Politics Smother Policy

Republican Gov. Pete Wilson has just plain outsmarted Democratic leaders in the Legislature in their battle over the 1998-99 state budget. The odds are growing daily that Wilson and fellow Republicans will win a major, permanent statewide tax cut this year while Democrats will fail to get all the new education money they counted on to boost their campaign prospects this fall. But as so often in the state’s budget deliberations, the outcome of the biggest legislative effort of the year hinges more on electoral politics than on rational public policy.

The fight revolves around allocation of the state’s unexpected $4.4-billion state budget surplus. The governor would spend most of it on a 75% cut in the annual state vehicle license fee, costing $3.6 billion a year when fully implemented. Republicans believe such a tax cut is a compelling election issue for their side.

Wilson would also pump an additional $500 million into education over the minimum spending level dictated by Proposition 98. That is good because more aid to California schools is needed. But how much is enough? The Democrats are arguing for $1 billion above the Proposition 98 floor.

Democrats had opposed any tax reduction. But on Wednesday they released a modest variation of the GOP’s car tax cut--an income tax credit of up to $130 on each vehicle, a total of $1 billion a year. It prudently provides that the cut be suspended if there is a sudden downturn in the economy. Wilson’s tax program has no such provision and could put California back into red ink if there is a slump.

The debate boils down to this: Which is better for California and Californians, a greater share of the surplus for education or for tax cuts? And what kind of education spending? Which tax cuts might make the most sense? Those, sadly, are questions that have not been adequately explored in the political heat of the budget deadlock.

The outcome is likely to be decided more on tactics and brute politics than reason. In this sense, Wilson outfoxed the Democrats in promoting his tax plan in media events staged at auto dealerships to rally political support. Wilson claims a major tax cut is necessary because Californians are overtaxed--a claim that has not been analyzed or challenged in this debate. Actually, the level of state and local taxes has fallen to the middle range of all the states.

Meanwhile, the Democrats failed to counter Wilson’s assertion that they were throwing money at education without assurance it would make the schools any better. After all, grand promises have been made in the past about the salvation of education in California--money from the lottery and Proposition 98, for instance. If Democrats want to build support for their plan they need to document the need for that much money and demonstrate how it would bring real improvement to California schools.

As both sides seek a resolution, they have an obligation not to overcommit the state’s resources and to keep the fiscal integrity of the state uppermost, even if it means scaling back their election-year wish lists.