Reading the Governor’s Lips...No New Taxes (but Never Say Never)

SACRAMENTO

Gov. Gray Davis looked awkward dancing around a no-new-taxes pledge last week. He could have stepped more gracefully, but he was in rhythm with political reality.

The Democratic governor was leaving himself wiggle room to raise taxes if the recession unexpectedly persists and the state budget deficit deepens beyond its current $12.5-billion hole.

Never say never has been the prudent politician’s gospel ever since the first President Bush pledged “Read my lips: no new taxes,” then gave in to senior advisors and reneged. The second President Bush now proclaims he’ll raise taxes only “over my dead body”--and he can keep his word because there’s no legal requirement that the federal budget be balanced.

In Sacramento, by contrast, a governor must propose a balanced state budget. He can operate on deficit financing--rolling over debt into the next year, borrowing against future revenues--but must specify how the books ultimately will be balanced.

When short on cash, a governor’s options are to raise taxes, cut spending (Davis proposes paring $5.2 billion) or get gimmicky: Borrow, steal, fantasize (like his banking on $1 billion extra from the Bush administration).

Davis hedged in his State of the State address by only promising that the budget he proposes “will not increase taxes.” And: “I will not advocate raising taxes.”

That sounded too clever by half to many, and it invited Republican sniping: Never said he wouldn’t accept a tax hike, only that he wouldn’t propose or advocate one.”

The governor would have sounded more forthright if he had merely stressed his desire to avoid a tax increase--rather than seeming to waltz around the issue with weasel words.

But Davis did make his point: He’s firmly against raising taxes (even if he did propose raising fees by $143 million).

Moreover, one sentence the governor uttered could trip him up if he ever does try to use that wiggle room. A tax hike, he asserted, “would further burden individuals and businesses struggling to stay afloat in these difficult economic times.”

No Republican opponent could have said it better.

Davis later was pestered by reporters--and Republicans--to embrace a Bush-like pledge.

“Let me say this as clearly as I can,” he said in a conference call. “I don’t think it makes good economic sense to penalize individuals during a recession by raising their taxes.... I don’t want new taxes. I do not anticipate that taxes will be raised.”

The last comment embraced political reality. It’s an election year for both the governor and the Legislature. There’s little chance that liberals--even powerful Senate leader John Burton (D-San Francisco)--can corral the necessary two-thirds majority in each house to pass an unpopular tax-hike bill. Particularly if the governor isn’t advocating it.

So if this is all moot, why doesn’t Davis just take the pledge?

“You know, I have my own style,” he said. “I like to underpromise and overdeliver.... I’ve always felt my best asset was low expectations. People expect too much of me, I’m in trouble.”

Davis’ delivery of his State of the State address certainly exceeded any expectations based on last year’s performance, which was the worst of his governorship. This year’s delivery probably was Davis’ best, despite repeated, distracting introductions of law officers involved in anti-terrorist security.

Last year, Davis stumbled frequently through solid content. It was his first major attack against energy price-gougers, but he seemed out of sync. TV viewers even could hear him chewing ice--crunch, crunch--after long pauses for sips of water.

This year’s delivery of words--even the hokey ones--was smooth. Davis strategist Garry South says that’s because all the little script notations--”point,” “bow,’ “applaud”--were erased from the final speech text. Last year, they confused the governor and caused him to lose his way. This time, he rehearsed the bows and points beforehand in the Assembly chamber and scrapped the written cues.

I reported bum information last Thursday, writing that Burton on the night before the speech was slipped the raw TelePrompTer version, including stage directions. Turns out, what Burton saw was an earlier draft.

Early or final version, Burton was repulsed by Davis’ speech and didn’t show up until the very end. “Traffic and fog.”

The veteran liberal considers it “immoral” that his fellow Democrat proposes to cut spending on the working poor, welfare moms and the aged, blind and disabled.

Burton advocates raising income taxes by $2.5 billion on the wealthiest, but concedes: “To be honest, I don’t see it happening.”

Davis is deftly sidestepping an election-year tax increase.