Simon and Davis Stall for Budget Advantage

On the spring day Gov. Gray Davis issued his state budget, Republican rival Bill Simon called a news conference to denounce the proposal--hours before it was even released.

Since then, Simon has refined his criticism. Stumping across the state in the governor’s race, the GOP hopeful has relentlessly picked apart Davis’ spending blueprint, assailing him for cuts in everything from farm worker assistance to local police aid.

But in the seven weeks since the Democratic incumbent produced a plan to close California’s $23.6-billion budget gap--something the state Constitution requires him to do--Simon has yet to say how he would solve the problem. It’s not his responsibility, he says.

As Monday’s constitutional deadline for a budget came and went, with lawmakers haggling, Davis and his main rival continued to pursue similar strategies: stall, and hope to get by with as little pain as possible between now and Election Day.

The history of California budget politics suggests that will probably work for both of them.

Voters are notoriously inattentive to events in Sacramento, unless those events start to impinge on their personal lives--say, if Grandmother gets evicted from her nursing home, or if dialing 911 gets no response. Most analysts in both parties doubt the impasse will reach that critical stage.

“I just never have heard of a politician in California losing an election based on the budget,” said Tony Quinn, a Republican strategist and 30-year student of state politics, who predicted “the whole thing is going to be magically resolved by smoke and mirrors”--accounting tricks, spending delays, bond sales, pension adjustments and the like.

The massive deficit obviously poses much greater political peril to Davis than to Simon. The governor is dealing in real numbers that will have tangible effects on Californians, who will end up paying more taxes and getting less for their money.

Moreover, Republicans are eager to portray the deficit and the budget standoff as symptomatic of a larger failing, a lack of leadership on Davis’ part that recalls his widely faulted handling of the state’s energy crisis. Then as now, critics say, the governor failed to act early enough, turning a foreseeable problem into a multibillion-dollar mess.

“He got himself into this fix,” Simon said in a recent discussion with reporters, in which he accused Davis of overspending when times were good. “This is not rocket science. Everybody knows that economies go up and down.”

But Simon’s lack of specificity is not without some risk, particularly for a first-time candidate with no experience in elected office. “That’s very dangerous for Simon,” said Sherry Bebitch Jeffe, a political and policy analyst at USC. “It doesn’t give voters any insight into a man who is very little known.” Jeffe said the tactic gives “very little insight into his priorities, his ability to understand state government.”

Davis has seized on Simon’s own words, delivered during the hard-fought Republican primary, to accuse Simon of irresponsibly ducking the budget debate. “He correctly criticized his two Republican opponents, saying you can’t just criticize the governor, you have to come up with an alternative plan,” Davis told a radio interviewer soon after he released his 1,000-page budget. “I think he should take his own advice and have the courage to produce a plan.”

In fact, Simon issued a rough budget-balancing proposal during the primary, calling it proof that he was the “candidate of ideas” in the GOP field. But even that sketchy proposal, after several revisions, showed nearly $14 billion in red ink.

As it turned out, the shortfall would have been closer to $24 billion. But Simon now says he has no intention of explaining how he would make up the difference. Once the budget passes, aides said, he may have more to offer about the state’s longer-term financial outlook. “If people come back and say, ‘You owe me more and more specifics,’ at some point I’m going to plead, ‘I need a Department of Finance to come up with specifics,’ ” Simon told reporters. “But I think I’ve come up with an awful lot already.”

Among his proposals, Simon has called for slashing the state payroll and a 15% cut in operational spending--the portion of the budget that funds the bureaucracy--along with a freeze on any new spending. As part of those operational cuts, he would reduce health-care and education funding but has not specified which programs he would target.

On the revenue side, Simon flatly rules out tax or fee increases to bring the budget into balance. Rather, he has called for a reduction in the state capital gains tax and a $1.4-billion cut in homeowners’ property taxes. At the same time, Simon has proposed a substantial increase in spending on child care, freeways and other infrastructure projects.

Simon, an adherent of Reagan-era supply-side economics, says cutting the capital gains tax would actually yield more revenue, by inducing people to sell their assets under more favorable terms.

As for the cost of stepped-up road and bridge building, “the public sector on its own would never be able to afford all the state’s needs,” said Jeff Flint, a spokesman for the campaign. “That’s why Bill supports public-private partnerships and other innovative financial means to get all of the roads and power plants and reservoirs and parks and schools this state needs.”

If it all sounds rather imprecise, that is no accident. Vagueness has its virtues, which explains why most politicians avoid specifics to the extent possible.

“It’s almost always the case that it’s safer to be less specific,” said Roy Behr, a Democratic campaign consultant who is not involved in the Davis campaign. “In this situation, any proposal is going to make you enemies.”

Davis, of course, has no choice but to present a balanced budget in the greatest detail. The state Constitution sees to that. (There is no penalty, however, for missing the July 1 deadline, which has happened more often than not in the last 20 years.)

What Davis can do is try to minimize the political pain, which he has done with his mix of roughly $14 billion in program cuts and tax increases.

Education, which consistently tops the list of voter concerns, goes largely untouched. Some of the largest spending reductions are aimed at Medi-Cal--the main health-care program for poor people--and the state’s welfare recipients. Poor people are typically the least likely to vote.

As for revenue, instead of increasing income taxes--the most conspicuous move and one favored by many fellow Democrats--Davis has chosen to raise taxes on smokers and to increase the state’s annual vehicle registration fee. The latter would not take effect until next year--well after the Nov. 5 election.

To help close the budget gap, Davis also relies heavily on various accounting shifts, budget transfers and loans, such as borrowing against the state’s future share of the national tobacco settlement and postponing some school payments. Certain of those moves could leave the state covering the costs well after Davis has left office.

Garry South, the governor’s top political strategist, maintained that the budget cuts and tax increases, while not insignificant, are not “going to drastically impact most people’s daily lives.”

If that proves to be the case, and a budget is signed without prolonged delay, the current impasse may be little more than a summer sideshow for most Californians.

“As long as kids can go to school and the health clinics stay open,” few voters will much care about the legislative sausage-making, said Fred Silva, a budget analyst with the nonpartisan Public Policy Institute of California. “There’s an expectation the world’s going to continue on.”

Beyond that, he said, the details are lost on most people.