Budget Punt in the Works?

There may be a new dynamic at work in the politics of crafting the California budget, one hinted at in last month’s gubernatorial election. Then, Gov. Gray Davis carried almost all the counties along the coast, while his Republican challenger, Bill Simon, took virtually all of the rest of the state. Will there be an inland-versus-coastal element, in addition to the usual clash of interests and ideologies, in this year’s budget battle?

Before the election, Davis understood that closing the budget gap -- currently estimated at $35 billion over the next 18 months -- would require politically painful choices. His slash-and-slam campaign was largely designed to run out the clock beyond the November elections. Now, he cannot avoid confronting the grim task ahead.

Most newly elected legislators, beneficiaries of term limits or the game of political musical chairs inspired by them, are virtually clueless about how to fix things. Freshman Assemblywoman Cindy Montanez (D-San Fernando), 28, was 17 years old when the last major fiscal crisis hit. First-time legislators attending Davis’ special budget session, roughly one-third of the lawmakers, acted like deer frozen in the headlights of an oncoming truck convoy.

Old Sacramento hands, in contrast, seem resigned. One decried “a complete absence of a sense of urgency” in the legislative chambers. “The Assembly will wait till January,” predicted one Democratic legislator. “We want to see the governor’s budget [which must be submitted on Jan. 10] before we commit political suicide.”

Ideology and arithmetic complicate matters. Closed primaries and safe districts have sent to Sacramento conservative Republicans who are firm in their antipathy toward anything that looks like a tax increase.

The Democratic caucuses have vowed to protect social services by spreading the pain; they want new revenue in addition to spending cuts. Assuming they can keep their own members in line, they’ll need six GOP votes in the Assembly and two in the Senate to rack up the two-thirds necessary for budget approval.

It won’t be easy. Last summer, state Sen. Maurice Johannessen (R-Redding), recently appointed Veterans Affairs secretary by Davis, supplied the one GOP vote needed to pass the budget in the upper chamber. He was termed out and replaced by anti-tax Assemblyman Sam Aanestad (R-Grass Valley). Four GOP Assembly members who supported recent Democratic budgets have been replaced by staunchly conservative Republicans.

The three Republicans who captured Democratic seats Nov. 5, like the lawmakers who were last year’s budget rebels, represent inland California.

It was Democratic pollster Paul Maslin who first posited the increasing political importance of inland California. This is where the state’s greatest growth is occurring. This is where the Latino population is rapidly increasing. By 2010, Maslin said, if present growth continues, inland California will cast as many votes as the Bay Area and Los Angeles County combined. According to the Field Institute, L.A. and San Francisco accounted for almost 50% of the state’s vote in 2000.

These days, inland California voters tend to be more anti-government and anti-tax and less loyal to the Democratic Party than their coastal counterparts. They share many of the characteristics of California’s independent swing voters, who, according to Mark Baldassare of the Public Policy Institute of California, “describe themselves as moderate to somewhat conservative in their politics.”

That may change as more Latinos enter the voting rolls. According to Baldassare, “Latinos are distinct in their strong and consistent preferences for government spending. ... Their liberal positions on fiscal issues stand in contrast to the state’s white voters, who have been inclined to take a hard line against spending and tax increases since Proposition 13.” For inland Republicans, this sets up a potential collision between their party’s ideology and their constituents’ priorities.

How will these demographic and political shifts affect the budget debate?

According to a recent survey by the Public Policy Institute of California, “Two of California’s fastest-growing regions [the San Joaquin Valley and the Inland Empire] ... have low and declining incomes.”

As a result, those areas “have fewer resources” than other regions “to successfully plan for and provide for population growth.” State budget cuts, and their trickle-down effect on local funding, will exacerbate the crunch. Transportation, housing, education and health care are in the budgeteers’ cross hairs.

Can GOP legislators who represent competitive inland districts afford to hold out on raising revenues needed to finance programs their constituents consider important? Will they risk the wrath of Republican party activists for deserting their caucus’ no-new-taxes stand, or hazard the loss of support from constituents who believe their quality of life to be threatened?

At a recent hearing on health-care cuts, Assemblyman Robert Pacheco (R-Walnut) acknowledged his need to “keep an open mind.” He didn’t embrace tax increases, but he didn’t flatly rule them out, either.

On the other hand, will Democrats representing coastal districts commit the tax dollars of their constituents to government services needed by inland California, when their party’s urban strongholds are hurting?

Because of the unprecedented size of this year’s deficit, everyone will be affected by the budget cuts. The issue is who will get hit the hardest. That will pit interest against interest, city against city and county against county throughout the state. It is a recipe for some serious legislative deadlock. Already, lawmakers are looking to punt.

At a recent press conference, Senate President Pro Tem John Burton (D-San Francisco) brought up the possibility of placing an initiative on the ballot that would link tax increases to specific programs. In the next breath, he groused, “This is not a way to run government.”

But piling on more ballot-box budgeting may be the only way this Legislature and governor can dig the state out of its fiscal morass. And if the budget solution comes down to the ballot, it will have to be one that appeals to those swing voters in California’s interior.

Despite being denied the chance to judge their leaders on this critical issue during the 2002 campaign, voters could have the last word in determining the direction of the state, how much we will pay to get there and which Californians will foot the bill or pay the price.