Wary Public Looks to Davis

Inaugurals usually mean a new beginning, anticipation of better days, a clean slate. Not today’s inauguration of Gov. Gray Davis for a second four-year term. This one has a dreary feeling, that times are bad and aren’t going to get better soon.

Davis could lift the cloud a little, but only by offering what was largely lacking in the last four years: bold, imaginative leadership able to bring warring factions in the Legislature together. Only that can pull California from the morass of a $35-billion state budget deficit. That’s a tall order for a governor whose popularity is in the tank, who is cautious by nature and who even makes fun of his own lack of charisma. But the 60-year-old Democrat is the only governor California has. And the governorship is the only office that carries the clout needed to make a real difference.

Four years ago, Davis celebrated a landslide victory in heady economic days. This time, he won only a narrow victory over a gaffe-prone political amateur. Now, the fiscal news goes from bad to worse. The state is running out of water. The Rose Bowl game couldn’t even fill the stadium. California needs a jump start, a new vision, a challenge -- think of former Gov. Edmund G. “Pat” Brown’s long-term California Water Project, which boosted the state to a new economic realm, or even former Gov. Jerry Brown’s unrealized but attention-grabbing idea for a state-sponsored satellite. This time, maybe it’s a daring new transportation plan, perhaps built around high-speed rail, that could transform business and commerce in the state. Or a dramatic housing program, with the help of a recently passed $2.1-billion bond issue.

This vision of future greatness might help get the state through its immediate fiscal pain. Political daring will be needed to fix a hodgepodge tax system, riddled with contradictions and unjustified exemptions and subject to wild swings. Spending has to be cut without fear or favor, but with an eye to protecting the weakest and preserving resources for future generations.

Lawmakers will war over the idea of temporary tax increases, but the real permanent need is a system that is stable, equitable and efficient. Where possible, Davis and the Legislature should use the tax system to stimulate business. But beware the lobbyist hype. State tax cuts will not trigger a boom, nor will small increases drive business out of the state. A temporary change in tax rates is not likely to have a major effect on the state’s $1-trillion economy.

For all his limitations, Davis enjoys some advantages today. Because of term limits, he does not have to worry about the next election or spend time raising a new campaign war chest. The public doesn’t think state government can do much to make lives better, and the economy seems unlikely to get much worse. So perhaps, in a perverse way, today’s inaugural has prospects for a new beginning after all. Davis has only to grab the initiative.