governors, both have used their coziness with Democratic lawmakers to assure their clout in the Capitol.

The political fortunes of these powerful interests now appear to be at risk. Both trial lawyers and teachers backed Kathleen Brown’s unsuccessful bid to be governor. Meanwhile, GOP gains in the Legislature threaten their long-term interests there.

The 1992 budget battle showcased the power of the California Teachers Assn. The group held its Democratic allies in line even as a determined Gov. Pete Wilson’s pressed his proposals to cut school funding. The result was a 63-day stalemate.

This year, Wilson’s budget fully funds Proposition 98 inflation and enrollment growth and adds $61 to per-pupil spending. But this increase has more to do with Wilson’s political arithmetic than with CTA muscle. As always, a two-thirds vote is required to pass a budget. Wilson again will have to deal with CTA loyalist Willie Brown and with other teacher-backed Democrats to amass enough Assembly votes. That means no lines will be drawn in the sand concerning education funding, because if Wilson cares to keep speculation about his presidential ambitions perking, he won’t want to risk another impasse in the run-up to the primaries.

Policy is easier to parlay. The governor can get a lot of political mileage out of merely talking the popular talk. And if the Legislature blocks him, he can turn to the initiative process to move his programs--and, not coincidentally, reach out to middle-class voters.

Wilson used his recent inaugural and State of the State addresses to lay the groundwork for such a political strategy. “It’s time to stand up to the special interests,” he proclaimed, launching a frontal attack on the Democrats’ political support system. In so doing, the CTA took a double hit: Wilson wants to abolish tenure and to institute a system of merit pay for teachers.

The teachers are not without clout in high places. Democrat Delaine Eastin, elected with CTA support, appears to be charting a role as an activist superintendent of public instruction. Although she has indicated agreement with some of Wilson’s education proposals, she’s solidly with the teachers on key budget matters and such critical issues as tenure.

In his State of the State Address, Wilson also took direct aim at the trial lawyers’ legislative agenda. In past years, the California Trial Lawyers Assn. (CTLA) has been able to stymie efforts by business and insurance groups, and their GOP allies, to reform tort law, including caps on jury awards and attorneys’ fees. The trial lawyers have seldom been able to flex their legislative muscles when it comes to floor votes. This is especially true in the Senate, where a coalition of Republicans and conservative Democrats can pose a real threat. So CTLA has had to rely on Brown and liberal Democrats to bottle up legislation in committee.

In the current business-friendly climate, and with increased numbers of Republican and moderate-to-conservative Democratic lawmakers, it will be harder for the trial lawyers to maroon unfavorable bills in committee, particularly if Brown and the Democrats come out on the short end of the current Assembly leadership battle.

Still, the teachers and trial lawyers cannot be counted out. They hold gilt-edged resources--money, motivation and a large and active constituency. They are savvy about the ways of Sacramento. They can hedge their bets and spread their risk by shifting their investments around. Money that went to Brown and Assembly Democrats may now go to Senate President Pro Tem Bill Lockyer and his Democrats, a testament to the increasing power of the upper house. And when the CTA and CTLA can’t get want they want out of Sacramento, they know there’s always the initiative process.

What’s the lesson? Economic markets rebound; so can political fortunes. But to survive a crash, it’s as important to be street smart in Sacramento as it is on Wall Street.*