Wilson Budget Tricks Do a Vanishing Act

The most generous way to characterize one of Gov. Pete Wilson’s central campaign pitches is that it must be based on faulty memory. Off running for President, he surely has forgotten all those little tricks that were used to create his state budgets. Otherwise, you’d have to conclude he deliberately is trying to mislead America’s voters.

Whichever, it’s obvious that voters in Iowa, New Hampshire, Florida and other states with early presidential contests aren’t getting the full story from California’s governor. This is to be expected in politics, of course, but there does seem to be some natural force that induces a candidate to become more reckless with the facts the farther he travels from home.

National political writers tend to report what the candidate says, but not the truth of what is said. They don’t have the time and, anyway, facts tend to be eye-glazing. So the search for truth gives way to an analysis of tactics.

The Wilson campaign pitch that would never pass a polygraph is his claim of making courageous, deep cuts in government programs.

“We cut the bejesus out of everything except education and public safety,” he recently told the Des Moines Rotary Club. “Talk is cheap. I suggest to you, look at the record. It is the best indicator of future performance”

At Ross Perot’s issues conference in Dallas last weekend, Wilson told the thousands of delegates that “it raised howls of outrage from the special interests,” but “I’ve made deep spending cuts that Washington has never had the courage to make. . . . That’s what our nation needs today--not just talk, but action.”

A new one-minute TV commercial running outside of California advertises Wilson as “the only governor in America to have the guts to cut spending so much that his state budget is actually less after four years.”

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This stuff tends to get awfully complicated, which can suit a politician’s aim of obfuscation. Trying to unravel a state budget is like pulling endlessly on a piece of twine. But the basic facts here are relatively simple.

When Wilson talks about California’s budget, he usually is referring to the General Fund. Fair enough. That’s the main cash account and, this year, represents 75% of the overall $57.5-billion state budget. The General Fund budget is $43.4 billion, which is only a tad higher than the first budget Wilson signed in 1991. (It’s not “actually less,” as the governor’s TV ad claims, unless you use “constant dollars” adjusted downward for inflation.)

So, indeed, Wilson has kept the lid on General Fund spending. But at least $8 billion of his General Fund savings can be attributed to dumping state programs and school financing onto local governments, plus creative bookkeeping for schools. Those howls of “special interest” outrage came from the local governments that got rolled by Wilson and the Legislature.

And the issue here is not whether there was some merit to the state’s actions, but whether they were the gutsy, bone-penetrating cuts portrayed by Wilson.

First, in a 1991 move called “realignment,” the state dumped $2.2 billion in health programs and welfare costs onto counties. The state also turned over tax revenues to pay for the counties’ new burden, but not enough, as it turned out. And Sacramento had rid itself of $2.2 billion in General Fund spending.

During the next two years, the state raided local governments’ treasuries--primarily the counties’--by transferring $3.9 billion in property tax revenues to the schools. This meant the state General Fund could reduce its spending on schools by $3.9 billion.

This clever property tax shift cost Los Angeles County alone about $1 billion, according to Legislative Analyst Elizabeth G. Hill, and is one major cause of its present budget crisis.

A third thing Sacramento did was to give public schools an extra $1.8 billion over a two-year period and count it as an “off-budget loan.” Except for a very small portion, this spending never has shown up as a General Fund expenditure. Ultimately, about 45% will. But for now, Wilson can count it among his “deep cuts.”

That’s what is meant by smoke and mirrors.

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Giving Wilson his due, he and the Legislature have whacked benefits for welfare mothers, their children and the aged, blind and disabled. The General Fund now is roughly $4.3 billion less because of cuts in the Aid to Families with Dependent Children program.

Wilson also legitimately can take credit for bringing California’s state government through a financial crisis, its toughest economic times since the Great Depression. But he did it mostly with tax hikes, bookkeeping gimmicks and passing the buck. He cannot take credit for “having the guts” to “cut the bejesus” out of government spending.