Davis a Centrist? Watch the Bottom Line

If you want to know what’s going on in politics, follow the money. If you want to know what kind of governor Gray Davis is going to be, follow the budget.

Democrat Davis campaigned as a centrist and has pledged to govern as a centrist. He has spent 24 years in public life. Yet many political insiders readily admit some uncertainty as to where the new governor will lead the state. Much of the speculation centers on management style, ideology and political IOUs--who will get what among Davis’ major supporters. Each of these factors will impact the way Davis handles his job. But money always has determined and always will determine policy.

There’s worried speculation--particularly among Republicans and business interests--that Davis could “give away the candy store” to the interests that were the bedrock of his campaign support--trial lawyers, teachers, public employee and other unions--even before he rose from the political dead to win the Democratic primary. But the legislative analyst recently reported that a potential $4-billion budget surplus could wind up as a deficit of $1 billion; a Department of Finance scenario is even more dire. Said Davis, “There’s not much left in the candy store.”

Indeed, a budget shortfall could provide a political blessing in disguise for the new governor. Less money makes it easier for him to rein in liberal Democrats, champing at the bit after 16 years of tight social welfare spending under GOP governors.

However, red ink will also put at risk Davis’ promised education initiatives. Whether he presides over improved test scores will be an obvious yardstick by which voters can judge the success or failure of the new governor’s first term in office. But programs to lift academic achievement take money. In tight budget times, that means a shift of funds from other programs or--shudder--a tax increase.

Davis’ early moves give few indications that his key supporters are going to win--or lose--everything they want. The appointment of former state Sen. Gary K. Hart as education secretary can be read as a signal to the teachers’ union and their ally, Supt. of Public Instruction Delaine Eastin, that school policy control will sit firmly in the governor’s office. Hart is a savvy expert in the field who has sometimes been at odds with the teachers’ agenda.

On the other hand, Davis named Rick Simpson, a former lobbyist for the California Teachers Assn., as his legislative secretary. That means the teachers’ union will have a close ally as the governor’s chief policy negotiator with lawmakers.

Davis’ appointment last week of Tim Gage as director of finance underscores the new governor’s establishment approach to policy. Gage has held several key fiscal staff positions in the Legislature; most recently he was chief budget advisor to the Senate president. His expertise is highly respected on both sides of the legislative aisle.

Throughout the campaign, GOP candidate Dan Lungren characterized Davis, who served Gov. Jerry Brown as chief of staff, as nothing short of the premillennial reincarnation of “Gov. Moonbeam.” No state capital denizen believes that. Davis is portrayed as “cautious,” “methodical,” “pragmatic,” “focused.” These are adjectives not often used to describe his former employer; they do, however, offer a clue to Davis’ style of governance.

Davis ran Brown’s gubernatorial shop and may be reluctant to let anyone else take control this time around. The new governor has divided the duties of chief of staff between two top aides, signaling the likelihood that Davis will maintain his penchant to hold close decision-making authority. Betting is that he will maintain a deliberate (read “slow”) pace of implementation.

Davis has long been sensitive to the power of media; his time in Brown’s operation taught him the value of image, and he’s built his own politics around it. Californians may not see Davis riding around in a blue Plymouth like his former boss, but his will be a governorship steeped in all kinds of symbolism.

Davis announced that he would turn back 5% of the recently increased governor’s salary, calling it “an important symbolic step” in light of a looming budget shortfall. During the campaign, Davis called the pay hike, recommended by a state commission, “unthinkable” unless rank-and-file state employees got their long-delayed raise. He now dubs the state workers’ raise “problematic.”

Still, the State Employees Assn. will have a friend in court. Davis on Monday named Steve Smith--the association’s lobbyist for nine years--to head the Department of Industrial Relations.

On his postelection victory lap, Davis promised a San Diego crowd, “I will govern from the center, taking ideas from the left and the right but forging new coalitions so we can move together.” But what does that mean?

As Vice President Al Gore told the Democratic Leadership Council, “There’s a difference between using the rhetoric of the center and governing from the center.” And Californians won’t really know what a Davis administration portends for the state until after April 15. That when the state’s tax receipts come rolling in and the rhetoric of the campaign slams hard up against the reality of money.